Birth of Swatch

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The promotional strategy?

I’d like say that from my point of view 90% of Swatch success if the success of product promotion.

Not to repeat said above, would add, that from my point of view creation of “Swatch Collectors Club” was not necessarily needed, as such loyalty programs should hold the customer (as “miles” which customer collects and additional services, customer receives access to, while fly by exact airlines, or cumulative discount cards). In case of Swatch Collectors Club, I hadn’t saw some serious customer holding factor – as customer just pay 90 USD and receive some additional information and Collection addition of watch (it could work with customer who is very loyal to brand before he entre the program).

What about the pricing strategy - what does Franco Bosisio mean when he says that the Swatch is sold at a “clean price”?

Given the huge demand for Swatches (particularly for certain models), did the company make a mistake in not raising the price for some of its styles?

1. This is about differentiation from competitors (who dive different prices for different watches), idea with freedom of choice / simplicity of buying process (customer don’t have to think about price, he choose the message). And is to think from loyal customers’ point of view, who is collecting Swatches, it would be logical that all the Swatches have to have the same price.

Increase of prices for certain models would ruin the sales structure.

2. Taking care about customer, show to customer that he could really rely on Swatch not only today, but tomorrow as well.

3. it’s OK when you have approximately the same cost of product and value of it, and Swatch has done right when on later stages of company development, they have produced exclusive / limited addition version. But it’s beneficial to be done when brand is known and have a good reputation. It’s beneficial not for straight sales results in first term, but for marketing mainly (by such action it’s shown that Swatch is attractive for even very famous or rich persons + famous designers take care of Swatch style).

Prior to the introduction of the Swatch, what kinds of watches were popular among consumers?

After analysis of Figure A and information from the case, I make following conclusions:

1. Before early 50th - appearance of Timex, and other low-priced watched 90% of market was hold by Swiss watch – mechanical and expensive (as nothing else were available).

2. When alternative appeared situation changed to following:

High-priced – 2.7% of world market

Mid-priced – 14.0% of world market

Low-priced – 83.3% of world market

Share of Quarts watch was ar. 75% of world market

In what way was a Rolex different from a Timex, or from a gold-plated Seiko?

This is the question of market positioning, segmentation and target customer selection.

You don’t have to try Rolex to know that it will be excellent watch, as it’s known all around the world. Therefore the price for Rolex is extremely high. In Rolex case high price is one of main products’ benefit, as it shows the value, and not only the value of the watch but of the person who wear it as well.

Timex could be as accurate as Rolex, and even better as you can put is in to the dishwasher and it still will work, Gold-plated Seiko could look like Rolex and have 4 times less price, but would never be Rolex, as prestige id the main value of Rolex.

How did consumers make buying decisions?

It depends on customer and what is he looking for.

1. People who are looking for prestige bye Rolex (if possible for them from financial point of view).

2. People who are looking for prestige bye Gold-plated Seiko (if impossible for them from financial point of view).

3. If just looking for the watch would buy any by mid or low price (Times is possible if ratio between price and quality if good).

In many ways, the Swatch forced people to think about watches in a way they had never thought before. Can you think of other products in other product categories that have done the same thing?

1. Apple company with iPhone

They have created the niche of smart-phones (principally new product), kipping development, has added the new value to mobile (it’s a part of image now).

2. GetTaxi – app which could be used with PC of smart-phone, to order the taxi.

The app has changed the taxi market in Russian, as ordering taxi be phone became senseless time-vise, price-vise + Loyalty programs.

3. Metadynea – Synthetic resins producer.

Before MD appeared it were a lot of resins producers, but nobody had provided Technical service or Product development following exact customer needs / requests.

Industry has changed, development became times faster, customers are looking for more and more benefits for them (as know that it’s possible to ask for it).

Metadynea has increased the market share from 0% (when was established at 2004) to 48% at 2015.

It’s important to be customer oriented and break some of rules