I was inspired to do an analysis of the marketing ads by the major watch companies after paging through the International Watch Summer 2016 edition. Some do a great job but some ads are just terrible. We’ll look at the good, bad, and ugly in this series of posts. I am by no means a marketing expert. I took a smattering of marketing classes while getting my MBA. I’m going to try my best to lay down some marketing basics you’ll need to understand for follow-on posts; it is meant to be a primer. Subsequent posts will analyze the marketing ads of specific companies using some of these basics.
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At its core, what is the company?
This is pretty straight forward (you’d think) for most watch companies. Yet many actually seem to be confused. Are they a watch company? A marketing company? A watch company that markets well? Or a marketing company that happens to make good watches? While this seems to be a nuance, it’s actually an important thing to ask, because many companies are confused. Gone are the days of ETA offering movements to all companies (ETA used to be the company that provided the automatic movement inside a majority of luxury watches. The company stopped selling their movements a few years ago). This move has caused some of the leading companies to realize that they actually have very little watch making “umph” at their core; they have
had to figure this out in the last few years. On the other hand, some companies just don’t seem to have a consistent marketing message! They make decent watches, but their marketing efforts focus on one demographic, then that other demographic, and then a third, fourth, fifth, sixth demographic until you ask “what are they known for?” Not sure. To be successful in the long run (beyond the existing generations) companies have to get right this balance of good product vs good (and focused) marketing.
What does the customer perceive about the company?
If I said “which watch company is best known for pilot watches?” you’d be able to give me an answer pretty quickly (but would others agree?). So why do they also make dive watches? Why do they make casual watches? This isn’t to say a company can’t change what it’s known for, but generally, this is very difficult to do and takes lots of marketing money and spans over a long period of time. Part of the reason companies market to multiple segments is to avoid being too focused in just one segment (if they sell more watches, they make more money –maybe).
Part of it can also be a strategy game between them and their competitors. And lastly, sometimes companies are just confused and think more is always better. More is not always better, especially when more product lines cost you more as a company to produce and also confuse the customer as to what you are known for in the long run. We’ll apply this analysis in a form called “Common Performance” vs “Competitive Advantage” when we take a look at some specific examples of ads. Because this is not an in-depth analysis of a company’s sales figures, these analyses will only be anecdotal (based on my personal opinion).
What is your targeted customer’s willingness to pay?
This is really a simple two-step process — 1) who is your customer and 2) what is their willingness to pay? If you’re making watches targeted at the military, you won’t sell very many if they cost $20,000. You might sell some of the watches to people who like military-grade items, but how you market it would be different, changing your target customer.
The next step of this analysis is: do wealthy people (the ones who COULD afford your product) want the cheaper, but authentic version of a good? You can charge $200,000 for an item that only wealthy people could afford, but if the REAL authentic version only costs $20,000, people will prefer the $20,000 version because it’s authentic. This is very true of pickup trucks. The real, authentic version sells well. There is nothing stopping the luxury companies from making luxury pickups, but there is very little willingness to pay for a luxury version when people want the authentic Ford, Chevy, GMC, Dodge, etc.
Does the customer profile match the product you’re selling?
This is where stereotyping is ok for once and you have to be willing to ask yourself “what does my AVERAGE customer look like?” There are ALWAYS exceptions, but in marketing, you are focused on the “big picture” and not on the random customer who happens to buy your product. Selling delicate gold watches with complications to thrill & adventure seekers, and then marketing in a Camping equipment catalog are “product-market mismatches”.
The overlap of people is probably very small who are adventure seekers also looking for a mechanical watch with complications in gold. When people choose to wear an item, they are doing it to help shape their identity and fit into the groups they are a part of. This has nothing to do with being able to afford it (as income doesn’t always relate to hobbies) rather this has everything to do with the image that watch gives (see my previous post on the experience your watch gives you and the image it presents). When income or wealth do play a factor, ask “what is my customer’s willingness to pay” (reread #3 above)?
How does the customer come to acquire your product?
This is where you think through the chain of events that leads a customer to buy your product. If it’s buying a car, it involves seeing some advertisements on TV, asking friends, doing some internet research, then making a trip down to the dealership. By the time you reach the dealership, a lot of your decision is already made from the previous research you conducted. However, the salesman has a chance to influence the final decision. Once you decide, you have to be able to pay for it, and finally, drive it off the lot. If that whole string of events doesn’t happen, there is a good chance you will not buy that car. Therefore, the marketers have to know how this string works and be able to influence you at the right points along the way. Are the TV ads catchy? Are your friends satisfied with their experience? What information do you find when you try to do internet research? How do they guide you to one of their dealers over a competitor? Once you’re at the dealership, how are the sales and buying experiences?
For watch buying, this varies as different brands along the spectrum appeal to different targeted customer groups — they are not all the same! One company might rely heavily on online sales while another has a target customer who is not very internet-savvy. Some might rely heavily on word-of-mouth reputation while to others it only matters a little. Each company must know the train of events that leads a customer a to buy their watch, whether it is heavily online or heavily reliant on in-store sales.
These are the basics of marketing. Follow our feed to get the updates as we publish an analysis of different marketing campaigns, the great, good, bad, and just ugly over the next few weeks.