Swiss Watch Company ROLEX and Customer Satisfaction - Essay Example

Swiss Watch Company ROLEX and how they manage satisfaction, loyalty and what the company does to foster relations Introduction Whentalking about quality and luxury watches, it is normal that Swiss watches come to the mind instantly. While Rolex has been the leading Swiss watch manufacturer since 1905, other popular brands include Swatch Group and Richemont, as these three companies are responsible for catering to the majority of demand for watches, worldwide. However, the competition has kept all the three manufacturers on their toes, while they are using technological advancement to further their marketing interests, particularly for luxury watches segment. Hence, it is no surprise that the watch companies have brought in innovation in their production and marketing techniques. The same include use of titanium and ceramics, apart from gold and diamond in their watches, as well as launching creative customer relations management (CRM) modules to keep the existing customers, whiling adding the new ones. Keeping the quality and customer satisfaction in view, Rolex watch company has limited its production of watches, till recently, between 650000 to 800000 per year. Hence, the demand for their prestigious time pieces has always been more than the production and supply figures, while the waiting list for their stainless steel Daytona watches goes up to five years, at times.(Liebeskind, What makes Rolex tick) & ( Smith, 1996) However, with their planned new production facility at Bienne, the company hopes to add around 400000 cubic meters of quality work space that can cater to almost 2000 employees, in the year 2012….(Swiss watch news, 2009) Product innovation helps Rolex watches are made as per the specific customer requirements. For example, Rolex Submariner and Rolex Oyster were designed keeping in view the water sports, while their Explorer range of watches was developed specifically for mountaineers and those needing use of watches in rough and inhospitable terrains. Similarly, Rolex GMT Master was designed to assist pilots with multiple time zones, as the company developed these watches in 1954. While product innovation has been of supreme importance for the company, their time pieces and wrist watches are remembered for reasons other than finding time or date. For example, Rolex gained huge media attention, when its Oyster Perpetual wrist watch helped in solving a murder mystery of English Channel, in 1996…..(Morgan, Good reasons why to buy Rolex watches) In addition, the company has least dependence on its suppliers as most of the quality control measures are in-house, for every stage of manufacture. As the entire manufacturing process of the company is customer-oriented, Rolex have a dominating position, with respect to its suppliers, which means maintenance of better quality throughout. PEST analysis for Rolex Political As luxury watch manufacturers are faced with growing grey market and duplicate/ counterfeit products that sell more than genuine products in certain regions of the world, political awareness and action is required to face this menace. Therefore, Rolex requires lobbying with various governments on the issue of curbing such duplication, which is illegal, in any case. Economic As spending on luxury items would come after the essential goods and services are acquired, luxury watch segment was hit hard during the recent financial crisis. Accordingly, it was observed that sales of high value watches were down by almost 40%, while the demand for cheaper duplicates increased during the recent past….(Frank, 2009. The luxury watch bust) Social As building of brand image helps many companies, particularly in high value marketing business; it is essential that the business houses like Rolex remain active at all social fronts. Accordingly the company has maintained the customer loyalty for its brand, using various innovative marketing techniques. These include, among others, pioneering work done by the company in promoting new enterprises, bringing innovation in medicines and technology, while pursuing exploration and discovery that can lead to strengthening of their brand image and loyalty. ……(Rolex awards for enterprise, 2009) Technological Continuous research and development is essential to meet the challenge posed by the counterfeit market, particularly for the luxury watch segment. As per reports, the demand for counterfeit watches increased by almost 6%, while the main market for all types of Rolex duplicate watches has been USA, which caters to almost 66% of the world grey market for these products……(WWR on counterfeiting, 2009) SWOT analysis for Rolex Strength Rolex at present is manufacturing around 900,000 watches in a year, which includes its own, along with the Tudor, brand. This in itself, being a remarkable feat, many competitors are not able to meet these production figures, any way. As per reports, Rolex is the biggest industrial user of gold in Switzerland. Apart from this, Rolex has its strength in the quality workforce of about 6000 dedicated workers, who are involved in making innovative watches that cater to specialized needs of every type of customers. Hence, building the brand image through customer loyalty has remained the company’s driving force, since many years….(Simonian, Rolex: intriguing riddle…, 2009) Weakness Flexibility is essential when penetrating new market segments. However, with the conservative and strict opaque character of working atmosphere at Rolex, the company can face hurdles, in combating the challenges posed by its competitors. This can also cause erosion of customer loyalty and well established brand image, in the long run. Opportunities Looking beyond the markets of USA, Rolex can focus on the new opportunities that emerge within the countries, which are developing fast. These include emerging economies like China and India, which can offer a magnitude of sales opportunities for the company to sell its medium priced as well as luxury watches. As per WWR, the demand for luxury watches in Asia is increasing constantly, while its market share for these products has gone to 13.2% of the worldwide demand. This includes around 7.5% from China and 5.5 % from Japan………..(WWR, 2009) Threats Grey market and counterfeit production is the real threat to the company, which it can meet by increasing customer awareness and launching innovative programs to maintain its brand image. SUMMARY Future strategy for the company Although the company has been making watches exclusively for the specified customer groups, the company should start thinking in terms of building brand image which has the involvement of general masses. Hence, manufacturing products for common people would provide a huge push to company’s marketing strategy. In addition, it would be easier for the company to do so, as they can build future strategy on their existing brand image along with the customer loyalty and satisfaction. BIBLIOGRAPHY In-text citation references and list of sources used Frank Robert, 2009, “The Luxury Watch Bust’, available at: http://blogs.wsj.com/wealth/2009/07/22/the-luxury-watch-bust/tab/article/ (accessed on 17th April, 2010) Liebeskind David, “What makes Rolex tick”, available at: http://w4.stern.nyu.edu/sternbusiness/fall_winter_2004/rolex.html (accessed on 17th April, 2010) Morgan M.J., “Good reasons why to buy Rolex watches”, available at: http://www.sooperarticles.com/shopping-articles/fashion-articles/good-reasons-why-buy-rolex-watches-39488.html (accessed on 17th April, 2010) “Rolex Awards for Enterprise”, Available at: http://www.fhs.ch/en/news/news.php?id=681(accessed on 17th April, 2010) (accessed on 17th April, 2010) Simonian Haig, 2009, “Rolex: intriguing riddle…..”, available at: http://www.ft.com/cms/s/0/9fe18e72-18cb-11de-bec8-0000779fd2ac.html (accessed on 17th April, 2010) Smith E.B., 1996, “Worth the wait”, available at: http://www.capetowndiamond.com/newmenu/educational/investment/rolexart.shtml (accessed on 17th April, 2010) Swiss Watch News, 2009, available at: http://www.fhs.ch/en/news/news.php?id=728 (accessed on 17th April, 2010) WWR, 2009, “WWR on counterfeiting”, available at: http://www.pr.com/press-release/141472 (accessed on 17th April, 2010) Read More