Consumer Brand of Choice - Rolex - Essay Example

Brand Plan for a Consumer Brand of Choice Executive Summary Rolex is a brand synonymous with and prestige. A that emerged in the early 20th century in the prime years of the industrial revolution when self winding wrist watches were a myth, nonexistent and hitherto unknown to the world of clocks. When we think about Rolex, we think about the top bracket of the consumer market belonging to the rich and affluent class and the niche watch brand area for fashion purposes rather than regular use. “Rolex” watches belong to the topmost tier in the watch and jewellery spectrum. The name Rolex is a benchmark of international quality, a brand that can be used as a yard-stick in daily jargon to compare excellence in product through flawless craftsmanship. Every Rolex watch tells the tale of an instrument that passes through a series of stringent tests in the manufacturing units supplemented by individual care in making sure it truly represents this undisputed royal watch brand. “Rolex watches are popularly regarded as status symbols” (Khurana, 2010) There are many reasons why Rolex is positioned in the market the way it is. It was a pioneer in the invention of wrist watches through the skill of its co-founder Wildorf in innovating Oyster waterproof case and screw crown. Rolex has many “first” which account for its “father-figure”, aristocratic and near-Godly stature. Rolex manufactured watches were the first to come with Kew “A” test, a prestigious achievement in the early 1900s that deemed it to be perfect in time keeping. Again, Rolex watches were the first to have “perpetual self winding rotor mechanism” that kept the watch at optimal tension and wound on its own at the slightest movement of the wrist. (Rolex.com, 2012) Market Audit Macro-environment The watch and jewellery market is huge at the global level with international brands like Rado, Tag Heuger, Citizen, Gucci, Jaeger-LeCoulture, Schwarzkopf, Breitling, Victorinox (Swiss Army), Cartlier, Omega, Tissot, Movado, ESQ, Edward Mirell, marahlago, David Vurman, John Hardy, Roberto Coin, Ammolite, Llardo, Marco Bicego, Honora, Yvel, Tudor etc. Even though these watches make up for them mid-range watch and jewellery market they compete to a certain extent with Rolex to get a share of the larger customer base who are not Rolex loyalists. Rolex has numerous competitors in the 43.6 billion USD watch and jewellery industry. Rolex has released its Tudor in 1946 to eliminate stiff competition faced from mid-range wrist-watch brand like Tag Heuger and Rado. Its model categories: Prince, Princess, Monarch and Sport entered into the fuzzy high-end-midrange market were modestly priced for a large customer base. (Rolex.com, 2012) The value for luxury watches is rising at a rate of 17 % since 2000 with volume growth lagging behind at 13 %. This is because commodity prices, making charges, crystal and minerals costs have an increasing trend with time. On the other hand the percentage increase in units sold every year is not as high to match with the appreciating value. (Mintell Group Ltd., 2012) Rolex is seeing a natural tendency to being a male dominated brand. It has enough potential to woo female customers owing to their increasing income and affinity towards luxury watches compared to men and young adolescents. Micro-environment: The Rolex brand image has been nurtured in the Swiss capital of Geneva and has been owned and managed privately. It has been under the leadership of Han Wildorf, the founding father and pioneer of wrist watch making, water proof oyster shell and perpetually self winding technology. Within its micro environment in the Swiss Watch making industry, it has received competition from competitors like Omega, Piaget and citizen in the high end and mid range jewel embedded watch category. However, it has been able to maintain its niche and customer base targeting almost 14 % of consumers in the luxury category. Company Information Rolex was co founded by German-born Hans Wilsdorf and his brother-in-law William Davis in the year 1905. Wilsdorf got the company registered as early as in 1908 and within two years in 1910, it gave the world the first Rolex watch small enough to be worn on the wrist. The company was shifted to Geneva in 1912 where it set up its headquarters and has remained to be so till date. The company has only 60,000 registered dealers worldwide. They have no online ordering portal or third parties. Every watch is sold out of an authorised Rolex dealer. (Rolex.com, 2012) Rolex is a privately owned company and has been controlled by only three people in its 100 year long history. This management and ownership strategy has enabled the maintenance of world class standards in a consistent manner. In the words of the Rolex’s managing chairman in the 80’s, “Rolex’s strategy is oriented to marketing, maintaining quality, and staying out of fields where we are not prepared to compete effectively”. “Rolex is the largest single luxury watch brand, with revenues of about $3 billion and annual production of between 650,000 and 800,000 watches.” (Liebeskind, 2004) Competitive set (Frame of reference) Rolex has its own benchmarks setting it apart from its competitors. However, companies like Omega, Piaget, and Citizen etc have created a baseline in terms of functionality, price, quality and satisfaction. Together this comprises as the frame of reference for jewel studded high range luxury watches. Market Structure and Segmentation Market Structure: Rolex has niche market comprising of a tiny 14 % of consumers who are Luxury wearers. The larger section of the crowd comprises of 61 % being the modest section and 25 % being aspiring. (Mintell Group Ltd., 2012) Market Segmentation: Men and women both account for as consumers for high end Rolex watches. However, the rate of volume sale is more form the women segment than the male segment. The same equates to its annual sale. In the year 2005, Rolex registered its usual forecasted sale consisting of 12.7 percent share of the high and mid-range watch and jewellery market. It competed with Omega standing at 6.9 % in the second place and high end watch brand Gucci at 6.0 % followed by Tag Heuger, Cartier and Raymond Weil. (Mintell Group Ltd., 2012) Brand Audit a. Brand attributes Rolex serves the needs of class show and pompous lifestyle of the rich and the affluent. Therefore, it is not a regular wearable product, rather, a lifestyle luxury product worn to express one’s economic status and social influence. It fits in with one’s personality well provided the personality hails from the rich class. The bottom line of Rolex is watches that are made through excellent craftsmanship for the affluent priced exclusively and available in limited numbers. Values promised by “Rolex” are Prestige, Antiquity, Class and Precision. Rolex watches take a year to build. The purchase is all about prestige which every Rolex watch guarantees through its look, feel and functionality. (Branding Strategy, 2008) Rolex exudes three values in people fit to wear a Rolex: affluence, adventure and sportsmanship. This is advertised through its brand ambassadors who are artists, athletes, explorers and yachtsmen. (Rolex.com, 2012) Brand Positioning Rolex watches make up for the high end watch manufacturing company targeting a select section of audience belonging to the affluent class. It is at the extreme high end of the spectrum in the watch and jewellery section owing to its price, brand statements (precision, affluence, adventure and socio-economic status). Headquartered in Geneva, Switzerland, Rolex has always had a very measured and specific brand publicity strategy. Adopting few chosen media to reach out to its target audience through high class lifestyle magazine, it aspired to seek the attention of the rich, affluent and aristocratic society of Europe. Rolex plays in a very niche domain with few competitors. It has selected stores, distributors and retailers around the globe and for the 100 years have stuck to the rules originally laid down by the founding fathers Hans Wildorf and William Davis. Brand Extensions/ Product Portfolio Rolex watched come in three different brand groups which have further sub-brands underneath them. The three brands are ad their respective sub brands are as follows: Oyster Perpetual (for the aristocratic class) a) Air King b) Perpetual c) Date d) Datejust e) Datejust Turn-o-graph f) Day-Date g) Lady Datejust h) Lady Datejust: Pearlmaster Oyster Professional: (for professional athletes, musicians, explorers, champions etc) a) Explorer b) Gmt-Master II c) Submariner d) Submariner Date e) Sea Dweller 4000 f) Yatch Master g) Cosmograph Daytona Cellini: a) Cellinium b) Quartz c) Cellissima d) Classic e) Danaos f) Cestello g) Orchid h) 2005 Prince (Rolex.com, 2012) The Oyster Perpetual range is the base brand reflecting originally conceived design (i.e., oldest designs from the Rolex workshops) meant for exclusive aristocrats. Oyster Professional ranges of watches are meant for sportsmen, athletes, explorers, divers etc. Cellini range of watches is meant for wearing on special occasions. Source of Brand Equity The name Rolex has been the centre of the symbolism of excellence, opulence, socio-economic-class, perfection, accuracy and world class quality standards. It is the company’s most important source of brand equity. Functional benefits like quality, craftsmanship, innovation (including the ‘10 golden rules’) also contribute to the brand equity. Another source of equity is the company logo. The crown conveys an exclusive status to the company and the wearer. The premium pricing and limited edition distribution also confer “emotional and self expressive benefits to the wearer” further contributing to the brand equity. Rolex watches target the high class society that form the top 14% of the society capable and desirous of wearing luxury watches like Rolex, Rado, Tag Heuger etc. Rolex is differentiated form other watch brand in the mid and high range sector by its resale value and symbolism of superior quality. The ’10 golden rules’ that are followed in making each watch also strongly differentiate Rolex watches from other company watches. Brand identity standards Rolex identifies itself through niche marketing, putting up its advertisements only in high end magazines. It refrains from other electronic or paper media marketing relying on customer loyalty and interest through these marketing channels. Fashion, Luxury, Lifestyle magazine published internationally or in Europe are its main marketing resources. Rolex identifies its brand with high performers and achievers like champions in tennis, sea faring, golf etc. It has its brand ambassadors of the like of Roger Federrer (ace tennis player and multi title holder), Vijay Amritraj (Tennis champion) etc. Brand SWOT Strengths Some of the strengths include: 1. An established brand name since the 1910. It is an established, reputed and world class brand with a permanent set of loyal customer and their generations who look up to the brand and remain motivated to make future purchases 2. Excellent production line, manufacturing process, quality and brand status 3. Undisputed precision and accuracy in term so f time keeping 4. Resale value and an asset that can be preserved for future generation Weakness 1. Highly priced 2. It is not meant for the masses and, hence, has a specific range in the customer spectrum Opportunities 1. It has the opportunity of tapping into the rich and aristocratic class, politicians, royalty, affluent and business class people and families in and around Europe, America and recently in South East Asia, for instance, Shanghai. Threats 1. Heavily dependent on individual decision as price per unit is high and number of sales is relatively low as compared to other mid and low range watch brands. Target Market The target market of Rolex is the upper class. People who have a desire to live a luxurious life and be ostentatious in their social conduct form the target base of Rolex. Rolex watches are not meant to be worn in wrists and covered with over-coat sleeves, neither are they meant to be kept in pockets hidden from the public eye. They are meant to be proudly displayed to the public as much as to be marvelled upon for their uniqueness and symbolism of perfection and affluence. Brand Objectives and Strategy The Brand Objective at this point in tie at the turn of the new millennium is to woo the youth customer base. They will account for the future sales and future success and relevance of an antique brand. Women represent a far larger section of customer base capable and interested in luxury watches than men. Rolex should include more female ambassadors like tennis stars, swimmers, astronauts etc. Brand action plan The brand action plan will consist of gathering youth preferences, hiring world renowned designers in redefining ageing looks of Rolex watches and make them more contemporary in look, feel, functionality and style retaining its values of opulence, excellence and perfection. Another initiative could be exploring new geographies like the South East Asian region for example. International destinations like shanghai could be large profit pockets for this niche area watch maker. (Red Luxury, 2012) Brand Implementation Cutting edge designers can be hired to work along with Rolex craftsmen in giving its brands a new look and feel. A separate brand range exclusively for women can be designed and marketed to build women customer base. The leadership can be shuffled and new leaders roped in to fill up positions of CEO and Head of Foreign Subsidiaries to give renewed direction and vigour to the top level leadership of the team. Future brand development Development of the brand in the future should focus on the following initiatives: 1. Making women play a pivotal role in marketing , public an mass media advertising like hiring female athletes as brand ambassadors (e.g. Serena Williams, a tennis player, Sunita Williams, an astronaut etc) 2. Understanding the youth style statement and hiring a designer in revolutionising its design to attract the younger generation of affluent background. Measurement and Control Rolex needs to strengthen its intellectual property rights and reservations against copyright infringement and trademark violation. It needs to clamp down harder and quicker on the black market of counterfeit Rolex watches to save future losses. (Rolex.com, 2012) Due to Rolex’s popularity within selected audience and its high profitability through selling single units, there are chances that they may be counterfeited. This is the last thing that Rolex would want and squander its reputation of making “world class, reliable, quality watches. Rolex fears that if the watches are sold in second life, there may be duplications and this might in turn lead to customer confusion and dissatisfaction.” (Finance Maps of World. 2012) References List Branding Strategy Insider.com, 2008. Branding Strategy Insider: Advertising: Emotional vs. Rational. [Online] Available at [Accessed 20 Nov. 2012]. Douez, S., Besson, P., 2011. Rolex looks to renew classic brand. [Online] Available at [Accessed 20 Nov. 2012]. Finance Maps of World, 2012. Home – Brand – Value: Rolex Branding Strategy. [Online] [Accessed 20 Nov. 2012]. Khurana, A., 2010. Marketing Strategy of Rolex. [Online] Available at [Accessed 20 Nov. 2012]. Liebeskind, D., 2004. Stern Business Fall/Winter 2004: What Makes Rolex Tick? [Online] Available at: [Accessed 20 Nov. 2012]. Mintell Group Ltd., 2012. Mintel Research Overview. [Online] Available at Mintell Group Ltd, 2008. Watches. Mintell Group Ltd., 2011. Watches and Jewellery Retailing. Red Luxury, 2012. The Rolex Experience Comes to Shanghai. [Online] Available at: [Accessed 20 Nov. 2012]. Rolex.com, 2012. Rolex Case Study: Rolex Brand Audit. Keller, K. L., 2012. Strategic Brand Management Building, Measuring and Managing Brand Equity Gautschi, K., 2005. The Swiss Luxury Watch making Industry Schaerer J., 2012. Tudor: The Other Rolex Brand Read More