Swiss Luxury Watchmaking Industry: Celebrity Endorsement and Sponsorship Communication Strategy

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The Swiss Luxury Watchmaking Industry A general overview and a closer look at the celebrity endorsement and sponsorship communication strategy used by the leaders.

Karine Gautschi January 2005 HEC Lausanne – Hautes Etudes Commerciales, MIM – Master of International Management Thesis Director, MIM: Professor Stéphane Garelli Expert, Omega: Jean-Pascal Perret

Table of Contents
1 2 INTRODUCTION .............................................................................................................. 1 LUXURY WATCH INDUSTRY: A SHORT OVERVIEW .................................................. 3 2.1 2.2 3 DEFINITION AND PRICE SEGMENTATION ........................................................................ 3 LUXURY BRANDS AND THEIR POSITIONING ..................................................................... 5

ANALYSIS OF THE LUXURY WATCH INDUSTRY........................................................ 7 3.1 THREAT OF NEW ENTRANTS .......................................................................................... 9 Capital requirement ............................................................................................ 9 Brand recognition ............................................................................................... 9 Distribution........................................................................................................ 15

3.1.1 3.1.2 3.1.3 3.2

BARGAINING POWER OF BUYERS ................................................................................. 17 Established brand............................................................................................. 17 Newcomers....................................................................................................... 18

3.2.1 3.2.2 3.3

BARGAINING POWER OF SUPPLIERS............................................................................. 18 Suppliers of movements................................................................................... 19 Watchmakers’ training...................................................................................... 21

3.3.1 3.3.2 3.4

THREAT OF SUBSTITUTE PRODUCTS ............................................................................ 21 Counterfeits ...................................................................................................... 21 Luxury products ................................................................................................ 22

3.4.1 3.4.2 3.5 3.6 4

INTENSITY OF RIVALRY AMONG EXISTING COMPETITORS ............................................... 24 Advertising Battle ............................................................................................. 24 CONCLUSION ............................................................................................................. 27

3.5.1

COMPETITIVE STRATEGY IN THE LUXURY WATCHMAKING INDUSTRY ............. 29 4.1 DIFFERENTIATION ...................................................................................................... 29 Product Campaign............................................................................................ 30 Celebrity ........................................................................................................... 31 Technology and watchmaking tradition............................................................ 32 Family ............................................................................................................... 33 Humor............................................................................................................... 34

4.1.1 4.1.2 4.1.3 4.1.4 4.1.5 4.2 4.3 4.4 4.5 5

OVERALL COST LEADERSHIP ....................................................................................... 35 FOCUS ...................................................................................................................... 36 STUCK IN THE...
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