Branding Strategy Insider helps marketing oriented leaders and professionals like you build strong brands. BSI readers know, we regularly answer questions from marketers everywhere. Today we hear from Thomas, a Senior Marketing Executive in New York, New York who has this question about the brand strategy behind global watch brands.
We have a relatively new (quartz analogue) watch brand that has achieved modest success. From a brand perspective what should we be considering as we move to strengthen our position in global markets?
Thanks for your question Thomas. At The Blake Project we have helped five global watch brands answer this very question. Let’s start with what is influencing success and failure in the marketplace.
Overview Of The Global Watch Market
The global watch market is expected to register a CAGR of 9.92% during the forecast period 2019 to 2024, driven by demand for smart watches and Swiss-made luxury watches. This growth in demand is attributed to the superior quality, enhanced design and craftsmanship, and technological sophistication of Swiss-made watches.
APAC accounts for the maximum market share and will continue to dominate the market for the next few years. Key reasons are expanding middle class population segment, increased consumer propensity toward luxury products, wider product portfolios and the launch of new and innovative products in the region.
Competitive Landscape And Key Vendors
The global watch market is highly consolidated due to the presence of a few established vendors who compete mainly on the basis of product differentiation, portfolio, and pricing. Increasing product portfolio extension is expected to intensify the prevailing competition. Product pricing and innovation are expected to drive the market for the next few years.
Segmentation By Distribution Channel
- Speciality stores
- Departmental stores, hypermarkets, and supermarkets
The speciality store segment dominates the watch market and accounts for a major part of the overall market share. These retailers focus exclusively on watches and related accessories and generally stock a wide variety of products. The brand identification factor among younger consumers is the key to the dominance of this segment in the global watch market.
Segmentation By Product And Analysis Of The Watch Market
- Quartz watch
- Mechanical watch
Quartz Analogue Watches account for more than half of the global sales of watches in terms of value. With the rising demand for simply traditional time keeping function watches, the quartz watch segment is expected to gain higher growth rate in the developing countries in the next few years. However, worries about global trade, the rise of the smartwatch, and an industry-wide restructuring dull some of the optimism.
In light of this context, there are several questions you should be asking yourselves:
1. Business Plans – how does the brand intend to capitalize on the expected organic growth in the sector? Specifically, how are you going to make the most of the ‘search for quality’ that is driving growth?
2. Distribution Plans – in the light of the segmentations described above, what plans do you have to grow penetration into speciality stores and departmental stores and hypermarkets? Which markets do you intend to expand, and why? – APAC, Europe, North America, and the rest of the world?
3. Product Enhancement – what changes will you be making to the range over the next few years – for example in materials or types of products (quartz watch and mechanical watch)? Will this change your core audiences? If so, where and how?
4. Competitor Response – how do you expect the likes of Fossil Group, LVMH, Rolex, The Swatch Group, Daniel Wellington and others to drive changes in the market over the next few years? How do you expect to counter these competitive initiatives?
5. Audience – have you done any work on audience personas? What drives them to buy your brand? What do they see in the brand that they readily identify with?
6. Differentiation – What is your core differentiating factor? How do you commit to that factor in ways that others don’t? How will that affect how the business moves forward? How will you retain your distinctiveness? Can you leverage the country of origin effect that comes with manufacturing in Switzerland?
7. Short And Long Term Goals – what are your goals for the business in terms of volumes, market share, margins etc. over the next few years? Given that you are in a market with such healthy CAGR, is your intention to keep pace with market growth or to outstrip it? If you intend to grow faster than the market, how do you intend to do that?
With the answers to these questions you will have some of the code needed to reveal what is holding you back and what could move you forward. In our brand and growth strategy work, we answer these questions and others with the senior leadership team, typically in Mission, Vision and Values, Brand Positioning and Brand Growth Workshops.
I hope you find this helpful Thomas.
The Blake Project Can Help You Grow: The Brand Growth Strategy Workshop
Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Growth and Brand Education