The Success Of The Swiss Company Swatch Essay Example

just selling a consumer product or even a branded product."

Swatch positioned itself as a “young, cool, trendy” product that can be an important part of your self-image. They differentiated themselves from rivals by bringing genuine emotion to the product and attacking the lower end segment instead of directly competing on price. Swatch aimed to send the message of "High quality. Low cost. Provocative."

Swatch watches were made of plastic but still offered unique and vibrant designs, incorporating youthful, stylish, unpredictable, and even whimsical elements. These characteristics appealed to the young consumer base, inspiring loyalty and attracting those seeking novel designs.

Swatch's wide range of models attracted variety-seeking customers, contributing to their increased sales and sustained growth. Their unique strategy made it difficult for competitors to imitate them. Furthermore, Swatch was able to effectively deliver on their brand promise of providing a "young, cool, trendy" look through their innovative and differentiated products. The company also implemented an unconventional pricing strategy, maintaining the same prices across all markets for several years despite their remarkable success and high demand in certain countries. They carefully managed their dealers to prevent any price mark-ups. As a result, Swatch garnered significant appreciation from consumers, who found purchasing a Swatch to be an effortless decision due to its provocative appeal.

However, the pricing strategy of Swatch did not require much thought and allowed them to distance themselves from competitors. They also set themselves apart by adopting a unique distribution strategy. Instead of opting for expensive jewelry stores and watch shops like their competitors, Swatch decided to take an unconventional retail approach. They chose to keep their watches separate from other brands by creating non-traditional mini-boutiques

and standalone Swatch stores in exclusive and high-fashion areas.

By understanding their consumer insight, Swatch took a unique approach to distribution and branding, avoiding direct competition and creating a separate brand image. Their differentiation was reinforced by a different way of distribution and branding process. In terms of promotion, Swatch was highly successful. They spent approximately 30% of the product retail price on advertising, which was more than double the industry average. Their aim was to directly reach their target audience and allow them to have a closer product experience characterized by fun, fancifulness, and a joyful outlook on life. Swatch stood out from the crowd by creating impressive activities and radical promotional stunts through an unconventional approach. For example, they hung a giant Swatch outside the tallest skyscraper in Frankfurt on the day of the product launch in Germany. They also sponsored break-dance competitions and obtained celebrity endorsements. Swatch cleverly incorporated their Swiss watch heritage into their name "Swiss + Watch = Swatch" and conveyed their message through direct and simple communication with customers.

Swatch, a Swiss brand, had a significant advantage with the launch of their product, the DM60. This advantage was the credibility it created among their target segment. Swatch implemented innovative marketing strategies such as establishing a Swatch Collectors Club for their loyal customers, who received an exclusive collectors’ Swatch each year as a membership benefit. Additionally, Swatch produced the Swatch Street Journal, providing the latest news and information about Swatch and pop culture trends.

Both activities, marketing strategy and product management, were executed innovatively and consistently to increase the relevance of their brand. As a result, a promising brand was created, which later

became a power brand. After ten years of launch, Swatch achieved great success and gained high familiarity and favorability. By 1993, they reached a volume of 31.5 million watches or a cumulative number of 154 million units from zero percent market share in the low-priced segment in the early 1980s.

The success of this achievement has brought revitalization to the entire Swiss watch industry, according to Hayek's commentary. He stated that the achievement restored credibility with the public and the trade, significantly changing the perception of Swiss watches compared to ten years ago.