SWOT Analysis

By Julia

STRENGTHS

Good value/price ratio

Innovation

Market leader

Positive reputation

Swatch-communities

Quality

Durability

WEAKNESSES

Changes of trends

Hard to predict the market

Absence in social media

OPPORTUNITIES

Emerging markets

Global expansion

Innovation in watchmaking

THREATS

High competition

Global economical situation

Low-cost competitors

Brand association

By Julia

As brands get recognized, they also get associated in different aspects. Brands can be associated with qualities, people attitudes and expressions. In the worst case brand are associated with something negative, such as sweat shops, but in the most favorable case a brand is associated with something positive.  Brand associations are the images and thoughts you get when you think about the brand. On the other hand, brand associations can appear when you see something or hear something and which brings you back to the brand. Using a catchy song  or a distinctive character or celebrity in advertising will bring brand associations.

Lane Keller (2008) categorizes brand associations with three different dimensions: the first and strongest association what comes up to your mind of a brand (strength), What you like and don't like about the brand (favorability) and what makes the brand special (uniqueness). Following the example, the three dimensions of Swatch could be: Colorful + low price + extraordinary design!

Nielsen BuzzMetrics’ has created a Brand Association Map (BAM), which is a visual map presenting the key brand dimensions: Competitors, Products, Related Concepts and Brans Attributes. Nielsen can create the map by using conversations online, but we created a map which could be the case for Swatch.

Sources: http://marketingdeviant.com/brand-association/ , Lane Keller, K. 2008. Strategic Brand Management. 3rd Edition. http://www.nielsen-online.com/downloads/us/BAM_US.pdf

Competitors

By Sarah


Nick Hayek Jr., boss of Swatch, keeps claiming it:

"Swatch is about provocation"

Swatch has grown over the past two decades into one the world's largest watch companies, with $3.5 billion in sales last year.

But Hayek recently decided to reduce the number of Swatch models to 80 from 155 in a bid to cut costs: Analysts say Swatch is hampered by high costs of manufacturing in Switzerland, the strong Swiss franc, and competition with cheap watches from Japan and China.

Switzerland's traditional dominance of the international watchmaking market began in the 1970s. The arrival of digital technology gave rise to a new breed of cheap Asian watches and to a new generation of giant Japan and Hong Kong-based industrial manufacturers. The Swiss market, with its tradition of small, often family-owned firms, and its continued focus on more expensive, labor-intensive mechanical movements, was caught by surprise by the gains made by such brands as Seiko and Citizen, both Japanese.

• A brief company description:

Seiko watches are synonymous with Japan. The phrase Seiko means exquisite, success or miniature. The company was born in 1881.

Dedicated to technology advancement and precise manufacture, the Seiko Company has repeatedly staked its reputation on performance, acting as the Official Timer of the Olympic Games in Tokyo, Sapporo, Barcelona, Lillihammer and Nagano. 

Seiko's design innovations include the world's first quartz watch.

"Seiko is renowned for pioneering new sophisticated watch technologies to provide its customers with incredible levels of accuracy as well as a superlative ownership experience." These are the words of Seiko, the manufacturers from Japan.

•  Customer insight:

Seiko customers name some criteria to explain their preference. First, there is the "good value for money" criteria: customers feel like Seiko is an affordable watch and has great accuracy. Second, they claim the watches have a style that is never out of fashion. And last, they mention a great desirability.

• A brief company description:

The company was established in 1918. The founding fathers selected the name "Citizen" so it would be "Close to the hearts of people everywhere".

During the last 85 years, Citizen has expanded its business and achieved recognition as a global brand. The past 25 years period has coincided with the company's dramatic rise to its current position as the world's largest watchmaker (http://www.citizenwatch.com).

More recently, Citizen has achieved a new position as leader in ecologically friendly timekeeping with its Ecp- Drive collection of light powered watches. 

• Customer insight:

Citizen lovers also mention the good value for money criteria and the stylish look of their watches. But the whole eco- friendly mechanics launched by Citizen in the arena of watches offered the brand an image of trend- setter: to them, a Citizen watch is like a pioneer that is to be possessed. 

But then, why are Swatch watches still so popular? The Swatchers know. These watches are not only stylish and affordable: Swatch watches are Swiss-made and come with Swiss quality movements. The company brings out new designs twice a year, which helps keep the watches unique: with so many styles to choose from, chances are, you won't come across anyone else wearing your watch. You may even be buying a collectible watch. You could buy a Swatch for as little as $60 and find it becoming a collector's item in a few years - Vivienne Westwood designed a few and they are now serious collector's items costing many times what you would have paid for them originally. Swatch watches are for those who want a watch that's affordable, expressive, individualistic and, above all, fun.They express who you are, they suit your personality. 

And then there is an intangible factor Mr. Hakey would claim:

"Swatch is an icon".

Swatch The World

The watch market is made of numerous companies producing and/or assembling watches. It has been estimated €26 billions in 2010 with a 5% growth since 2009. Needless to say it is very broad one, with products price varying from €10 quartz mass market watches to €10.000.000 exclusive collection masterpieces! It is highly competitive with hundreds of brands, with cheap or fashion or traditional segments. It has a great longevity throughout the years, thanks to the demand that never declined. Brands also have great longevity with examples of Blancpain (1735), Breguet (1775) or Vacheron Constantin (1755).

We can consider two distinct part of the watch industry, which are the mechanical watches and the quartz watches. We usually consider mechanical watches to be of a higher standard. Switzerland is the first watch producer, with other countries such as France, United States or Japan behind. The watch market is also characterised by the high skills it requires producing, especially for mechanical watches, therefore, creating rel high barriers to entry.

Here is a list of some major players in the watch industry:

Name	Date of creation	Nationality
A. Lange & Söhne	1868	Germany
Audemars Piguet	1875	Switzerland
Baume et Mercier	1920	Switzerland
Bell & Ross	1992	France
Breguet	1775	Switzerland
Breitling	1884	Switzerland
Casio	1946	Japan
Festina	1902	Switzerland
Hamiltion	1882	United States
Lip	1867	France
Longines	1832	Switzerland
Omega	1848	Switzerland
Orient	1950	Japan
Rolex	1908	Great Brittain
Seiko	1881	Japan
Swatch	1883	Switzerland
Tissot	1853	Switzerland

Customer Types and Segments

By Julia

Identifying a typical customer of Swatch is a real challenge. Swatch products represent high quality and low price at the same time. A typical customer could be seeking for practicality or a trendy statement peace at the same time. The playful and innovative design  is appealing to teenagers and younger target groups, but Swatch watches has been seen also replacing a Rolex on beach holiday.

We recognize four common consumer market segments: geographic, demographic, psychographic and behavioral segmentation. Geographically speaking, Swatch is global brand and their products are available world wide. When it comes to demographics, the Swatch customers are mainly young and "young in heart". In many families a Swatch watch could be considered as the first watch if a child, when you are still learning how to read a watch. Anyhow, the product range doesn't exclude middle-aged or even senior target groups. Psychographic segment might be the most challenging, but without doubt Swatch fits for customers that value quality, simplicity, practicality and durability. Swatch definitely suits for people who appreciate doing sports and adventures, because the watches can handle splashes and hits. At last but not least, the behavioral segment is based on price sensitivity and customer loyalty. Swatch watches are affordable and offer good value for money. The customers appreciate the possibility to purchase the favorite watch in several colors matching with every outfit. For younger customer, Swatch could be the only brand, but older customers might appreciate also other brands for different occasions. 

To wrap up the customer types, an ideal Swatch customer would be young, trendy, fun loving and price savvy person.

Source: www.quickmba.com/marketing/market-segmentation/