EconomyCulture Competition Law Technology Product Price Promotion Consumer Needs Place

What was the answer? A low-cost, high-quality plastic watch –low cost means high volume –high volume permits economical automation –automation reduces labor costs (<10% of total costs) –with low labor costs Swiss can produce the entire product themselves (vertical integration) –do not have to outsource for parts, they can maintain strategic independence

EconomyCulture Competition Law Technology Product Price Promotion Consumer Needs Place

Product Positioning Omega Cost Quality

j brands Importance Weight n Attributes Swatch Timex (a) (b) (c) 6 9 Tells Time Inexpensivei 10 W i =1 i = 1 i = n Attitude (j) = W i Xij i = 1 i = n

EconomyCulture Competition Law Technology Product Price Promotion Consumer Needs Place

EconomyCulture Competition Law Technology Product Price Promotion Consumer Needs Place

The SMH ("Swatch group") product line BreguetBlancpainGlashutte Original Jaquet Droz Leon HatotOmegaRadoLongines UnionBalmaincKTissot HamiltonCertinaEnduraMido Flik FlakSwatchCY3Les Boutiques

The Swatch group product line

EconomyCulture Competition Law Technology Product Price Promotion Consumer Needs Place

EconomyCulture Competition Law Technology Product Price Promotion Consumer Needs Place

Brand identity and brand image What was the brand image Swatch intends to portray? What image do you have of Swatch watches? Brand extensions?

Psychographic segmentation of U.S. consumers 6-10 Consider it "cool", because big kids have it (42% awareness!) 11 –15 ("teeny boppers") provides sense of identity 11 –15 ("young rockers") high awareness, but represents t.b. lifestyle ("students") Swatch too wild for them, but they might buy it to fit in 16 –22 ("rockers") like the price, but dislike the male model geeks 16 –22 ("preppies") prefer a dressier watch ("trendies") hate it; "fast food of time pieces" (73% wear no watch) 22 –32 ("transitionaries") like its durability, disposability, price 22 –43 ("older casuals") watches are used to tell time (4% awareness!) ("weekend hippies") teen image (high awareness, but 43% have never seen a Swatch in real life

EconomyCulture Competition Law Technology Product Price Promotion Consumer Needs Place

What was Swatch's innovation for stimulating demand for watches?

Market Segments Swatch was part of a multi-segment strategy > $400 > $75 Omega Longines Swatch Millions Sold Per year price

j brands Importance Weight n Attributes Brite Gleem Crest (0.6) (0.3) (0.1) Decay Prevention Taste i W i =1 i = 1 i = n Attitude (j) = W i Xij i = 1 i = n Whitening Power Ultra