The Birth of Swatch

1) Why was the Swatch so successful? In what way was this watch different from
others in the industry?
Before Swatch started, Nicolas Hayek said Why cant we design a striking low
cost, high quality watch and build it in Switzerland just by reading this statement
we can come to the conclusion that this was a new innovative idea, so what
separates swatch from the rest of the other watch producers? * High quality
* Build in Switzerland
* Very low cost
Why was swatch so successful? Hayek had led the way for the success of the
swatch by committing SMH to a business strategy that in many ways defied
industry wisdom about how global watch companies should be run, this strategy
was based on: * Strict commitment to vertical integration
* Decentralized marketing
* Portfolio management
Swatch watches were a not the typical Swiss watch however they managed to
maintain a high Swiss Quality image. They were the pioneers of a new-industry.
The swatch team decided that the Swatch would have a unique message, one
unlike that of any other watch brand in the market.
2) Do you agree with the original product strategy? The channel strategy? The
promotional strategy? What about the pricing strategy?
1. The product strategy: I do agree, if swatch did not exist, Swiss manufacturers
would have lost huge market share in the sale of watches because of the high
prices. Swatch with its innovative thinking not only created a new face for Swiss
watches but also kept the majority market share of watches in the nation of
Switzerland.
2. The channel strategy: Swatch promoted and sold there watches in supermarkets, food stores and small boutiques situating it in those places you dont
attract the normal person that has already come to the decision of buying a watch
you attract the person that just encounters it in their daily life and will buy it
although they never actually thought of buying a watch.

What do you think has been the contribution of the marketing function, the product design
function and the operations function to the success of Swatch?

The success of Swatch took place despite the other branded goods equal
desperation for growth and the value-conscious consumers resistance to price increases in
an era of low inflation (Noella, 2002), and are opting for high-quality private label goods
instead of brands (Devincentis and Kotcher, 1995). Thus, Swatchs innovative evolution had
essentially had broaden their consumer base.
For Swatch, the recuperation and improvement from their diminished market share
due to their high-priced watches and the availability of low-priced brands, can be attributed to
these three factors. First, the development of their product from the use of classy materials to
plastic cased watches and the subsequent cost reduction that they garnered allowed for lower
prices. Thus, enabling them to compete with other brands.
The production process having designed to be more efficient than its competitors
allowed for the manufacture of cheaper products. The development of the operation however
was due mainly to the change in the product design; both increasing the economies of scale
of Swatch making it able to increase its target market and thus, boosting its market share. As
illustrated by Carter, Melnyk and Handfield (1995) product design is one of the primary locus
of competitiveness in today's dynamic marketplace.
What Swatch did was introduced a new trend coupled by an inherent company philosophy that
welcomes change, and positions the firm to adopt, with flexibility and ease, differing goals and strategies
as conditions warrant. And, finally, Swatch had configure itself in order to swiftly develop and launch new
products, speedily manufacture these products, and deliver them to a more sophisticated, demanding,
and competitive marketplace through the use of cross-functional and concurrent engineering structures
and processes (Carter, Melnyk and Handfield, 1995). This strategy by Swatrch can be linked to the
fundamental idea behind cross-functional teams is to include marketing, engineering, manufacturing,
finance/accounting, R&D, purchasing, quality assurance, designers, suppliers, and even customer
representatives in the early, formulative stages of the design process. This approach helped to minimize
the cost of design changes and maximize results for Swatch. According to Thomas and Sadat-Hossieny
(1995), approximately 70% of Swatchs product's ultimate cost is determined during concept
formulation, when engineering designs are in their early stages and product objectives are being
determined by marketing.

Cleverly planned, the Swatch watch took on a different role, it had transformed itself to
a piece of accessory. The packaging accorded to the new look by Swatch had offset its former
image and included the younger crowd. Thus, the marketing strategy in line with its new
design had attain a marketability extended to ignore social stratification.

No matter how impressive a product may be, it must be marketed correctly to succeed. Hayek
realized that the Swatch required the public to think about watches differently. Until the 1970s
watches were considered purely functional items that one wore to tell time. There was no
fun involved with buying or wearing a watch. Harnessed correctly, this could be used to
create an advantage over the Japanese brands. Hayek, along with his newly hired advertising
agency, decided to position the Swatch as a fashion accessory. To appeal to the consumers
emotional side Hayek hired designers from all areas, not just accessories, to create an easily
recognizable image. Swatches would not be black and white like their predecessors; they
would be alive with vibrant colors and crazy designs to match moods and senses of style. The
underlying Technical Innovation and New Product Development: Swatch strategy was to
motivate customers to buy multiple Swatches.

How do you think Swatch compares with most watch manufacturers?

As a business, Swatch seems to be exemplary: it produces watches that work and are inexpensive, and
it makes use of talented artists and designers. Swatch watches are diverting, desirable and of-themoment. Originally sold as disposable watches, they are now sought by collectors precisely because of
their creative designs. Swatch has a wide-range of watches to suit practically all tastes and ages, but
one thing is common between all its four rangesthey represent freshness and trendiness in their
designs.
A reason why Swatch is so famous today is partly because of its enthralling history. Until the 1970s,
Switzerland had a near monopoly on watch making. Then, Japanese and Hong Kong manufacturers
diligently marketed the electronic watch (actually invented by the Swiss), worldwide. Almost overnight,
Swiss watchmakers lost almost all of their market for moderately priced watches, and the industry
seemed to be on the ropes. The company overcame the crisis and was actually responsible for the
survival of the Swiss watch industry.
The core of the Swatchs strategy lies in building and highlighting 'differentiators' at all points of contact,
while targeting a wide cross-section of trend conscious consumers. By adopting this route, Swatch aims
to build a credible and 'aspirational' brand image and provide the consumers a truly international brand
experience which it believes is very critical for success in the market. their study, extension evaluations
depended on both category similarity and brand concept consistency.
Arguably, Swatch had the most successful brand extension program. Compared with Timex and Rolex,
brands with dominant associations related to performance (e.g., Timex) extended best to categories
which shared the functional association (e.g., stopwatches), and symbolic brands with dominant
associations related to prestige (e.g., Rolex) extended best to categories which shared the prestige
association (e.g., bracelets), independent of category similarity, does not enjoy the level of success by
Swatch.

Unlike other brands, the company marketed the trendy synthetic watches to young
consumers with the idea that as they grew older they would upgrade their watches to higherend SMH brands like Omega, Blancpain, or Longines. Customers often bought Swatches in
bulk, coordinating different watch styles with their wardrobes, something that Rolex and Casio
have not done.
Furthermore, Swatch launches every three months a new set of designs would be
rolled out; each would be composed of the five basic Swatch lines: formal, active sports,
casual leisure, fashion, and art. The revolving change in the lineup enticed people to buy
Swatches more frequently than absolutely necessary, just as changing fashions frequently
created a wardrobe half-full of unstylish clothes.
What do you think the Swatch operation would look like in terms of inputs, the transformation process
and outputs? Sketch out a diagram that models the marketing, product design and operations functions.

In the 1960's, the name of the game was to produce low-cost products by employing
methods of mass production. Companies built facilities as large as could be properly
managed to take advantage of economies of scale. In the late 1970's and early 1980's,
Japanese and European producers introduced lower cost goods, and U.S. producers
responded by emphasizing increased production efficiency and waste reduction philosophies.
Manufacturing strategies of lean production, inventory reduction, and just-in-time were copied
from the successful Japanese manufacturers, who established themselves as world-class,
low-cost (cheaper) producers (Jurkus and Willins, 2001). In essence, there were three basic
ways in which companies can compete: development, production, and distribution (Carter,
Melnyk and Handfield, 1995). This is where Swatch built its competitive advantage. Following
the model, we can see that Swatch had first evaluated the market, created an innovative
product design and devised a production operation that will minimize cost without diminishing
the quality of the product. Coupled with an effective marketing plan, Swatch became one of
the best selling watches of all time.

Read more: http://ivythesis.typepad.com/term_paper_topics/2008/08/swatch-caseana.html#ixzz3RmwIeuXi

Situation Analysis
1.1

Introduction

Swatch

is a wrist watch manufacturer, originated from Switzerland. Swatch is

well known on the uniqueness and the varieties of their designs, as well as becoming a
brand which follows current trends and styles. Since the brand was introduced in
1983, by placing itself under the parent company Swatch Group, Swatch has been one
of the largest and well known watch manufacturers in the world. Swatch is known for
their simple and stylish designs, which attract a lot of consumer especially young
people who are passionate and concern about their appearance and style.
Swatch products are classified in different groups, which are Swatch
Originals, Swatch Irony, Swatch Skin, Swatch Beat, and Swatch Bijoux. All these
groups are the main ranges of the Swatch products, each of the group have their subfamilies which include different designs and different choice of colors.
The

Swatch Originals are the first and the main design of Swatch. The

watches are made with plastic materials and it comes with a lot of different colors,
sizes, and designs. The Swatch Originals are the most familiar group of Swatch and it
represents the main image of the brand. The Swatch Irony is the watches that are
metal cased, the watches designs are professional and can be used in formal
occasions. The Swatch Skin is the thinner version of the Swatch Originals, the Skin
family currently holding a world record of thinnest watch which measured at 3.9
millimeters. The Swatch Beat is a decimal time concepts, the watch has digital display
and the time is set to international time zone. The Swatch Bijoux however is not a
watch product line, it is the jewelry products made by Swatch and their partner,
Swarovski.
In this Situation Analysis, the focus will be on the Swatch Originals product
line. This is relevant as the Swatch Originals gives direct brand image of Swatch and
it is the most familiar Swatch product line among the audience.

1.2 Problem Statement

Swatch is already an established brand in the market. They have been in the
industries for over 20 years and have been known from all around the world. However
in Malaysia, people may have different and negative perspective toward the brand.
Swatch is known for their simplicity and stylishness, and their watches are
known for using plastic element as the main material. For that, people tend to believe
that the price of Swatch watches are unreasonable and expensive, most people would
compare the high price of Swatch with those cheap watches in night market that look
almost the same, regardless of the high quality of Swatch watches. The other problem
is that Swatch is less known for the quality of their products, this is because they
emphasize mainly on the design of their watches. So, people would question about the
price of their product.

1.3 Objectives and Aims

Objectives

Emphasize on the quality of the products through advertisement

Bring the brand closer to the people by organizing exhibitions and contests

Change the way of approaching people using the brand image

Aims

To have people realize the quality wise of Swatch products

To balance the product image between the design and quality wise

To change people's perspective toward the price of the products

2.1 Product Name

The Swatch Originals families

2.2 Product Classification

Swatch Originals is the main design of Swatch watches which uses plastic as the main
material.

2.3 Product Characteristics

Packaging
Pricing
Unit

: Core Collection (Rebel)

: RM280
: 1 watch, Swatch Club Registration form, warranty card, manual

Packaging
Pricing
Unit

: Bicoloured Collection
: RM165
: 1 watch, Swatch Club Registration form, warranty card, manual

Packaging
Pricing
Unit

: New Gent Lacquered Collection

: RM280
: 1 watch, Swatch Club Registration form, warranty card, manual

2.4 Product Range

Product
Colors

: Core Collection (Rebel)

: black, brown, warm, blue, white,

Product
Colors
brown

: Bicoloured Collection
: pink n grey, green n violet, orange n petrol, cobalt n pink, yellow n

Product
Colors

: New Gent Lacquered Collection

: red, orangish, yellow, green, blue, black, pink, white, indigo, purple

2.5 Distribution
Swatch products are distributed directly in Malaysia. Although the products
are not manufactured locally, but the products are distributed directly through the
parent company called The Swatch Group. There are currently 10 official Swatch
outlets in Malaysia, with 5 of them alone located in Selangor, and each in Pulau

Pinang, Melaka, Sabah, Johor, and Perak. The Swatch Group Subsidiaries Office is
located in Wisma Goldhill, Kuala Lumpur.
The products are mostly available at the official outlets. However, Swatch still
uses certain retailers and wholesalers to distribute their product, but the number of
retailers and wholesalers are restricted and only up to some extent due to the
requirement of specialized services for the products. This has classified the products
to be distributed in a selective distribution.
2.6 Product Life Cycle

2.7 The Brand

Swatch was introduced in 1983 by a small team of watch engineers from
Switzerland. The name 'Swatch' derived from the term 'second watch' which indirectly
means the new concept and style of watch. Swatch is under the parent company called
Swatch Group, which is one of the largest watch companies in the world, with brands
such as Tissot, Omega, and Calvin Klein placed under the Swatch Group. The first
collection of Swatch was produced in March 1983, the brand instantly gain popularity

among consumers as their watches are 80% more cost effective and use less assembly
parts for their productions. Since then Swatch has become famous especially for the
young people, this is mainly because Swatch's main idea is to create a brand that
emphasizes on style, simplicity and trendy.
Swatch is famous for their trendy and up-to-date designs, the manufacturer
always keeps up with the latest fashion style and tries to be as creative as possible to
stand out from their competitors. Swatch can be classified as a trend setter rather than
just an ordinary watch manufacturer.

2.8 Brand Image and Implication

The brand is currently on the growth state in the product life cycle graph as it
still gaining customer loyalty in Malaysia, this is because Swatch is a fairly new
product in the Malaysian market, with penetration focused on the design and trend.
Swatch is currently not in the top part of the market share, with the market share
dominated by the likes of Rolex, Omega, and Tag Heuer. So, Swatch is still in the
phase of gaining their local strategic target audience in order to fully specify their
mission and vision.

2.9 Strength and Weakness

Strengths

Comes in a variety of colors

Attractive designs

Lightweight materials

Durable and reliable quality

Accurate time consistency

Glow in the dark numbers

Water resistant

Easy to clean materials

Weaknesses

Plastic materials may scratch easily

The back of the watch trap dirt easily

Exposed battery design may cause internal problems

The pins that connect the watch to the strap get loose easily

The rubber strap may be uncomfortable for some people

2.10 Advantages and Disadvantages

Advantages

Customers will be able to choose color to match their clothing appearance

The watch is able to be one of the fashion style in user's appearance

Easy and comfortable to wear due to lightweight materials

The users can wear the watch in any daily activities

Users will not have to worry about time inconsistency of their watch

The watch can be seen in the dark easily because of the glow in the dark material

Users will not have to worry about the watch being exposed to water

Users will not have to worry about the watch getting dirty
Disadvantages

Users will have to be careful not to have the watch scratching with other things

Users will have to clean the trapped dirt regularly

Users will have to avoid dirt getting through the exposed battery

Users have to be careful not to lose the connecting pins between the watch and the
strap

Users may eventually stop wearing the watch because they are not comfortable with
the rubber strap

2.11 Unique Selling Proposition (USP)

Swatch is a brand that follows people's current trends and fashions.

2.12 Promotional History and Advertising Schedule

11-13th November 2011 - Swatch Touch Contest

14th December 2011 - The Art of Gifting with Swatch

30th December 2011 - Swatcher Wish Contest

8-25th June 2012 - Daddy's Favourite Colour Campaign

2.13 Positioning Statement

Swatch is an established watch brand that emphasize on design wise and it is targeted
to young people.

3.1 Company Overview

Swatch is under its parent company, The Swatch Group. Swatch Group was
formed 1983 through the merging of two Swiss watch manufacturers, ASUAG and
SSIH. The Company is currently led by G. Nicolas Hayek, Jr., son of the late cofounder and chairman Nicolas Hayek. There are a lot of brands under the Swatch
Group, for example Omega, Calvin Klein, and Tissot. Since its creation, The Swatch
Group has been one of the biggest watch manufacturers and has spread their legacy
from around the world.
Currently, there are 10 official stores in Malaysia and one Swatch Group Head
Office, located in Wisma Goldhill, Kuala Lumpur.

3.2 Business Description

The Swatch Group aims to put itself across on a leading watch manufacturing
company, Swatch Group has involved in a lot of technologies developments during
the years, and currently still continuing their legacy as an established company.
Examples of their technologies are the Hamilton Electric watch and Bulova Accutron
tuning fork watch.
The launched of the brand "Swatch" marked Swatch Group's revolutionary
move into a new era of watch design. Introduced by engineer Ernst Thomke and his
young team of designers, Swatch has made a bold move toward new styling and
design. The watch was redesigned to make the production easier, for example Swatch
watches use less parts compared to previous watches during the era. Swatch offers
unique and fashionable appearance, which mainly attracted young generations into
experiencing the new work of art.

3.7 Corporate Vision

To become the biggest watch manufacturer in the world

To become an icon in fashion appearance
To strive to lead the global intimates market to achieve profitable growth

3.8 Corporate Mission

To have strong brand image & identity
To become the fashion trend among consumers
To gain local customer loyalty

3.9 Company's Current Promotional Strategy

Swatch Skiers Cup, 1-9 September 2012 in Chile

Germany Red Bull X-Fighter, 11th August 2012
Australia Red Bull X-Fighter, 6th October 2012
FIVB Beach Volleyball Tour, 13-19 August 2012 in Poland
There is currently no promotional strategy in Malaysia as of August 2012.

3.10 Product Sales History

According to Swatch Group 2011 financial review, overall sale of 2011 has
increased in value compared to 2010. Operating profit increased by 12.4% in 2011
compared to previous years. This shows that Swatch is still a growing company and
has yet to reach its peak status. The growth of consumers in selecting Swatch products
will proportionally increase the sales of Swatch in the future.

3.11 Current Marketing Objective

Short term marketing objectives

To gain local customer loyalty
To be recognized as unique and trendy brand

Long term marketing objectives

To become trendsetter in fashion appearance among the people
To become the biggest watch manufacturer in the industry

3.12 Media Expenditure

Swatch has been reliant on a lot of media to promote their products.
Internationally, they have used TV commercial, billboards, print ads, and social
media. Here in Malaysia, the company has been reliant mostly on social media, social

media is the easiest and the more effective way to get to the customer nowadays.
Swatch often organized and promotes their activities on facebook and twitter, for
example the Daddy's Favourite Colour Campaign, the audience are asked to simply
upload their pictures into facebook and Swatch will choose the best as the winner, the
prize were given by post to the winner. This is how well and efficient Swatch's
strategy is in using social media.
Swatch also has its own youtube channel for the viewers, they often upload the
review of their activities as well as promotional video on the channel. Locally, Swatch
has been reliant so much on the use of social media.

4.1 Current Consumer's Characteristics

4.1.1 Demographics

Age

Gender

Education

Occupation

: Students to young working adults

Income Range

Race & Ethnicity

: All races

Geographic Location :

: 10 - 50 years old
: Male and Female
School to higher education
RM500 - RM20 000
Urban and Sub-urban

4.1.2 Psychographics

Perception
Learning
Motivation & Needs
appearance

: Varieties of design to choose from but expensive price

: Friends & Families, Newspaper & Magazines, Internet,
Advertisements.
: The need of watch for time access, attracted by the
of the watch, buying the product as gift, buying watch as
collection and fashion accessories

Attitude & Personality : Consumers who have good taste in design and have
interest
toward fashion and trends.

Lifestyle

: Trendy and fashionable

4.2 Stakeholders Characteristics

4.2.1 Primary
Managing Director

Directing and guiding the employees in order for the company to run smoothly.
Employees

Contribute to the company in exchange for wages.

Consumers
Spending money for the products distributed by the company which contributes to the
company's revenue
Investor
Investing money during the start up of the company with interest of sharing profit.

4.2.2 Secondary
Bank

Provide loan and funding backup money in case of financial crisis.

Courier

Helps distribute the products to the necessary locations in exchange for the wages.
Media
Helps advertise the brand and products and create awareness among the consumers.

5.1 The Industry

5.1.1 Definition of the industry
Clothing & Apparel industry constitutes of units involved in designing,
manufacturing, marketing, and distribution of clothing, footwear, makeup, and
accessories. These are the everyday things that involve both needs and desire of the
consumers. Clothing and footwear are the most significant in the fashion & apparel
industry, these are the factors that involve people's appearance as well as personality.
Accessories category in the other hand includes several things such as jewelry, caps,
glasses, and watches.
5.1.2 Shape of the Industry
The growing needs of the consumers are driving the latest innovations and
creations in the consumer clothing & apparel industry. Looking at today's market,
there are rapid growth of the fashion needs and trend development from consumers,
which resulted manufacturers to compete against each other in order to fulfill
consumer's needs, these high level of competition gives great advantage to the
consumers as they now have more choice of products.
An important part in clothing & apparel industry is the fashion journalism.
Fashion journalism plays a big part in the development of the industry as they are
providing critique, guidelines and commentary in media such as magazines,
television, social networks, and in fashion websites. Through these media outlets,
readers and viewers all over the world can learn about fashion, making it very
accessible. One of the examples is Vogue magazine, who has been the longest-lasting
and most successful of the hundreds of fashion magazines. So, Media does play a very
big part in the clothing & apparel industry.

The problem faced with the industry is the lack in technical experts, and tied
to availability of funds. These factors have deterred the small and medium size local
players from engaging in design and development activities in the industry. Unlike the
major fashion centers such as Hong Kong, Shanghai and Singapore, Malaysia has
limited number of design houses and designers.
5.1.3 Development of the Industry
Clothing & Apparel are basic consumption items for the consumers, in both
developed and developing countries. The industry, especially clothing, is laborintensive and requires relatively modest capital to start up and operate. Therefore,
developing economies such as China, India, Malaysia, Cambodia, and others, that
have pool of low wage rates labors, appeal to the companies seeking off-shore
production with cost advantage than the developed countries.
The growth of Malaysia's clothing & apparel industry accelerated in the early
1970s, when the country was on the course of export-oriented industrialization.
Malaysian exports of clothing & apparel have increased significantly over the years
driven by a few factors increased market access after the phasing out of the export
quota system.
Although the industry is presently increasing but it still considered young
compared to high fashion countries like Paris and United Kingdom. This is because of
the culture and thinking way of Malaysian, clothing & apparel are linked to luxury,
which is unnecessary. Therefore, warehouse sakes and annual mega sales helps to
solve this problem.

5.2 The Marketplace

5.2.1 Current Condition of the Marketplace
The market of Watches is currently in an intensive competition whereby each
brand strives to come up with better products in order to being different and better
than their competitors, especially when there are a lot of competing brands in the
market.
Currently, watches market has been dominated by three giants, which are
Omega, Rolex, and Tag Heuer. With the rapid growth of fashion & apparel industry,
there are currently many brands that are competing to be on top of the market, such as
Tissot, Longines, and Rado.

In order to survive in this fierce competition, the watches brand keep coming
out with latest innovative improvement in term of design and the functionality. Strong
Unit Selling Proposition is important for the company to stand out against other
competitors.
5.2.2 Changes in Marketplace

Positive
More market competition resulted in companies to produce better products for the
consumers.

The industry will grow rapidly as the consumer demand increases

Negative
Too much competition will leave behind some companies, thus may lead to
unbalanced competition in the market.

More competition could lead in profit loss and market share reduction if failed to
meet the par

6.1 Direct Competitors

Casio G-shock
Casio is an established electronic manufacturer and has been in the industry
for a very long time. Casio was introduced in 1946 in Japan by an engineer
specializing in fabrication technology. Since then, Casio has been a successful
company and a giant name in the industry. The G-shock is a watch line up produced
by Casio, the watches are known for the extreme design and the durability. Although
G-shock is made for adventurous and extreme use, it has set a fashion trend among
the consumers, most people especially youngsters buy the watch because of the style
and variety of designs, which is why G-shock is a main competitor for Swatch.
Nixon
Nixon

is an American accessories company founded by Andy Laats & Chad

DiNenna. Introduced in 1997, Nixon began with a small line of custom built watches
with focused distribution in specialty surf, skate, snow, and fashion. Since then, Nixon
has grown rapidly and has marketed into over 80 countries. Nixon has large range of
products, from simple and casual designs to watches for extreme and adventurous
conditions. Similar to Swatch, Nixon has simple and trendy watches with various
designs and colors to choose from.

Timex
Timex is an established and well known watch manufacturer in the market.
Timex is the current day successor of the Waterbury Clock Company, founded in
1854. The initial purpose of Timex was to produce watches that simply work,
especially when they produced watches for the military during the world war. As time
passes, Timex has been one of the largest and most famous watch manufacturer in the
world, their watches emphasize on design as well as quality. Timex now produces
wide range of watches, which has set them to become a trend, especially among the
young adults.

6.2 Indirect Competitors

Seiko
Seiko is a watch manufacturer founded in 1881, originated from Japan. Seiko
is famous for the luxurious and classiness of their products, which is why their
watches can be considered as high end products. Unlike Swatch, Seiko's main target
audiences are working professionals who care about luxury and formality, which
made Seiko as one of Swatch indirect competitors.
Adidas
Adidas is a sports clothing manufacturer, based in German. Since its
foundation in 1948, Adidas has been one of the biggest sports clothing manufacturer
in the world, often being compared with its fierce competitor, Nike. Apart from sports
clothing, Adidas has also produce watches as one of their minor products, their
watches are known for sporty and extreme design, targeted to young adults especially
athletes. Adidas can be considered as Swatch's indirect competitor as their minor
products could somehow compete with Swatch products.
Pandora
Pandora is a Jewelry manufacturer from Denmark, started in 1982. Their
accessories include bracelets, earrings, rings, and watches. Famous for the silver
materials used, they also produced accessories made of gold and gems. As Swatch
products are often seen as fashion accessories, Pandora can be considered as its
indirect competitor as they are producing the same kind of needs, but with different
approach.

7.1

Strong company base

Unique brand image
Good experience in the market
Attractive product design
Good quality of products
Official stores availability
Strong customer loyalty
Variety of product design
Availability on outside retailers
Based in Switzerland, well known for watch
manufacturing

7.3

Strengths

7.2

Opportunities

High interest of people toward fashion-based

products
People consider watches as part of fashion
accessories
People behavior of switching brands

Watches and accessories are often used as gifts

Modern people behavior of keeping

themselves up to date with trends

Weaknesses

Limited products availability outside Selangor

Plastic based products can be damaged easily
(scratch, snap, etc)
Brand lack emphasis on quality wise
Pressure on being one of the biggest
manufacturer
Lack of mainstream activities involvement in
Malaysia
No manufacturing process in Malaysia, in
case of warranty void or product problems.

7.4

Threats

Public perception toward quality of plastic

based products
Youngsters may not be able to afford the
products
People may reasonability of the price
Uncertain tax charge for imported products
High competition in fashion-based products
People refuse to wear watch because of the
availability to access time from other devices
(phones, tablets)

8.1 Proposed Primary Target Audience

Demographics

Age

Gender

Education

Occupation

: Students

Allowance Range

Race & Ethnicity

: All races

Geographic Location :

: 18 - 24 years old
: Male and Female
School and higher education
RM 500 - RM1500
Urban and Sub-urban

Psychographics

Perception

: Stylish and trendy designs of products

Learning
Motivation & Needs

: Friends & Families, Newspaper & Magazines, Internet

: Consumers are attracted by the appearance of the watch,
which is the attractive designs and the ability to choose
colors from different varieties.

Attitude & Personality :

interest

Consumers who have good taste in design and have

toward fashion and trends.

Lifestyle

Trendy and fashionable

8.2 Proposed Secondary Target Audience

Demographics

Age

Gender

Education

Occupation

: Working professionals

Income Range

Race & Ethnicity

: All races

Geographic Location :

: 25 - 30 years old
: Male and Female
School and higher education
RM1500 - RM4000
Urban

Psychographics

Perception

: Stylish and trendy designs of products

Learning

: Friends & Families, Newspaper & Magazines, Internet

Motivation & Needs

gift

The need of watch for casual occasions, buying watch as

to others, buying watch as collection

Attitude & Personality :

Lifestyle

Have good taste in design and fashion, care about self

appearance.
Outgoing, active, and trendy

9.1 Marketplace Research

I have visited few Swatch stores in Kuala Lumpur to observe the products as well as
to study about the target audience. There are 10 official Swatch stores in Malaysia, i
have managed to visit two of them which are in One Utama Damansara and Alamanda
Putrajaya.
Swatch displays their products in different and unique ways compared to other typical
watch stores.
They display each and every color of watches so the customers will not need much
assistance while browsing the products.

9.2 Market Observation

I have made an observation about the market during my visit to the Swatch
stores. I did find some spot near the store and sit for one and a half hour and observe
the people who visit the shop. Here is the result of my observation.
Most of the people who visit the store are young couples, followed by
teenagers, and parents who bring their families. Swatch are good in displaying their
products, they will usually have the new products line at the most front of the shop, so
people who pass by will eventually stop by to have a look. A lot of the people who
visited the store do not intend to buy the product, most of them are attracted by the
colorful watches displayed in the shop. Out of one and a half hour, i can only
identified one person out bought Swatch product.
There are also parents who brought their kids to the Swatch shop to have a
look at the products, but most of them just walked away empty handed. In my

observation, most people who visited are just people who were window shopping and
never intended to buy anything, the price of the products might as well be the reason
they refuse to buy Swatch products.

Photos show type of people who visited the store, there were parents with their kids
and young couples. At times, the shop would be filled with a lot of visitors.

9.3 Online Survey

The online survey was conducted to study about the target audience, the
survey has been answered by 50 participants. The aim of this survey is to determine
the behavior and the awareness of people about the brand. These are the results of the
survey:

Question 1 - What is your gender?

This question was made to identify the gender of the participants. The chart shows
52% of participants are male followed by female at 48%.
Question 2 - What is your age?
This question was made to determine the age of the participants. The result shows the
dominant of the age group 18-21 by 68%, followed by age group 22-25 by 28%, age
group 26-29 by 4% and 0% for '17 and below' and '30 and above'. This result is
helpful as the majority age of participants belong to the age group of the target
audience.
Question 3 - What is your monthly income/allowance range?
This question was made to determine the monthly income or allowance of the
participants. The result shows 56% of the participants gain below RM500, 30% gain
RM500-RM1000, 8% gain RM1000-RM1500, 4% gain RM2000-RM2500, 2% gain
above RM3000, and 0% for others.
Question 4 - Do you normally wear wrist watch?
This question was made to determine whether the participants are familiar with wrist
watch. The result is equal, 50% answered Yes and 50% answered No. This is
important to get the information on whether the target audience finds wrist watch
important to them or otherwise.
Question 5 - What brand of watch do you prefer the most?
This question was made to determine participants' preferred watch brand. As it turned
out, 34% of participants preferred Swatch, followed by Fossil, Casio, Seiko, Guess,
Timex, and other brand. This shows that most people within the target age group
prefer Swatch over any other brands, this can be due to the young and stylish look of
the Swatch products.
Question 6 - How much are you willing to spend on a watch?
This question was made to determine how much people are willing to spend for their
watch. The result shows that 36% people are willing to spend RM200, followed by
below RM100 at 32%, RM300 at 14%, above RM500 at 10%, and RM400 at 8%.

This shows participants at the given age group are not willing to spend too much for
their watch, due to them being student and do not have their own salary.
Question 7 - Which of the following factors do you consider the most when
purchasing your
watch?
This question was made to determine the factor people consider the most when
choosing their watch. Result shows that most of them prefer the design of the watch,
followed by quality, price, brand, trend, and other. This shows that young people are
more aware and care about the look of the products they choose.
Question 8 - Have you heard of the brand Swatch?
This question was made to determine the brand awareness among the participants. As
it shows, 985 of the participants have heard of the brand and only 2% of participants
never heard of Swatch. This shows how Swatch has been an established brand in the
market.
Question 9 - If yes, where did you heard of the brand from?
This question was made to determine where did people heard of the brand. Most
people are being informed through friends & families, followed by newspapers &
magazines, internet, tv & radio, and others.
Question 10 - Have you ever own Swatch product?
This question was made to determine whether the participants ever own Swatch
product. The result shows almost equal of percentage, with 46% have owned Swatch
product, and 54% never owned Swatch product. This shows that most people are
already familiar with Swatch brand.
Question 11 - Have you ever been to any Swatch stores in Malaysia?
This question was made to determine how many participants have been to local
Swatch store. The result shows 88% of participants have visited Swatch store before
and only 12% otherwise.
Question 11 - What do you think of the price of Swatch watches?
This question was made to determine people perception toward the price of Swatch
watches. As is turned out, 48% think that the price is expensive, followed by 36%

who think it is reasonable, and 16% have no idea about the pricing. This is in fact due
to the different amount of income received by each person.
Question 12 - Have you ever come across any activities or campaigns organized by
Swatch?
This question was made to determine whether people are familiar or have encountered
any activities organized by Swatch. The result shows that only 10% of participants
had came across activities by Swatch while the rest are not.
Question 13 - What are you expecting from Swatch in the future?
This question was made to determine people's expectation from Swatch in the near
future. Most people wanted a lower price range for the products, followed by variety
of product designs, quality of products, more local stores, and more contests and
campaigns.