Huburt Watches Case Study Essay Example

watches from natural rubber, which was groundbreaking in the history of watchmaking (LVMH annual report, 2008: 44). At that time, most other luxury watch brands such as Rolex and Omega were using gold or leather as their primary materials. This material innovation not only caught the attention of customers but also set Hublot apart from its competitors.

Moreover, Hublot's exceptional and distinct products enable them to sell at a premium price point. The average cost of Hublot watches is roughly $27,283, which surpasses that of Omega and Tag Heuer. In the mid-90s, rubber was popularized as a favorite material among prominent watchmaking companies during this era. Hublot also embraced this trend by using rubber in their designs and solidifying their reputation as a classic brand. Rather than simply being a fashion trend, rubber represented a unique lifestyle, philosophy, and overall brand identity for Hublot. Currently, Hublot offers a variety of high-quality watches that are innovative, distinctive, and utilize fusion materials such as natural rubber, ceramics, technological metals, precious metals, and diamonds.

Hublot has become a popular brand in the luxury watch market, thanks to its innovative and unique products. One of its popular collections, the Big Bang, features models that boast technical complexity by incorporating traditional metals and automatic movements. Recently, the brand also launched a successful new Big Bang collection for women at the Basel watch fair. However, Hublot has not abandoned its traditional product line, which has undergone a recent redesign using a combination of rubber, gold, ceramics, and natural zircon.

Research indicates that Hublot has the largest fan base among luxury watch brands on Facebook. Market segmentation is a crucial aspect that managers hold in

high regard as it is more important to select the appropriate target markets rather than developing the marketing projects (Dubois and Duquesne, 1993: 35). Hublot utilizes demographic segmentation to understand customers' attitudes. Dubois et al. (2001: 35) identified three kinds of customers. The first group, "Elitist's Group," believes that luxury products should be small, educated, sophisticated, and refined.

The product must distinguish itself from competitors and is expensive and not suitable for mass distribution. The "Democratic group" of consumers believes that luxury goods should be mass-produced and accessible to all consumers, without requiring special education or being exclusive to refined individuals. (ibid)

Moreover, the perspective of customers is that luxury does not have to be costly or lacking in good taste and uniqueness. As revealed in (ibid), individuals in this specific segment exhibit a positive disposition towards luxury. In contrast, the "Distant group" of customers, who do not fundamentally oppose luxury, regard it as a world that is not their own. They do not find any merit or value in it, deeming it too costly and futile. In fact, they suggest that luxury should be taxed more heavily (ibid). Based on these attitudes, Hublot centers its focus on the "Democratic group," as depicted in Appendix 1 (Gautschi, 2005: 9) and Appendix 2 (ibid).

Hublot has positioned its products as affordable luxury items, which account for over 25% of the market value in 2003. This indicates numerous possibilities for Hublot. Additionally, it also creates products aimed at satisfying the demands of the Elitist's Group. Appendix 1 and Appendix 2 demonstrate that there are many brands competing in this market segment, including Omega and Tag Heuer. As a result, competition

is likely to be intense. The following section of this paper will examine how Hublot confronts this competition.

Hublot targets the affordable luxury watch market, which faces stiff competition from many competitors. The World Watch Report (2012: 8) shows Omega holding second place in the luxurious watch brand category with a market share of 15.4%. Its "Seamaster" model was the most searched for in the world in 2012 (WWR, 2012: 12). Meanwhile, Tag Heuer, another competitor, has a market share of 5%.

According to WWR (2012: 8), Hublot holds only 1.72% of the market share when compared to its two competitors, despite the fact that the overall market share is 5%. In Appendix 1, it is shown that Omega aims to target both lifestyle watches and specific watches.

Hublot's focus is primarily on the watch market, with special attention to lifestyle watches and specific styles. This strategy is meant to distinguish itself from competitors such as Tag Heuer, whose target market is placed on sports watches. According to WWR's 2012 report, replica sports watches continue to dominate the market demand. In order to compete with these competitors, Hublot will strive to gain market share by positioning their products differently.

This paper will explore how Hublot differentiates itself from competitors and achieves a unique positioning in the marketing mix. They do this through their product design and innovation. Hublot watches boast a distinctive design feature, with natural rubber bands, making them easily recognizable and distinguishing them from Omega and Tag Heuer. Additionally, Hublot keeps a strong emphasis on innovation.

Hublot is a newcomer in the luxury market that regards innovation as essential to its spirit and competitive edge. One

way this is demonstrated is through new materials such as Magic Gold, which is resistant to scratches, and a new line of watches specifically focused on Grand Complications (LVMH Annual Report, 2010:43). Combining high-tech with precious materials is a central concept of Hublot watches, leading consumers to recognize this brand as a top-tier luxury watchmaker.

Hublot has received notable recognition for its exceptional design and superb quality, including the Geneva Watchmaking Grand Prix in 2009 and the Walpole Award for Excellence in 2010 (LVMH Annual Report, 2009: 42, LVMH Annual Report, 2010: 43). These awards serve to bolster the brand's reputation as one of the most prestigious luxury brands. To further establish Hublot as a luxury brand, it has created a range of high-end watches featuring precious stones, leading to a significant increase in market share. Additionally, Hublot has also introduced a line of women's watches aimed at expanding its female market share.

Hublot has a smaller variety of models, offering only Classic Fusion, Big Bang, King Power, and Masterpieces. On the other hand, Omega and Tag Heuer have a wide range of models available. For example, Tag Heuer has 10 different models: Carrera, Targa Florio, Link, Microtimer, Alter Ego, 2000 Series, Kirium, Kirium Fl, Formula 1, Monaco and Monza. Mitchell and Papacassiliou (1997:169) found that buyers often struggle with the multitude of watch brands due to minor differences between them. This has led to information overload for consumers in the luxury watch market. To differentiate themselves from competitors and attract more customers, Hublot has chosen to focus on limited collections and special designs. Additionally, they use a high-price strategy as they position themselves as a

high-end luxury watch brand.

Compared to Omega and Tag Heuer, Hublot's product pricing is notably higher. Customers often equate high prices with quality and good taste and may view expensive products as a reflection of their social status. This can limit potential customers but still enhances Hublot's brand image. In contrast, Omega and Tag Heuer prioritize an accessible pricing strategy.

Despite some of their products being extremely expensive, the majority of their items are priced acceptably. This acceptable pricing can attract more customers, but it also limits their brand when attempting to reposition to a high-end luxury market. This is a significant factor that sets Hublot apart from both Omega and Tag Heuer, as they both intend to increase prices and decrease volume in order to gain market share in the high-end segment with more sophisticated products (Gautschi, 2005:53). Thus, this indirectly proves that Hublot has established a strong position in the high-end luxury watch market.

The supply chain of Hublot is relatively stable, particularly after being acquired by LVMH. Its manufacturing plant in Nyon was built in 2008, which ensures the quantity and quality of its products and is deemed essential for future growth. It is also a priority for Hublot to produce the UNICO movement, according to the LVMH Annual Report in 2009 (p. 46). To achieve its desired position, Hublot implements a highly selective distribution network.

Hubot's strategy of limited distribution has brought about benefits and growth, whereas Omega and Tag Heuer have opted for a mass distribution approach which can attract more customers but could also harm brand image. Nowadays, rarity is equated with value in the eyes of customers, making Hubot's selected strategy ideal

for brand positioning.

The meticulous management of stock at retail stores can also benefit Hublots. As part of its market expansion efforts, Hublot has opened new boutiques in locations where it does not have a distributor, including Shanghai, Geneva, and Kuala Lumpur (LVMH Annual Report, 2008: 45).