Question

Introduction to Swatch group company

Answer 1

Swatch is one of the most successful brands of the Swatch Group. Its first line of plastic quartz analog line was launched in 1983, and went to become a global phenomenon. It is a cost effective, classic wristwatch, produced in endless bright, appealing designs, and even became a cult collectors’ item.

In the 1980s the merger of two companies helped create a new market for Swiss watches. Asuag and SSIH merged to create Swiss Corporation for Microelectronics and Watchmaking Industries (SMN). This merger was extremely advantages to both companies as it brought together new technology with brand recognition. The new company broke into the watch market by using a number of creative strategies. The new CEO, Ernst Thomke, restructured the managerial section of the company by bringing in new, creative executives who were hired for their creativity and energy rather than their experience in the field.
The first step to gaining entry into the new market was the creation of a redesigned product. The Swatch watch was the product that did that. It was easy to produce, had simpler components than typical watches and was able to be produced in mass quantities and is manufactured by robots rather than employees. Despite the simplicity of design it still offered benefits, such as being shock resistant and water-resistant, that more expensive watches offered.

By introducing the Swatch as a fashion accessory rather than just a timepiece, the company gained competitive advantage over other watch manufacturers. Swatch had created a niche market that other companies were not able to immediately compete in. Their unique design strategy set them apart from other companies. They simplified the process by limiting the overall style of the watch to four designs, but changed the face of the watches as often as every three months. They used the faces to reflect the season or a theme and named each new group of designs. In addition, the design made it possible to change the look of the watch without having to change the production process.
Another way SHM executives controlled the market was by limiting distribution. Many other manufacturers were selling their watches everywhere, including supermarkets and drug stores. The Swatch was only available from certain locations and by limiting availability Swatch has remained more exclusive than other watches in its price range. Another distribution strategy the executives at SMN employed was limiting the time each design was on the market. By issuing new designs as often as every three months the Swatch became not only a fashion accessory, but an item to collect.

Advertising the Swatch was a creative process designed to attract a certain segment of the population. By using activities that attract the target market, 12 to 24 year olds, Swatch further tightened its hold on the niche market. Advertising included big bold statements and colors and was put into popular magazines read by the younger generation. Swatch also sponsored activities like sporting events and used popular music themes in its commercials.
Once the Swatch became a well known brand the company decided to expand its product line. In much the same way as Swatch was marketed the new products were also assigned a theme and the theme is changed on a regular basis. Instead of placing the new products next to existing popular brands, SMN opened kiosks in major department stores so that they could control the environment their product was sold in. By doing this they simplified the adoption process consumers go through before making a purchase. A consumer will often decide they need a certain product and then they have to decide which brand to purchase. If, for example, a consumer is looking for a new knapsack they will go to the department that carries them. Here they will be given a range of products and brands to choose from and often price and/or brand loyalty will play a big part in the decision making process. By selling Swatch products in a separate kiosk the consumers are not overwhelmed with choices, they only see the products SMN wants them to see. In addition they are offered a number of products, shirts, pants, beachwear and more, that are all part of the same theme. This simplifies the process. The consumer does not need to shop around as everything needed is supplied in one spot.