1. EconomyCulture Competition Law Technology Product Price Promotion Consumer Needs Place

2. 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

3. EconomyCulture Competition Law Technology Product Price Promotion Consumer Needs Place

4. Product Positioning Omega Cost Quality

5. 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

6. EconomyCulture Competition Law Technology Product Price Promotion Consumer Needs Place

7. EconomyCulture Competition Law Technology Product Price Promotion Consumer Needs Place

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

9. The Swatch group product line

10. EconomyCulture Competition Law Technology Product Price Promotion Consumer Needs Place

11. EconomyCulture Competition Law Technology Product Price Promotion Consumer Needs Place

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

13. 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 11- 15 ("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 16- 22 ("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!) 33- 43 ("weekend hippies") teen image (high awareness, but 43% have never seen a Swatch in real life

14. EconomyCulture Competition Law Technology Product Price Promotion Consumer Needs Place

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

16. Market Segments Swatch was part of a multi-segment strategy 8 42 450 > $400 > $75 Omega Longines Swatch Millions Sold Per year price

17. j brands Importance Weight n Attributes Brite Gleem Crest (0.6) (0.3) (0.1) 6 4 4 7 5 2 Decay Prevention Taste i 2 7 7 W i =1 i = 1 i = n Attitude (j) = W i Xij i = 1 i = n Whitening Power Ultra