Paper Sample on Swiss Luxury Watch Brands

Introduction

The Swiss watch industry has for long ticked as a luxury brand prompting one to wonder what has made it to sustain its luxurious reputation for a long term. It can be referred to as the soul of watchmaking although at small scale and extensively development of automated manufacturing facilities. The objective of the paper is to examine the benefits of brand community that has contributed to the sustainability of the luxury watch industry to corroborate the key aspects in fostering coexistence of the luxury watch brands. It contextualizes to understand the consumer needs through an evaluation of major competitive firms in the watch industry. A comprehensive analysis will be conducted through discussion of the operational strategic dimensions, the growth potential, and innovation process and autopoietic character; therefore, providing the insights regarding the expansive Swiss watch industry.

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On the one hand, based on text analyses of 18 swiss luxury watch brand’ websites, the main themes are exclusivity, heritage, excellence which are the foundation of the Swiss watch industry which identifies with target audience. Tentatively, the literature on brand communities suggest that it is a very powerful marketing tool for companies to master which can ultimately lead to an increase in sales. However, it appears that the top swiss luxury watch brands do not take (enough) advantage of such communities.

Customer Centric Approach

In today’s world, companies are taking a more customer-centric approach as they have realized the importance of customers being at the center to increase their profitability. The companies are making a conscious effort to understand the preferences of the customers and consumer demand. Activities such as brand community assisting the brand are dominating the market and helps understand the needs and wants of the consumers for a particular product (Laroche et al., 2012). A brand community is a community that exists in both traditional and contemporary platforms (i.e. offline and online) where companies themselves are directly or indirectly involved in it. In some cases, companies play a key role by interacting among members, generating contents, bringing clarity and sometimes even monitoring the community.

Although brand communities seem to add value to a brand or products, the notion of group (including people) might seem incompatible with the purchase intention of a person. For instance, one aspect of the luxury good consumption is to make a purchase decision driven by self-interest, to stand out from a group. In the Swiss watch industry, it is noticeable that the top companies have pushed and keep pushing their communication forward with concepts like exclusivity and uniqueness, suggesting that the individual is at the epicenter of the business rather than the group.

The watch industry has roots in Geneva, which came to existence in the middle of 16th century, upon the banning of the Jean Calvin, the reformist, to wear jewelry. A quick response to the banning goldsmiths and jewelers turned to watchmaking, which later developed to a luxurious industry in the region and spread across the world. The Swiss watch industry recorded a fast pace growth due to a series of innovations that were born in the 1970s and 1980s. Some of the great innovations saw the launching of electric wristwatches in a move to compete with the Japan watch industry that was a major threat. In a turn of events, the efforts to compete with Japan bore insignificant results and contributed to a crisis that wreaked havoc the Swiss watch industry. Acknowledging the defeat and declining market relevance, the Swiss embarked to develop a strategic plan through re-dimensioning of the business model to regain the lost glory. Presently, the watch industry is broadly segmented in four categories, that is, Digital, Mechanical, Luxury, and Quartz.

Product Differentiation

The product differentiation has prompted a beneficial experience to the Swiss watch industry in the context of market segmentation. On a larger scale, the digital watches are manufactured in volumes since the raw materials are readily available such as plastics; quartz watches are built of high-quality quartz crystals run by electronic oscillators, a technology widely embraced due to the low cost of production; automatic (mechanical) watches utilize kinetic energy produced through hand movement and fueled by the movement of the pointer. Lastly, luxury watches borrow technology from mechanical watches to facilitate the time-keeping functionality as a device though manufactured using highly-valuable raw materials including gold, platinum, diamond among others. Globally, Swiss watches are regarded as a luxurious brand, and for a long-time Swiss has taken the lead in export sales. The Swiss industry hosts some of the leading global firms in the watch industry, that is, Rolex, Richemont, and Swatch Group. The three major companies accompany for 45% of watch sales at the global corporate level. As at 2017, 94% of the export sales from Swiss to the tune of CHF 21.4 billion ($ 22.9 billion) consisted of small watches falling in the category of luxury watches.

On a comparative analysis, higher sales are brought about by expensive watches with a record of 24.3 million watch pieces exported inclusive of domestic sales. In the world, Switzerland accounts for 2.5% of the production worldwide according to a 2017 report, Federation of Swiss Watch Industry. Interestingly, China has come up as a competitive exporter noted as the largest as it exported 688.3 million pieces which is more than 28 times of the export capacity of Switzerland. In terms of sales, China is behind Switzerland due to their segmentation difference. Tentatively, the Chinese watch products are low-priced since the materials and non-precious metals. On average Chinese watches are sold at USD 7, extensively cheap compared to Swiss watches prices.

Effective Brand Community

Therefore, this study investigates how brands can build and/or maintain an effective brand community in a luxury sector where most of the communication do not include groups.Problem StatementThe Swiss watch industry has for long ticked as a luxury brand prompting one to wonder what has made it to sustain its luxurious reputation for a long term. It can be referred to as the soul of watchmaking although at small scale and extensively development of automated manufacturing facilities. However, the emergence of technological and digital devices and substitutes companies such as Rolex, Panerai, and Omega no longer carry the long-held pride due to a decline of sales in the global market. The dwindling of the industry is a threat to the reputation and renowned craftsmanship in the watch industry. The purpose of the paper is to explore the benefits of brand community and its potential to sustain the luxury consumption in fostering the coexistence with the market trends.

Conclusion

The existing literature has dozens of brand definitions. However, for the purpose of the study, the definition of brand based on the American Marketing Association (AMA) dictionary grasps the core concept. It is defined as: “a name, term, design, symbol or any other feature that identifies one seller’s good or service as distinct from those of other sellers.” In other words, this is the basic definition of brand as a logo. Brand is also an intangible asset, where the customers can identify it without having any difficulties; a strong brand is able to stand out from the clutter and attracts attention.