CHAPTER 1. INTRODUCTION
The definition that many marketers learn as they start out in the industry is: Putting the right product in the right place, at the right price, at the right time.
It's simple! You just need to create a product that a particular group of people want, put it on sale some place that those same people visit regularly, and price it at a level which matches the value they feel they get out of it; and do all that at a time they want to buy. Then you've got it made! There's a lot of truth in this idea. However, a lot of hard work needs to go into finding out what customers want, and identifying where they do their shopping. Then you need to figure out how to produce the item at a price that represents value to them, and get it all to come together at the critical time. But if you get just one element wrong, it can spell disaster. You could be left promoting a car with amazing fuel-economy in a country where fuel is very cheap; or publishing a textbook after the start of the new school year, or selling an item at a price that's too high – or or too low – to to attract the people you're targeting.
The marketing mix is a good place to start when you are thinking through your plans for a product or service, service, and it helps you you avoid these kinds of mistakes. Understanding the Tool The marketing mix and the 4 Ps of marketing are often used as synonyms for each other. In fact, they are not necessarily the same thing. "Marketing mix" is a general phrase used to describe the different kinds of choices organizations have to make in the whole process of bringing a product or service to market. The 4Ps is one way – probably probably the best-known way – of of defining the marketing mix, and was first expressed in 1960 by E J McCarthy. The 4Ps are:
Product (or Service).
Place.
Price.
Promotion.
A good way to understand the 4Ps is by the questions that you need to ask to define your marketing mix. Here are some questions that will help you understand and define each of the four elements: Product/Service
What does the customer want from the product/service? What needs does it satisfy?
What features does it have to meet these needs?
Are there any features you've missed out?
Are you including costly features that the customer won't actually use?
How and where will the customer use it?
What does it look like? How will customers experience it?
What size(s), color(s), and so on, should it be?
What is it to be called?
How is it branded?
How is it differentiated versus your competitors?
What is the most it can cost to provide, and still be sold sufficiently profitably? (See also Price, below).
Place
Where do buyers look for your product or service?
If they look in a store, what kind? A specialist boutique or in a supermarket, or both? Or online? Or direct, via a catalogue?
How can you access the right distribution channels?
Do you need to use a sales force? Or attend trade fairs? Or make online submissions? Or send samples to catalogue companies?
What do you competitors do, and how can you learn from that and/or differentiate?
Price
What is the value of the product or service to the t he buyer?
Are there established price points for products or services in this area?
Is the customer price sensitive? Will a small decrease in price gain you extra market share? Or will a small increase be indiscernible, and so gain you extra profit margin?
What discounts should be offered to trade customers, or to other specific segments of your market?
How will your price compare with your competitors?
Promotion
Where and when can you get across your marketing messages to your target market?
Will you reach your audience by advertising in the press, or on TV, or radio, or on billboards? By using direct marketing marketing mailshot? Through Through PR? On the Internet? Internet?
When is the best time to promote? Is there seasonality in the market? Are there any wider environmental issues that suggest or dictate the timing of your market launch, or the timing of subsequent subsequent promotions?
How do your competitors do their promotions? And how does that influence your choice of promotional activity?
The 4Ps model is just one of many marketing mix lists that have been developed over the years. And, whilst the questions we have listed above are key, they are just a subset of the detailed probing that may be required to optimize your marketing mix. Amongst the other marketing mix models have been developed over the years is Boom and Bitner's 7Ps, sometimes called the extended marketing mix, which include the first 4 Ps, plus people, processes processes and physical physical layout decisions. decisions. Another marketing mix approach is Lauterborn's 4Cs, which presents the elements of the marketing mix from the buyer's, rather than the seller's, perspective. It is made up of Customer needs and wants (the equivalent of product), Cost (price), Convenience (place) and Communication (promotion). In this article, we focus on the 4Ps model as it is the most wellrecognized, and contains the core elements of a good marketing mix.
Using the 4Ps Marketing Mix Model The marketing mix model can be used to help you decide how to take a new offer to market. It can also be used to test your existing marketing strategy. Whether you are considering a new or existing offer, follow the steps below help you define and improve your marketing mix. 1. Start by identifying the product or service that you want to analyze. 2. Now go through and answer the the 4Ps questions – as as defined in detail above. 3. Try asking "why" and "what if" questions too, to challenge your offer. For example, wh y your ask why your target audience needs a particular feature. What if you drop your price by
5%? What if you offer more colors? Why sell through wholesalers rather than direct channels? What if you improve PR rather than rely on TV advertising? 4. Once you have a well-defined marketing mix, try "testing" the overall offer from the customer's
perspective,
by
asking
customer
focused
questions:
1. Does it meet their needs? (product) 2. Will they find it where they th ey shop? (place) 3. Will they consider it's priced favorably? (price) 4. And will the marketing communications reach them? (promotion)
5. Keep on asking questions and making changes to your mix until you are satisfied that you have optimized your marketing mix, given the information and facts and figures you have available. 6. Review you marketing mix regularly, as some elements will need to change as the product or service, and its market, grow, mature and adapt in an ever-changing competitive environment.
Key Points
The marketing mix helps you define the marketing elements for successfully positioning your market offer. One of the best known models is i s the Four Ps, which helps you define your marketing options in terms of product, place, price and promotion. Use the model when you are planning a new venture, or evaluating an existing offer, to optimize the impact with your target market.
New Perspective of 4 P’s
You‘ve done your market research. You‘ve learned about the history and life -cycle
of
products like yours and the trends and key drivers that determine where your products or services ―fit in the industry‖ Now it‘s time to distill your research findings into a
concentrated effort to generate a product that reflects your business goals and objectives while providing solutions (price, packaging, convenience) convenience) for the customer. Under the old marketing model, we sold what we made or produced. Under the new model, we must sell what the customer wants. The old Marketing Mix looked at the 4Ps of marketing - product, price, place and promotion. Whether you are thinking of setting up, starting or expanding your business or selling any product or service, these four elements should be topof-mind all the time: 1. THE PRODUCT: Exactly what product or service are you going to sell to this market? Define it in terms of what it does for your customer. How does it help your customer to achieve, avoid or preserve something? You must be clear about the benefit you offer and how the customer‘s life or work will be improved if i f he or she
buys what you you sell. 2. THE PRICE: Exactly how much are you going to charge for your product or service, and on what basis? How are you going to price it to sell at retail? How are you going to price it at wholesale? How are you going to charge for volume discounts? Is your price correct based based on your costs costs and the prices prices of your competitors?
3. THE PLACE: Where are you going to sell this product at this price? Are you going to sell directly from your own company or through wholesalers, retailers, direct mail, catalogs or the Internet? 4. THE PROMOTION: Promotion includes every aspect of advertising, brochures, packaging, packaging, salespeople and sales methodology. How are you going to promote, advertise and sell this product at this price at this location? What will be the process from the first contact with a prospect through to the completed sale? Everyone who has studied marketing in the last 50 years has been introduced to the 4Ps. It was E. Jerome McCarthy who originally developed the mnemonic, the 4Ps of marketing, which serves as a neat and memorable classification system of the various elements of marketing. Originally, McCarthy defined the marketing mix as a combination of controllable factors at a marketer‘s command to satisfy a target market.
Creative marketing with the 4Ps dictates constantly questioning existing situations and looking for ways to enhance your marketing mix - deleting existing products or services, selling them at a different price, offering them in different places or promoting them differently. However, it does not require abandoning your core marketing concepts. In recent years, there have been attempts to develop a package (mix) that will not only satisfy the needs of the customer, but simultaneously maximize the performance of the organization. This model suggests the expansion of the marketing mix to 5Ps to include People or Personnel. However, this mix does nothing to address the ―uncontrollable‖ factors affecting
your marketing. Controllable factors vs. uncontrollable facts can be defined as: Controllable -
The 4Ps representing the elements of marketing we can control internally.
They depend upon such ―givens‖ as your budget, personnel, creativity, etc. Uncontrollable -
The current economic environment including such elements as consumer
confidence, degree of unemployment, new technologies, the threat of displacement, competitors, government regulations or changing consumer preferences. Many marketing specialists are now seeing the 4Ps as too product-oriented and have adopted the 4Cs marketing mix. This model looks at the marketing from the customer‘s point of view.
1. Place becomes Convenience 2. Price becomes Cost to the user 3. Promotion becomes Communication 4. Product becomes Customer needs and wants These C‘s reflect a more client -oriented
marketing philosophy. They provide useful
reminders - for example that you need to bear in mind the convenience of the client when deciding where to offer a service. To apply the 4Cs approach to marketing you must consider the impact of the ―uncontrollable‖ elements on your marketing mix. The 4Cs explicitly
require you to think like a customer.
How the Internet has affected the 4 P’s
Of all the industries whose methods and practices have been turned upside-down by the Internet, marketing has arguably experienced, and enjoyed, the greatest changes. Customer profiling, response analysis, transactional messaging, recommendation engines – with all these tools available, eMarketers have never had it so good. But… how much has the new
technology altered the basics of what marketing really is? My answer is: not much. The fundamentals remain the same. But that is not to say that we can still apply them in the same way. The online world of eCommerce has certainly broken down some of the old established truths, so every now and again it is worth stepping back and taking a fresh look at what you learned about marketing through the lens of technology. In practical terms, this means revising the old marketing processes, concepts and emphasis and reconstructing them into new forms that are more appropriate for the new world of communications. As an example, we can consider McCarthy‘s famous ‗4 Ps‘ classification, which has provided a standard method of describing marketing programs for over 50 years. Product
The first P is is for Product . Here the Internet can be the medium for purchase (e.g. typical online retailers) or the medium for the product itself (social media, cloud storage, etc.).
In the first case, you need to make up for the loss of the physical shop experience: touching the product, trying it on/out, speaking to the shop assistant. So make sure you have enough images, or even better a video, and have a clearly visible forum for questions. And of course think about the cross-selling opportunities. Very few products are used in complete isolation, so there is no excuse not to give the customer the benefit of your experience in terms of what other customers have also bought. If the product is itself Internet-based, even better. You can offer trial versions, demos, upgrades…the opportunities are endless. But whatever product you are marketing, don‘t
forget the search engines! The best presentations are worthless if customers cannot find you and this is the task for SEO-copywriting, which brings us on to the next P . Promotion
Promotion is where the Internet really comes into its own. Search-engine optimisation (SEO) is a must-have for all online businesses and pay-per-click (PPC) advertising is also a very cost-effective tool. And of course social media and email are great ways to get your products known. But keep abreast of the latest social network trends. Tapping into this huge resource can be as dangerous as it is rewarding, and the trick is to let the network members promote your products for you. By all means create profiles in all relevant social media resources, resources, and become involved in their activities (engaging in groups, adding friends, commenting, etc.), but don‘t fool yourself that you are in complete control of how your products are presented
and discussed. Price
Don‘t be afraid to put prices of goods and services on your web site and
in promotional
materials. It has been shown that that promotional content with price information, whether text ads, banners or anything else, has a higher response and conversion rate. And since price is usually the defining criterion when customers browse for products you will do yourself no favours by hiding it. Place
In this context, Place means positioning in the major search engines. Most online businesses actively invest in SEO, either in-house or outsourced, and this is probably the single most important factor when it comes to planning your emarketing strategy. Promotion through
advertising display, using media advertising and banners as promotional material can also be extremely effective if they are properly prepared and implemented. So, a lot of the old marketing concepts are still alive and well in the Internet age. But there are also a number of innovations that have indeed changed the landscape for eMarketers. Over the past few years, companies such as Google, Yahoo, and Microsoft have revolutionised the online advertising market, offering services for local advertising and communications for small and medium business. Return on investment has increased while costs became lower. This type of marketing has become the basis of modern capitalism, allowing anyone who has an idea, product or service to reach r each a global audience, regardless of how specialised their market it. Another new element in eMarketing is Big Data – the the ability to collect, analyse and act on enormous amounts of customer and product information. Already, recommendation engines are making inroads into eMarketing strategies and the goal of reliable, predictive one-to-one marketing is no longer seen as a pipe dream. In conclusion, the Internet may be changing the way we market our products, but it hasn‘t changed why we market them. The old concepts still hold true, but there is no turning back from the new methods that technology make possible. Although the world of marketing has changed significantly since the '60s, all MBA students, marketers, and strategy consultants are still expected to know and apply the Four P‘s as if
they were laws of nature. Some would argue that the digital revolution has yet to radically change the teachings of the Four P‘s.
But a closer look at som e of today‘s fastest-growing brands shows that time has buried the Four P‘s. Companies can no longer use them to gain a competitive advantage and meaningful
differentiation. In fact, they more and more look like the roadmap to failure.
THE THREE DEAD P’S
Let‘s look at promotion.
In recent years, we have seen the explosive growth of companies
that don‘t do any advertising at all. Zara, one of the largest and fastest -growing brands, never advertises. Facebook didn‘t grow to 800 million users through
fashion
any type of
promotion. And although although the company thrives off advertising, advertising, Google only recently recently started to advertise. In the Plex, a new book about the rise of Google, Steven Google, Steven Levy tells the story of how Google‘s first VP of marketing Scott marketing Scott Epstein suggested an elaborate marketing plan based on the Four P‘s. Google founders Sergey
Brin andLarry andLarry Page rejected his plan outright, and Epstein left
the company shortly thereafter. ―It really came down to this,‖ a Google employee told Levy, ―do we want to put money into the technology, into the infrastructure, into hiring really great people? Or do we want to blow it on a marketing campaign we can‘t measure?‖ Google didn‘t need marketing; the search engine was so good that it spoke for itself. Few
companies are lucky to have such a powerful product, but the essential rationale is the same for everyone: A penny spent on campaigns is a penny less spent on creating user value. In a transparent, digitally empowered world, only the best offerings survive, so companies that spend on promotions have a cost disadvantage. Importantly, the decline of promotion does not mean that brands don‘t matter; it just means
that their value hinges less on costly marketing campaigns. The other P‘s are just as dispensable. Place is obviously becoming less and less important as
more commerce moves online. And price is also less of a potential strategic marketing advantage. With price, comparison sites like Tripadvisor.com, Pricegrabber.com, and Bizrate.com, many companies are forced to let raw market forces determine the price of their products. A PENNY SPENT ON ADS IS A PENNY LESS SPENT ON USER VALUE. ONLY PRODUCT MATTERS
So what is today‘s marketer left with as a way to build a strategic advantage? The product.
The only real way for a company to build a growing brand is to design products and services that are so good that they become marketing vehicles in and of themselves. Or put in broader economic terms: The golden rule for today‘s hyper competitive and information -rich markets
is this: The only way you can increase the value of your brand is by increasing the value of your offering.
That value isn‘t defined solely by greater usability, though that‘s a part of it; value is to a
greater and greater degree determined by the emotional connection a user has to a product. Great design creates emotional value. Bold social actions by a company and great, or even free, services do the same. But in the post-advertising world, there is no simple formula for creating emotional value--apart from producing an outstanding product. This One-P marketing rule will have profound ramifications for how companies organize their marketing, split their marketing budget, and integrate product development, design, and brand building--not to mention for the $450-billion-plus/year $450-billion-plus/year marketing industry. But at least one ―P‖ will be easier to learn than four.
CHAPTER 2. ANALYSIS Introduction and History Rolex SA and
its subsidiary Montres Tudor SA design, manufacture, distribute and service
wristwatches sold under the Rolex and Tudor brands. Founded by Hans Wilsdorf and Alfred Davis in London, England in 1905 as Wilsdorf and Davis, Rolex moved its base of operations to Geneva, Switzerland in 1919. Forbes ranked
Rolex No.57 on its 2012 list of the world's most powerful global
brands. Rolex is the largest single luxury watch brand, producing about 2,000 watches per day, with estimated 2012 revenues of approximately US$4.5billion. Rolex is the leading name in luxury wristwatches. It is headquartered in Geneva, Switzerland, but relies on 4,000 watchmakers in more than 100 countries. It created the world's first waterproof watch in 1926. Some of the world's most famous athletes pitch Rolex watches including: Tiger Woods, Phil Mickelson, Roger Federer and Lindsey Vonn. Hans Wilsdorf and his brother-in-law, Alfred Davis, founded Wilsdorf and Davis, the company that would eventually become Rolex SA, in London, England in 1905. Wilsdorf and Davis' main business at the time was importing Hermann Aegler's Swiss movements to England and placing them in quality watch cases made by Dennison and others. These early wristwatches were sold to jewellers, to jewellers, who who then put their own names on the dial. The earliest watches from Wilsdorf and Davis were usually hallmarked "W&D" inside the caseback. In 1908, Wilsdorf registered the trademark "Rolex" and opened an office in La Chaux-deFonds, Switzerland. Fonds, Switzerland. The company name "Rolex" was registered on 15 November 1915. The book The Best of Time: Rolex Wristwatches: An Unauthorized History by Jeffrey P. Hess and James Dowling says that the name was just made up. One story, never confirmed by Wilsdorf, is that the name came from the French phrase horlogerie exquise, meaning "exquisite clockwork" or as a contraction of "horological excellence". Wilsdorf was said to want his watch brand's name to be easily pronounceable in any language. He also thought that the name "Rolex" was onomatopoeic, was onomatopoeic, sounding sounding like a watch being wound. It is easily pronounceable pronounceable in many languages and, as all letters have the same size, allows to be written symmetrically. It was also short enough to fit on the face of a watch. watch .[8]
In 1914, Kew Observatory awarded a Rolex watch a Class A precision certificate, a distinction which was normally awarded exclusively to marine to marine chronometers. In 1919, Wilsdorf left England due to wartime taxes levied on luxury imports as well as export duties on the silver and gold used for the watch cases driving costs too high and moved the company to Geneva, to Geneva, Switzerland, Switzerland, where it was established as the Rolex Watch Company.
Its name was later changed to Montres Rolex, SA and finally Rolex, SA. Upon the
death of his wife in 1944, Wilsdorf established the Hans Wilsdorf Foundation in which he left all of his Rolex shares, making sure that some of the company's income would go to charity. The company is still owned by a private trust and shares are not traded on any stock exchange. In December 2008, the abrupt departure of Chief Executive Patr ick Heiniger, for ―personal reasons‖, was followed by a denial by the company that it had lost 1 billion Swiss billion Swiss
francs (approx £574 million, $900 million) invested with Bernard with Bernard Madoff, the Madoff, the American asset manager who pleaded guilty to an approximately £30 billion worldwide Ponzi worldwide Ponzi scheme fraud. Heiniger died March 5, 2013, after a long illness, according to an official statement issued by Rolex SA. Today, Rolex watches are popularly considered status considered status symbols. Among the company's innovations are:
The first waterproof wristwatch "Oyster", 1926
The first wristwatch with an automatically changing date on the dial (Rolex Datejust ref.4467, 1945)
The first wristwatch case waterproof to 100 m (330 ft) (Rolex Oyster Perpetual Submariner ref.6204, 1953)
The first wristwatch to show two time zones at once (Rolex GMT Master ref.6542, 1954)
The first wristwatch with an automatically changing day and date on the dial (Rolex DayDate, 1956) Date, 1956)
The first watchmaker to earn chronometer earn chronometer certification for a wristwatch.
Rolex is the official time keeper of Wimbledon Wimbledon and the Australian the Australian Open tennis grand slams, as well as two of the four majors in golf: the Open Championship and the U.S. the U.S. Open. They Open. They
are also the title sponsor to the 24 Hours of Daytona, from Daytona, from which the Daytona model takes its name, along with the Rolex the Rolex Sports Car Series. In Series. In 2013, Rolex became the official timekeeper to the FIA the FIA Formula Formula 1 motor racing championship. Rolex has also been the official timekeeper to the Le the Le Mans 24 Hours motor race since 2001. Jacques Piccard and Don Walsh had a specially designed experimental Rolex Oyster Perpetual Deep-Sea Special strapped to the outside of their bathyscaphe during the 1960 Challenger 1960 Challenger Deep / Mariana Trench dive to a world-record depth of 10,916 metres (35,814 ft). When James When James Cameron conducted a similar dive in 2012, a specially designed and manufactured Rolex Oyster Perpetual Sea-Dweller Deep Sea Challenge watch was being "worn" by his submarine's robotic arm. Tenzing Norgay and other members of the Hillary expedition wore Rolex Oysters in 1953 at altitude 8,848 m on Mount Everest while there are attestations and speculation that Sir Edmund Hillaryeither Hillaryeither carried a Smiths Deluxe or a Rolex to the summit, or both. Mercedes Gleitze was the first British woman to swim the English Channel on 7 October 1927. But, as John E. Brozek (author of The Rolex Report: An Unauthorized Reference Book for the Rolex Enthusiast )
points out in his article "The Vindication Swim, Mercedes Gleitze
and Rolex take the plunge" ,
some doubts were cast on her achievement when a hoaxer
claimed to have made a faster swim only four days later. To silence her critics, Mercedes Gleitze attempted a repeat swim on 21 October in the full glare of publicity, thus touted the "Vindication Swim" . Hans Wilsdorf knew a good marketing opportunity when he saw one and offered her one of the earliest Rolex Oysters if she would wear it during the attempt. After more than 10 hours, in water that was much colder than during her first swim, she was pulled from the sea semi-conscious semi-conscious seven seven miles short of her goal. goal. It was during this swim that she wore the Rolex watch, contrary to popular opinion. Although she did not complete the second crossing, a journalist for The The Times wrote "Having regard to the general conditions, the endurance of Miss Gleitze surprised the doctors, journalists and experts who were present, for it seemed unlikely unlikely that she would be able to withstand the cold for so long. It was a good performance". This silenced the doubters and Mercedes Gleitze was hailed as a heroine. As she sat in the boat, the same journalist made a discovery and reported it as follows: "Hanging round her neck by a ribbon on this swim, Miss Gleitze carried a small gold watch, which was found this evening to have kept good time throughout". When examined closely, the watch was found to be in perfect condition, dry inside and ticking away as if nothing had happened. One month later, on 24 November 1927, Wilsdorf launched the Rolex
Oyster watch in the United Kingdom as the focal point of a full front page Rolex advert in the Daily Mail and the Rolex Oyster began its rise to fame. The Vienna Herald described described the 1969 Apollo moon landing as: 'an event almost as significant as the time a woman swam most of the English Channel with a waterproof watch on." '[30]
4 P’s Of Rolex
Marketing is the effort made by an organization to identify needs and wants of potential customers and then satisfying satisfying them. The most successful successful organizations are those that are the most successful in first identifying and second satisfying customer‘s needs.
Identifying
needs and then then meeting them does not not happen by accident; accident; it takes a concise plan. The marketing mix for a product is made up of the controllable factors available to organizations. A marketing manager has four tools to use when developing developing and executing a marketing plan: product; price; promotion; promotion; and place. A careful examination of the marketing mix of a company yields insight into the health and direction of the company by indicating the market being pursued pursued by the company. There are many organizations that excel at marketing products and services but the greatest example of marketing genius is displayed by the Rolex watch company. Rolex took a huge leap forward in ―1914, just before the shooting of Archduke Ferdinand
would throw the world into bloody conflict, the Bavarian Hans Wilsdorf was paying little attention to world events. Having established his London-based watch company Rolex in 1908, he had decided to test the accuracy of his products by sending them off to a Swiss observatory. It was a decision worth taking, as Rolex was rewa rded with the world‘s first timing certificate for a wristwatch‖. Because the company had had focused on wristwatches wristwatches instead of the more popular pocket watch and had garnered such a reputation for accuracy they became common common issue for soldiers during during the First World War. the First World War, as they were easier to use than pocket watches in the trenches. trenches. Rolex focused on accuracy accuracy and innovation which led to features such as a self winding wi nding mechanism and an automatic day and date window. The innovation and quality that that Rolex built into each watch soon gave gave the company a clear advantage over the competition. Considering Rolex‘s positioning in view of the components of the marketing mix will show
how the company positions its product in the marketplace. marketplace. The di scussion of Rolex‘s
marketing genius is incomplete without including the pricing structure followed by them as well as the distribution channels employed. employed. Rolex has focused on the features that are important to its customer base since the company was founded in 1908. The company has built a reputation of extreme accuracy accuracy and has been recognized as having having a very accurate watch movement. movement. The second feature feature that is important to Rolex customers is the prestige associated with the brand. The competition that Rolex faces comes from elite watchmakers and the companies that create replica watches watches that imitate the Rolex brand. brand. The competition from elite elite watchmakers is fierce and many companies companies make quality quality prestigious watches. Audemars Piguet is a watch watch that is made in Switzerland that creates high quality watches that are often more modern in style than Rolex. The Cartier Roadster Roadster watch is a direct competitor of Rolex and and has an equally accurate movement and displays a much more artistic styling than the Rolex. Consumers shop this category of watch by research and more importantly by word of mouth. The specific specific types of watches watches carried by Rolex dictate dictate how they are used. The Rolex Yacht-master is built for timing and actions necessary on a boat specifically during a yacht race and so most customers customers use it for sailing. The Rolex Submariner Submariner is a watch designed specifically for divers and was the first watch to be waterproof up to 100 meters and is now made to withstand depths of up to 300 meters. The way that Rolex creates a brand brand image is unique and extremely effective. effective. Instead of relying on a complex brand image based on words or a complex picture Rolex relies on a simple single image of a crown for its branding. The pricing strategy that the Rolex company employs is distinct in its conception and execution. Rolex sets its prices prices with little regard to the competition competition and their pricing, pricing, choosing instead to price its timepieces as it sees fit and therefore setting the price point for others to follow. The company does not offer any sort sort of discounts for customers or or any sort of price reductions or sales although occasionally there are dealers that offer discounts because of financial difficulties. Rolex does not offer discounts because consumers are willing to pay the prices set by the company as is evidenced by the fact that even during an economic downturn and faced with discounted other brands of watches the majority of luxury watch shoppers where looking for a Rolex, ―‘For every 10 clients interested in other brands,
we have 50 looking for Rolex watches,‘ Aurel Bacs, international co -head of Christie‘s watch
department, said from Geneva‖ Rolex has a very exclusive distribution network consisting of only a limited number of fine jewelry stores. A search of the area surrounding Columbia, South Carolina area reveals that only two jewelers are authorized authorized Rolex dealers. The limited availability of products products lends itself to the high end exclusive pricing strategy employed by Rolex. Rolex. The locations selected selected are all in upscale areas and have an established reputation for quality. Rolex does not have have a company outlet on the internet. The website http://www.rolex.com website http://www.rolex.comhas has information on the watch lineup and the information on dealers in the area but it does not have a location to purchase. purchase. Some of the dealers do offer online sales but all encourage encourage buyers to visit the retail retail locations. The genius of Rolex is that they have narrowed the marketing communications message being sent to a simple one that is consistently conveyed across all mediums. The company does not use many of the channels of mainstream advertising such as national television and radio advertisements advertisements that are not targeted to their market. The broad strokes of advertising advertising that are often used by large promotions such as purchasing time during large sporting events like the Super Bowl are not used by Rolex. Rolex has focused in on events that attract the type of demographic that has the desire and ability to purchase a watch from $5,000 to $100,000. $100,000. The Rolex Sports Car Series and and the Rolex 24 Hours at Daytona both attract not only race fans but sports car owners that spend large amounts of money to run vehicles in the series and so are perfect advertising opportunities for Rolex. Rolex also advertises advertises during golf tournaments tournaments and yachting events events that attract patrons that can afford to purchase an item like an expensive watch. Watching the commercials that Rolex has produced and aired in the past shows that they have a consistent message message and a consistent presentation during the advertising advertising they do air. The commercials convey prestige and wealth by displaying images of large yachts and race cars racing. The main message that is portrayed portrayed to consumers is that Rolex purchasers are wealthy, attractive, active, and and lead interesting lives. The image that is portrayed is that customers purchase Rolex as a statement and as a reward for success.
The problem that Rolex faces is that as its popularity grows more and more of the standard watches that the company makes are being cloned by watchmakers in all parts of the world. Some of the replicas are are of similar quality and are almost identical identical in appearance as an original Rolex and so those that are willing to purchase copies are able to find them in greater supply than the original. The limited distribution channels channels that have been been authorized by Rolex allow a greater demand demand for the product but also allows dealers to set prices for sales and repairs that exclude exclude many demographics. demographics. It would be better for Rolex to not only authorize additional retail outlets for its products but also offer refurbished and remanufactured originals originals on a company website. The company loses loses revenue to those that resell used watches that it could capture by controlling the value of the used market by trying to control the supply. Rolex is one of the greatest marketers of its products in the market market today. Rolex achieves success by controlling the four main tools available to marketing managers to make up the market mix: price; product; product; promotion; and place. Rolex has a firm grasp grasp on the necessity necessity to control retail pricing of its products by paying little attention to the pricing of competitive firms such as Cartier and Audemars Piguet but instead setting the price that others follow. The product that Rolex offers offers is close to unmatched unmatched in several arenas such such as timing watches for boating and and diving watches for undersea undersea diving. The promotion of its watches through television and print advertising support the sports centered approach to Rolex‘s
advertising that follows closely to the sponsorship of yachting races, sports car racing, and other sponsorships sponsorships such as skiing. Unlike most manufacturers manufacturers that try and obtain as many retail outlets for products as possible Rolex has decided to severely limit the number of outlets that can be authorized to sell the Rolex brand and those that are authorized are all required to be successful and high end jewelry j ewelry stores. The marketing mix of the Rolex watch company is an example of why not following the usual way to market products is often a good idea. idea. When the company was started started if the founder had not taken the unusual step of gaining certification as to his watches accuracy the company and and the hallmarks of the product product would not be known. It is important that successful marketing managers take advantage of the controllable tools of the marketing mix as they have done at Rolex.
PRODUCT : Driving cost out of a product by accepting adequate quality may work for a mass-market brand, but luxury branding is built on a foundation of quality, even if it means a higher price. A mediocre high-priced product will never achieve luxury status. Rolex had to be sure that the luxury watches were the best available — and and that meant the watches would be one of a kind. The strap, the dial, the look and the packaging couldn't just be whatever. The Rolex watch spells ‗class‘. Not all but a few can afford it.
It is a prestige
and esteem issue to wear a Rolex. Its advertising, publicity, corporate social responsibility are also much thought for before being implemented. Rolex watches are known for its rich look, quality and longevity of the product. It seldom happens, that a customer has a complaint with the product. Every customer is treated as a premium customer. Simply ensuring quality and uniqueness isn't the only product consideration. Imitations have to be avoided. If a comparable experience is available everywhere, the cachet is lost. Limitations help create create a luxury brand, too. too. If every watch could include a the look, feel and what the company stands for, the uniqueness would evaporate. Accommodating special requests, such as different straps, delivery at certain locations and urgent requirement add to the perception of pampering and luxury. Personalization, engraving a name on a product or in Rolex‘s case providing the customer with the best ,
helped make the difference between just
any other instrument indicating the time and a luxury experience. The name of the watch lines in catalogs is often "Rolex Oyster Perpetual ______" or "Rolex ______"; Rolex Oyster and Oyster Perpetual are generic names and not specific product lines, except for the 36mm Oyster Perpetual model, which goes by no other name and is a model unto itself. The Air-King is the least-expensive member member of the Oyster O yster Perpetual family and is meant for understated elegance and simplicity. The Date is related to the Air-King but adds a date display. Certain models from the Date and Datejust are almost identical, however the Datejust has a 36 mm case and a 20 mm bracelet compared to the Date's 34 mm case and 19 mm bracelet. modern versions of the Oyster Perpetual Date and Datejust models share Rolex's 3135 movement, with the most recent change to the 3135 movement being the introduction of Rolex's "parachrom bleu" hairspring, which provides increased accuracy. As
the Date and Datejust share a movement, both have the ability to adjust the date forward one day at a time without adjusting the time; this feature is not confined to the Datejust. The Datejust is available in a wider range of metals and has a greater range of dials available. The following are some of the variants available :
Air-King
Air-King-Date available for 1988
Date
Oyster Perpetual
Datejust
Datejust II
Datejust Turn-O-Graph
Lady Datejust Pearlmaster
Daytona
Paul Newman Daytona
Day-Date
Day-Date II
Day-Date Oyster Perpetual
Explorer
Explorer II
GMT Master II
Masterpiece
Milgauss
Oysterquartz
Sea Dweller
Sea Dweller DeepSea
Sky-Dweller
Submariner
Turn-O-Graph
Yacht-Master
Yacht-Master II
Price Generally, low prices are considered key to product success, but luxury brands are priced high. If some people aren't complaining about your prices, it's said, they aren't high enough. That may be true for general market products and services, but luxury products are, at least in part, defined by their higher price. Still, trust is key to luxury brands, and if your prices are perceived to be be artificially high the strategy strategy will backfire. Bargain sales and discounts are antithetical to the concept of a luxury brand. If a quality product is worth the price, then how can that price be reduced without sacrificing quality? To ensure people understand your devotion to quality, don't give them reason to believe you're willing to compromise it. Another way luxury brands engender trust is to avoid odd prices. A two lakh rupee watch priced at INR 1,99,999 sends a mixed message. message. If Rolex is i s succeededing succeededing in communicating that the product is of such high quality that it's worth the price, trying to trick a customer into thinking it costs less is insulting and defeats the purpose.
Rolex watches vary in price according to the model and the materials used. In the UK, the retail price for the highly sought-after stainless steel 'Pilots' range (such as the GMT Master
II) II) starts from GBP £5,250. Diamond inlay watches go for considerably more. The book "Vintage Wristwatches" by Antiques Roadshow's Reyne Haines listed a price estimate of Rolex watches that ranged between $650 and $75,000, while listing Tudors between $250 and $9,000. The most expensive Rolex ever produced by the Rolex factory was the GMT Ice reference 116769TBR with a retail price of $485,350.00. A Forbes Magazine article on the Swiss watch industry compared the retail value of Rolexes to that of competing brands Corum, brands Corum, Universal Universal Genève and and IWC. IWC.
PLACE In the general market, the premise is that broad distribution achieves the greatest sales. However, limited distribution increases perceived exclusivity — an an important component of a luxury brand. If location is the formula for general market success, limited prime location is key to luxury branding. Louis Vuitton, Gucci, Chanel, Rolex and Cartier don't have locations on Rodeo Drive in Beverley Hills, Bond Street in London, the Ginza in Tokyo, and the Champs-Èlysees in Paris because of their success. They're successful successful because that's where they put their stores. Rolex stores are generally located in areas patronized by the higher income group who can afford the brand and who actually have a liking towards it. Famous malls, exclusive showrooms, popular streets etc are basically the locations where the watches are on display and available for sale. The Rolex Watch Company could easily place its famous watches in many more outlets. Instead it restricts its coverage to only high-end jewelers who are spaced geographically and who agree to carry a certain level of inventory, use certain display patterns, and place specific levels of annual local advertising. local advertising. Rolex Rolex thus has achieved high market control and does not face poor service problems or channel conflict problems. But its market growth is slower. Whatever the number of market channels a company uses, it must integrate them to achieve an efficient supply system. Most companies rely on a high percentage of their business results coming from their channel partners. Rolex systematize partner relationship management
(PRM) through adopting PRM software. The software can improve the information flow and
reduce the cost of communication, ordering, transactions, and payment. Manufacturers use distributors to reach retailers, give up some control of the retailers and the final customers. customers. Yet if the manufacturer sold direct to either the retailers or the final customers, it would have to carry on the same channel functions of selling, financing, information gathering, servicing, risk taking, transportation, and storage. If distributors can do this better and add value, then the distributor channel is justified. Therefore the key point is that the Rolex Company performs its channel functions effectively and makes sure the product is available available is adequate adequate quantity.
PROMOTION High-volume mass advertising and hard-sell verbiage may work for general products, but for luxury brands, image ads and targeted publicity convey the right message. The vintage collection and the the modern inventions and innovations i nnovations were inherently easy to promote because because they were unusual, unusual, classy, classy, and unique. Words like sophistication, achievement, class, tradition are associated with Rolex therefore even its brand ambassadors are people who have a lot of respect and recognition in the world, Tiger Woods and Roger Federer being two classical examples. Rolex is the official time keeper of Wimbledon and the Australian Open tennis grand slams, as well as two of the four majors in golf: the Open Championship and the U.S. Open. They are also the title sponsor to the 24 Hours of Daytona, from which the Daytona model takes its name, along with the Rolex Sports Car Series. In 2013, Rolex became the official timekeeper to the FIA Formula 1 motor racing championship. Rolex has also been the official timekeeper to the Le Mans 24 Hours motor race since 2001. Its advertisements include its brand ambassadors performing activities related to their profession and and how elegantly they they carry the brand brand name – Rolex. Rolex. It provides free wristwatches to the participants of the various events they sponsor.
They also have hoardings in all the metro cities across the globe, tv advertisments, newspaper newspaper advertisements, advertisements, websites etc are regular mediums they use to reach their t heir target audience.
CHAPTER 3. CONCLUSION
Research shows that a luxury brand's profitability will increase with perceived premium value, "but only if the brand is extended into product categories adjacent to the core brand." We might have succeeded with a brand of luxury auto tours, but probably wouldn't have had much success selling premium wine. Loyalty is key in the luxury market, so make it the basis of your strategy. It's more expensive to attract a customer than to keep one; that's why loyalty is so important. Margin allows you to "pamper" your customers so that they don't go to another brand. Nordstrom famously accepted a returned set of tires even though the department store doesn't sell automotive products. Luxury brands have huge net margins, close to 80 percent, but the risks are immense i mmense because success or failure is based on an elusive, irrational, unpredictable, intangible asset — the the brand. Rolex, a leading name in this area, has been perceived as a symbol for prestige and performance for over a century. It is not only the crown logo that makes one think of the superiority of the product, but also, there is the sense of personal achievement associated with wearing it. The brand can take pride in a lot of achievements such as being placed second on the list of Superbrands in 2010 or being the first wristwatch in the world to receive the Swiss Certificate of Precision, granted by the Official Watch Wa tch Rating Centre in Bienne. However, the list can go on. Rolex was founded in 1905 in Germany by Hans Wilsdorf and Alfred Davis who used the name ‗Wilsdorf and Davis‘ as the original name, later becoming the Rolex Watch Company.
Hans Wilsdorf registered the trademark name ―Rolex‖ in Switzerland in 1908. Rolex was selected as it was easy to pronounce in every language and short enough to figure on the dial of the watch. Today, Rolex is the largest single luxury watch brand, with estimated revenues of around US$3 billion and annual annual production of between 650,000 650,000 and 800,000 watches. watches. The company has managed to maintain its position as a luxury market leader by engaging in a successful segmentation, target marketing and positioning strategy. However, this strategy
presents a new challenge to Rolex, as it faces the difficult task of becoming the watch choice of a generation of younger consumers. consumers. combined with the widely held perception of younger consumers who see Rolex as an older status symbol and not a contemporary icon of achievement did nothing but to bring the company a number of significant challenges. With an ageing target market and difficulty in attracting a younger consumer base, Rolex should rethink its plan and get rid of the over-dependence on the current market. A new generation of affluent consumers is needed to generate a vital source of business in both established and emerging markets. Unfortunately, a large majority view Rolex as the watch choice of their predecessors and parents. The average Rolex customer is 45 or older and the brand now needs to build interest, relevance and aspiration among consumers in their thirties and less, in order to drive long-term growth. All of these are nothing but the result of the strategy they built themselves, a strategy that nowadays does not suit anymore. It is in danger of being seen as an older symbol of personal wealth, instead of a crowing one of a timeless human achievement. Another big issue associated with the problem listed above is the competitors such as Omega, which is widely held by younger consumers as trendier. This helped Swatch Group AG‘s
Omega gain market share from Rolex. One reason may be their association with more recent James Bond movie (worn by Pierce Brosnan in 1995 and Daniel Craig in 2006). Rolex, on the other hand, was favoured in earlier Bond movies starring Sean Connery. Becoming aware of this matter Rolex launched Tudor brand, which was positioned as a more youthful watch, and was endorsed by Tiger Woods. Moreover, in a bid to attract teenagers, Rolex has sponsored players such as Ricky Fowler, Adam Scott and Martin Kaymer. It seems that the business is doing doing the best in trying to re-position itself. All said and done, Rolex is in a league of its own and will always be remembered as one of the world‘s most powerful and valuable brand.
BIBLIOGRAPHY
Reference books : Marketing Management – Kevin Kevin Keller & Philip Kotler. Essentials of marketing – Niall Niall Cassidy Websites: www.openforum.com www.rolex.com www.aboutit.com www.brandit.com www.consumerpsychologist.com www.learningseed.com www.researchomatic.com
