Luxury Watches

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Marketing 48-Hour Report:
The Jewelry Industry – Luxury Watches

Section 2 – Group Number 7

Group Members:

Executive Summary

Rolex is currently facing a problem in their brand positioning in the U.S. luxury watch market. In the years following the 2008 recession, Rolex’s competitors Breitling and Omega have outpaced them in market share growth. This report aims to analyze the reasons behind this decline and to provide a recommendation for Rolex to reaffirm position as the market leader.

Our industry analysis shows that despite suffering from the sales decline during the recession, the luxury watch market  has regained a growth rate of 7% after 2010. The intense competition within the industry and increasing usage of mobile phones for timekeeping have transformed consumers’ preferences for watches. The target market of the luxury watch market consists of affluent males with higher education  and active lifestyle. They perceive luxury wristwatches as a piece of craftsmanship that represent their identity and socioeconomic status.

The competitor analysis depicts that in the luxury watch market, although Rolex has established its reputable image as the market leader, it has not achieved effective marketing strategies and not adapted to consumers’ needs and desires. In contrast, Omega has responded to changes in consumers’ preferences and Breitling has evolved its core brand image to capture more market share.

Our short term recommendations for Rolex revolve around addressing the current, known consumer shift to mechanical watches, as well as fixing realigning their marketing to be forward facing with thetowards the 35-44 age category of a decade ago, but to the 35-44 category of today. This involves pushing their current Daytona line as well as finding a fresh new brand ambassador such as Orlando Bloom.

In the long term, Rolex needs to connect to the younger consumer segment and fix their current image of being a dated or grandfatherly watch. They also need to react faster to market trends and leverage their position as the industry leader to set trends instead of remaining passive in the market. We recommend they start a Rolex membership club and to start hosting exclusive events targeting the affluent young male crowd to build their future customer base. Intro

This report analyzes the luxury wristwatch segment of the jewelry industry in the U.S., specifically the brand positioning of Rolex as compared to the their competitors Omega and Breitling. In recent years Rolex has not kept pace with other companies in the luxury watch industry in terms of trends, image and ultimately market share. Omega’s market share has been trending upwards worldwide (World Watch Report, 2012) and Breitling in particular has just finished a co-branding campaign that positioned them in closer competition with Rolex in the U.S. and increased market share by an impressive 8% (World Watch Report, 2012). By analyzing the jewelry industry, target segment, direct competition, and the strengths and weaknesses in Rolex’s company and brand, this report provides recommendations for Rolex that will help to reposition the brand to recapture market share in the U.S. luxury wristwatch market.


Most jewelry sold in the U.S. is imported (“Jewelry Retail”. 2011), and the luxury wristwatch segment is dominated by Swiss watchmakers. The Swatch Group, owners of Omega, are the largest and only public Swiss watch company. They compete alongside a multitude of strong private companies. The market leaders in this luxury category are Rolex, Omega and Cartier and combine for a (global) market share of 41% (World Watch Report, 2012).

The performance of the jewelry industry, comprised of diamond jewelry and loose diamonds (45%), watches (13%), gold jewelry (10%), and colored gemstone jewelry (8%), is strongly correlated to the performance of the economy (INSEAD report,...
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