The Birth of Swatch – Case Analysis
1. Why was Swatch so successful? In what ways was the Swatch different than any watch the industry had ever seen?
Swatch was successful for many reasons. First, they were able to use vertical integration to build and assemble the watches entirely in Switzerland. This lowered the production costs down to levels of its Asian competitors. Also, Swatch penetrated the low-end watch market by making Swatch more than a commodity. They were able to add emotion to the product with strong messaging, making Swatch more than just a commodity. Additionally, they did not keep flooding the market with the same watch. Every year they were able to generate a new campaign and different design, sometimes incorporating popular artists designs into their product lines. Due to these unique designs many customers had multiple watches, therefore Swatch capitalized on their already captured market.
1. What elements of the original Swatch marketing plan were most critical to the brand's success? Do you agree with the original product strategy? The channel strategy? The promotional strategy? What about the pricing strategy - what does Franco Bosisio mean when he says that the Swatch is sold at a "clean price"? Given the huge demand for Swatches (particularly for certain models), did the company make a mistake in not raising the price for some of its styles?
Swatch’s marketing plan consisted of using approximately 30% of the retail price of its watches on advertising. This was nearly twice the industry average. They also were able to use unique marketing events and advertising schemes to promote Swatch, like incorporating well-known artist designs into their product lines. Swatch also used television advertisements to market to a much broader audience. In the past, the majority of...