Launching Raymond Weil Luxury Brand Watch in China - Essay Example

Launching Raymond Weil Luxury Brand Watch in China By Table of Contents Introduction 3 Background: Luxury Brands and Raymond Weil 3 Why China 4 Positioning the Raymond Weil Luxury Brand in China 6 Advertising Strategies for Brand Positioning 8 Conclusion 11 Appendix 13 Bibliography 14 Introduction Raymond Weil watches are a luxury brand with a unique distinguishing character. In the general market, the brand enjoys a distinct luxury status. However, in the high end jewellery market, its luxury status is below that of the more luxurious brands such as Rolex. Thus we have identified and propose an IMC for positioning this luxury brand in China with a view to capitalizing on the unique distinguishing character of Raymond Weil watches. Its unique distinguishing character makes Raymond Weil one of the most affordable luxury brand watches and therefore accords you the opportunity to create a niche in large consumer market such as China. This presentation therefore shows why China is the appropriate market for this brand positioning IMC and describes the IMC and explains the justification for this campaign and its strategies. Background: Luxury Brands and Raymond Weil This IMC is important as it focuses on strategies to increase demand for Raymond Weil second-tier luxury brand watches. In order to do so, we propose targeting a large consumer market with spending power. This approach is supported by a study conducted by Dubois and Paternault (1995). In this study, Dubois and Paternault (1995) conducted interviews with 3,000 individuals as a means of determining their luxury brand purchasing habits and their attitudes toward approximately 34 luxury brands. The results of the interviews indicated that while brand awareness differed, brand awareness was closely connected to purchasing habits. Therefore, Dubois and Paternault (1995) concluded that marketing luxury brands therefore requires increasing consumer demands through a correlated brand awareness. This IMC strategy is therefore based on increasing demand for Raymond Weil watches through increasing awareness of the brand. The most important focus of the brand awareness campaign through advertising will therefore be brand positioning. We want consumers to know that Raymond Weil is a luxury brand and although it is a luxury brand, it is not outside the reach of consumers as many luxury brands are. This is a brand awareness angle that we will promote. The IMC strategy will focus on increasing brand awareness through promoting availability and accessibility. This is an important marketing communication because research has shown that brand awareness is closely linked to brand exclusivity (Phau and Prendergast, 2000). In turn, brand exclusivity is correlated to consumption preferences (Phau and Prendergast, 2000). In other words, this IMC strategy will establish that Raymond Weil is an affordable luxury brand and as such is a rarity in its own right. The interpersonal relationship theory suggest that there are many aspects of brand loyalty and this is borne out of how the consumer relates to the brand (Fournier and Yao, 1997). We would suggest that promoting the affordability of Raymond Weil at this time is especially important because it promotes the idea that while other luxury brands are essentially inaccessible during these difficult economic times, Raymond Weil is accessible. This can invoke a feeling of kinship that should create brand loyalty which should carry over when the economy picks up again. Why China China is described as among the largest of the Big Emerging Markets (BEMs) and is continuing to attract foreign trade and investment. Increasingly, multinational corporations (MNC) are seeking opportunities to tap into China’s large consumer market. China’s consumer market is fuelled by its large population and the rapid growth of its economy (Cui, 2013). To this end, China is experiencing the world’s fastest growing economy and this in turn, comes with the world’s fastest growing consumer market. As Tang (2009) observed, China’s ‘consumers are n the midst of an economic boom and a lifestyle revolution,’ (p. 1). After years of relative isolation from the global market and a ‘lack of consumer choice’, Chinese consumers now range from ‘affluent urban youths to mobile professionals to the rural elite’ all of whom are ‘hungry for creative products and services to satisfy their emotional, intellectual and social needs’ (Tang, 2009, p. 1). China’s consumers spend more on luxury brands than any other country in the world. As it is, Chinese consumers account for one quarter of the world’s luxury brands’ consumption. Although a recent economic downturn in China led to a slight decline in luxury consumption, second-tier luxury brands’ sales in China increased (Atsmon, Ducarme, Magni, and Wu, 2012). This is good news for Raymond Weil watches as it is second-tier luxury brand. Moreover, described as the new global consumer, China’s consumers have not only showed a preference for new brands, but have also been found to be quite adventurous in that they are amenable to trying new brands (Atsmon, et al., 2012). Given the market for second-tier luxury goods in China and China’s large consumer market, the time for positioning a second-tier luxury brand such as Raymond Weil in China has never been as promising. This is a perfect time to create brand awareness and to acquire brand loyalty with a view to maintaining a strong market position during lean economic times and once the economy picks up again. We hope to establish a communication strategy that resonates with Chinese consumers. The message is ‘we did not abandon you during tough times’ with the hope that Chinese consumers will respond with a marked sense of loyalty in that they will similarly remain loyal to Raymond Weil when the economy improves. Positioning the Raymond Weil Luxury Brand in China Positioning the Raymond Weil luxury brand in China begins with positioning the brand within its product category: luxury watches. The brand’s position in its product category depends largely on how the brand can be distinguished from other brands in the same product category (Sujan and Bettman, 1989). There are two strategies open to the marketing team wishing to differentiate the brand from other brands in the same category. The first strategy is to position the brand in order to promote the perception that the brand shares ‘important attributes or product characteristics with other brands in the category’ and is ‘superior on the differentiating or distinguishing attributes’ (Sujan and Bettman, 1989, p. 454). In this regard, we expect to convey the message that quality is not always commensurate with excessive pricing and it is possible to acquire a superior product at a reasonable price compared to rival products. The second strategy is to establish a distinct ‘submarket or niche’ for the brand (Sujan and Bettman, 1989, p. 454). In doing so, marketers will try to distinguish the brand from the product category as opposed to positioning the brand within the product category in general. Differentiation is utilized for creating a ‘strong perception of difference’ that the brand ‘is in a class or category by itself’ (Sujan and Bettman, 1989, p. 454). The question moving forward is whether or not Raymond Weil can realistically position itself as a unique product compared to its rivals and thus establish its status as a unique product. Looked at in the context of China, it would appear that the first strategy which is known as the differentiating strategy is the preferred route to take. This is because although Raymond Weil is a luxury brand, it is a second-tier luxury brand and as such, it is cheaper than first-tier luxury brands. Since, Raymond Weil is less expensive and given the economic downturn in China’s economy, the second-tier luxury watch can be a substitute for first-tier luxury brands coveted by Chinese consumers looking to avoid excessive spending during these difficult economic times. In this regard, the second strategy in which the luxury brand is promoted as a unique product is a bit more difficult to achieve. Raymond Weil is not a unique product in and of itself. It is different only in the sense that it is an affordable luxury good. Four essential elements must be taken into account when positioning brand. First the market targeted must be considered. Secondly, the product’s difference or superiority to rival products must be taken into account. Thirdly, the ‘value of this difference to the target market’ and finally, the methods for communicating the difference in the targeted market must be considered (Gwin and Gwin, 2003, p. 31). Each of these elements play a significant role in the decision and strategies for positioning Raymond Weil luxury brand watches in China. China’s large consumer market, the Chinese consumers’ willingness to try new products, their desire for foreign luxury brands and the current economic downturn are all relevant target market considerations. The target market’s current situation and consumer preferences makes a strong case for positioning Raymond Weil luxury brand watches in China. Differentiation occurs because although Raymond Weil is a second-tier luxury brand, it is a luxury brand nonetheless. This means that Raymond Weil can be purchased at a lower price than comparable first-tier luxury watches. This ties in with the third essential element: the value of the differentiation. The obvious value is the fact that Chinese consumers can indulge their taste for foreign luxury brands and obtain a luxury watch brand at a lower price at a time when the economy does not support excessive indulgence. The final element, advertising and promotion is considered in greater detail below. Advertising Strategies for Brand Positioning We propose a relatively new approach to brand positioning advertising. This relatively new approach is conceptualized as global consumer culture positioning (GCCP) which was established by Alden, Steenkamp and Batra (1999). In order to understand the utility of GCCP it is first necessary to explain global consumer culture theory. According to global consumer culture theory, the global market place has grown into a universal market place in which cultural boundaries are no longer significant. Due to globalization which entails the free movement of people and products, many countries are multicultural and consumers have developed an appreciation for global brands as opposed to localized brands and goods in general (Cleveland and Laroche, 2007). Thus GCCP advertising strategies tend to promote the brand as a global rather than a foreign or local brand. Thus the alternatives to GCCP advertising are local or foreign brand positioning. Through local consumer culture positioning involves advertising and promotion campaigns that link the brand to the local culture. Foreign consumer culture positioning seeks to connect the brand with a foreign culture (Alden, et al., 1999). By comparison, GCCP is indiscriminate and reaches out to the global market. Okazaki, Mueller and Taylor (2010) tested GCCP for its effectiveness as an advertisement strategy for brand positioning. Specifically, Ozaki, et al., tested the effectiveness of hard and soft sell based on a GCCP strategy. Soft-sell involves the use of ‘indirect and image-based’ advertising and hard sell involves ‘direct and information-based’ advertisements (Okazaki, et al., 2010). The results of the study indicated that both hard and soft sell strategies are effective for the purpose of a GCCP strategy (Okazaki, et al., 2010). In order to determine whether or not to use soft or hard, sell it is necessary to select which market segment the marketers are targeting in China. China is a large consumer market and although global consumer culture theory speaks to a universal consumer market, there are differences among the global consumer market in terms of age and gender. Knowing which consumer segment is targeted helps the marketer determine which method of advertising and promotion should be used to communicate the brand to the targeted consumer segment (Hall, Shaw, and Doole, 1994). We propose targeting China’s Generation X consumers because this group of Chinese consumers. China’s Generation X consumers have grown up exposed to an increasingly globalized world and are primarily living in and working in conditions where they interact with a variety of global goods and diverse cultures (Zhang and Shavitt, 2003). For the most part, China’s Generation X in China’s largest cities are working for and in offices of MNCs. They use cell phones and can be observed switching seamlessly from Chinese language to English. Generation X spend a great deal of their spare time patronising “Western-style bars and discos’ and they work in Internet cafes or at foreign firms (Zhang and Shavitt, 2003, p. 21). Not only are Generation X representative of the current middle class Chinese between the ages of 18 and 35, but they are also a sneak peek into what the future of China’s consumer market will be like: connected to global markets and a part of a global consumer culture (Zhang and Shavitt, 2003). Based on Zhang and Shavitt’s (2003) description of China’s Generation X or consumers between the ages of 18 and 35, both a hard and soft sell will work in China with respect to marketing Raymond Weil luxury brand watches. With respect to soft sell techniques, research has shown that Chinese consumers are particularly interested in and rely on word-of-mouth communications as opposed to company communications. In particular, Chinese consumers search the Internet and use social media and online message boards or forums to engage in consumer-to-consumer communications about a product or brand (Fong and Burton, 2008). Thus there are a number of ways that Raymond Weil can be promoted in China to accommodate Chinese consumers’ preferences for word-of-mouth communications about a brand. Raymond Weil can establish a Facebook page specifically for Chinese consumers to communicate with one another about the brand. Secondly, a message board can be established so that Chinese consumers can discuss the luxury brand and share information about where it can be purchased and the price of the brand. In order to communicate the existence of these word-of-mouth information sources, a leaflet proving their links can be sent to Chinese consumers via direct mail or email. Since direct mail and email advertising are recent developments for Chinese consumers there is a high probability that they will open this sort of mail and pay close attention to its contents (Hoyer and MacInnis, 2010). A study conducted by Shen and Chen (2008) used the theory of planned behaviour to determine the best method of advertising in China. The study was based on a survey designed to measure technology acceptance model, and variables identifying attitudes toward Internet advertisements. The results of the study showed that Chinese consumers are more apt to use their mobile telephones in order to seek information about a brand and will pay attention to Internet advertisements should the advertisement manifest some form of entertainment value, is informative and is credible (Shen and Chen, 2008). Based on evidence from the literature reported above, we will take a combined soft and hard sell approach to advertising and promoting the Raymond Weil luxury brand in China. Advertisements will be presented online and these advertisements will be informative, but will have some form of entertainment value. Entertainment value will be derived from the images of the watch accompanied by music. In order to ensure that the advertisements are credible, the advertisement will be conservative in nature and will include a narrative promoting the lower price of Raymond Weil compared to its competitors. In order to reach a larger consumer base and so as to reach Chinese consumers that rely on the television for information about brands, advertisements mirroring those posted on the Internet will be aired on television (see Appendix). Conclusion It is expected that taking the GCCP approach through both hard and soft sell advertising strategies, Raymond Weil luxury watches can expect to improve brand equity. Brand equity is improved through GCCP brand positioning approaches because it gives the brand a global character and imputes some form of brand power (Okazaki, et al., 2010). We will monitor the progress of Raymond Weil’s IMC in China and will make all necessary modifications. However, we are optimistic that this campaign will be successful and expect that Chinese consumers will have a positive response to advertising and promotion techniques. If and when it is discovered that the Chinese campaign is successful, we will be looking to expand to other emerging markets such as India. While this IMC strategy is calculated to capitalize on a down time in the Chinese economy, it is anticipated that Raymond Weil watches will continue to be a luxury brand of high demand when the economy picks up again. This is because, the current strategy will increase brand awareness and with this brand loyalty. Once the economy picks up again, it is anticipated that Chinese consumers with more spending powers will then indulge their tastes for Raymond Weil’s more expensive watches. For the time being we will promote the lower-tier Raymond Weil watches such as the cheaper stainless steel watches. As the economy picks up again, we will introduce and promote the more expensive watches such as the gold-plated watch bands with crystal faces. Once we have established a niche for Raymond Weil second-tier luxury watches in China’s consumer market, we can consider the possibility of introducing and promoting Raymond Weil luxury clothing and accessories. The primary goal is to improve brand awareness through the rarity or Raymond Weil’s affordable luxury items and once this has been accomplished opportunities for Raymond Weil are unlimited. Appendix Road Map to Advertising Raymond Weil Luxury Brand Watches in China 1. Internet Advertising 2. Television Advertising 3. Direct mail 4. Email 5. Social Networking 6. Facebook page for Chinese Consumers. 7. Online Forum Bibliography Alden, D.L.; Steenkamp, J-B. E.M. and Batra, R. January 1999. Brand Positioning Through Advertising in Asia, North America and Europe: The Role of Global Consumer Culture. Journal of Marketing, Vol. 63(1): 75-87. JOURNAL. Atsmon, Y.; Ducarme, D.; Magni, M. and Wu, C. December 2012. The McKinsey Chinese Luxury Consumer Survey: Luxury without Borders: China’s New Class of Shoppers Take on the World. McKinsey Consumer & Shopper Insights, 1-40. JOURNAL. Cleveland, M. and Laroche, M. March 2007. 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