Report rolex - Grade: 14 PDF

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Marketing analysis rolex ...

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North South University Dhaka, Bangladesh

Term Paper on Rolex Submitted to: Professor Dr.Mahmodul Hasan School Of Business North South University

Submitted by: S. N 1 2 3 4

Name Amanur Rahman Khan Md. Al- Amin Sheikh Faiaz Nahian Khan

ID 1421257660 133 0221 660

Date of Submission December 20, 2014

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Term Paper on Rolex

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Letter of Transmittal 20 December, 2014 Professor Dr. Mahmodul Hasan School of Business North South University Dhaka, 1229. Subject: Prayer for Submission of the Term Paper on “Rolex”

Dear Sir, It has been a great pleasure for us to work on this report on ‘Rolex’. This report has been prepared by a group of 4 people as a part of the course (Marketing Management) requirement. It is prepared after having extensive overall analysis of thiswrist watch manufacturing company. We have tried our level best to follow your guidelines in every aspects of preparing this project. The report has given us an opportunity to apply theoretical knowledge in real world. It also has given us a glimpse of our individual understanding and skills in various situations. We sincerely hope that you will admire our teamwork.

Sincerely yours, Group: JilapirPach

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Executive Summary The world of horology saw the birth of a visionary in Hans Wilsdorf who foresaw his watch beaming with accurate time on the summit of the earth and also leagues under the sea. In 1905 shunning his work of a clerk in the watch-making industry of Switzerland he, along with his brother-in-law, engaged as the founder of his own watch company, Wilsdorf& Davis, in England. He was a young man of 24, burning with a desire of making wristwatches that would outdo all the prevailing watches in accuracy, precision, endurance and reliability. His determination paid him bountifully. Within five years of the inception his company one of the models of the wristwatch he manufactured obtained the first official chronometer certificate. Yet another new feather was added to his cap in very good time when Kew Observatory awarded his wristwatch with a class A Certificate, the highest of its awards. Rolex has a different collection of Tudor line models with quartz or mechanical movements. These models have the Oyster crown, water resistance to 165 feet. They come in two sizes of steel or yellow metal cases at comparatively economical prices. The company is now beginning to introduce ceramic bezels across the range of professional sports watches. They are available on the Submariner and GMT Master II models. The ceramic bezel is not affected by UV light and is very scratch resistant. Rolex is easily one of the most famous high end watch line in the world. It is also the most recognizable and arguably one of the most durable watches in existence. Pocket watches were more popular than wristwatches but Rolex had a vision that one day wristwatches would far surpass pocket watches in popularity.

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Table of Contents 1.0

Definition of marketing management

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2.0

Mission, Vision & Business Plan of Rolex

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3.0

Corporate Strategy

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4.0

SWOT Analysis

4

5.0

PESTEL Analysis

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6.0

Michael Porter's Five Forces

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7.1

Core Marketing Concept

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7.2

Market Segmentation

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7.3

Marketing strategies

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8.0

Marketing Mix(7p+4c)

9.0

Value Chain model

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10.0

Total Quality management

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11.0

Brand and Branding of Rolex

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12.0

Box analysis of Brand elements

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13.0

Brand Dynamic Pyramid

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14.0

Five M’s model

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15.0

Mass Communication

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15.1

Advertising Budget and Campaign Cost

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15.2

Sales Promotion and Budget

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15.3

Events and experiences

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15.4

Public relation

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15.6

Corporate social Responsibility

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16.0

Marketing Budget and Expenditure

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17.0

Pricing Strategies

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18.0

Break Even Analysis

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19.0

Recommendation

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20.0

Conclusion

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21.0

References

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1.0 Definition of Marketing Management (Theory 2000 – 2011) Marketingmanagement is the art and science of choosing target markets and getting,

keeping,

and

growing

customers

through

creating,

delivering,

and

communicating superior customer value.

1.1 Definition of Marketing Management (Theory 2012 – 2016 ±) Marketing management depends on the size of the business and the industry in which the business operates. Effective marketing management will use a company's resources to increase its customer base, improvecustomeropinions of the company's products and services, and increase the company's perceived value. 1.2 Marketing Management of ROLEX: The wrist watch Brand Rolex choose the business class people who are upper class as their target consumers so that they can afford it , give superior service to these selected consumers grow a market for the consumers and deliver superior customer value. (Theory 2000 – 2011). The size of the Rolex industry is huge and they the customers are also huge. They use their resources very effectively. They continuously improving their product and services according to satisfy their customers and to increase the company’s perceived value. (Theory 2012 – 2016 ±)

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2.0 Mission, Vision & Business Plan of ROLEX: Mission: To manufacture, distribute and service high quality wrist watches. Vision: To continue the long tradition of excellence that the Rolex name represents. Plan: -Educate the younger market on the value of wrist watches. -Create social media strategy that will encourage users to interact with the brand as well as extend the message to a larger audience. -Promote the purchase of wrist watches as a “reward” for key success in a young man’s life. 3.0 Corporate Strategy: Rolex also maintained its brand image by limiting production, even as demand rose. For luxury goods, scarcity in the marketplace can influence value, spur demand, and contribute to collectability and long-term appreciation. And a company that can pitch its product as an investment can frequently charge a premium. Finely-made luxury watches tend to appreciate in value over time. Rolex watches have held their value well, too. Price guides for collectors indicate that almost all older Rolex models are valued above their initial selling price. Most collectible Rolexes sell in a range of between $1,500 and $20,000.

Rolex has also taken pains to ensure that its watches are sold only in appropriate venues. The crystal prism that indicates a store is an “Official Rolex Dealer” is highly prized. Rolex looks for dealers with high-end images, relatively large stores, and attractive locations that can provide outstanding service – such as Tourneau. At one point, Rolex got into a dispute with Tiffany because the venerable retailer was

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imprinting its name on the Rolex watches it was selling. When Tiffany refused to stop, Rolex dropped Tiffany as an official jeweler. In the 1990s, as part of an effort to control sales of their goods in the so-called gray market, Rolex cancelled agreements with about 100 dealers. Rolex has also focused on maintaining the purity of its brand. Many luxury-goods makers have used their original product as a springboard. Cartier and Mont Blanc, for example, have bet that the equity of their brand built on a single product will pull sales for a variety of luxury goods. And some brands have licensed their brand to other manufacturers, thus ceding some control over the products appearing under their name. But Rolex makes only watches, and it has never licensed its name. In the future Rolex will no doubt face stiffer competition as innovative entrepreneurs search for new ways to attack its markets. And the large luxury goods conglomerates enjoy certain advantages over an independent firm like Rolex. They have restructured operations to take advantage of size and significantly reduce cost, enjoy synergies in advertising and marketing, and are more willing to engage in open discussions in trade associations to learn from the competition. The conglomerates may also be more willing to source from Asia, where labor costs are considerably lower than Switzerland. But as it approaches its 100th anniversary, Rolex is sticking to its core strategy of independence, continuity, and brand purity. The company’s attitude has allowed it not just to survive decades of technological and economic upheavals, but to thrive amid them. Even in today’s massive, global luxury-goods market, an independent company that clearly defines its market niche and relentlessly sticks to its strategy can rise to the top.

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4.0 SWOT ANALYSIS OF ROLEX:

Figure: SWOT analysis of Rolex SWOT Analysis of Rolex: Strength Brand awareness involves the ability of consumers to remember to the brand name or recognition brand. In the purchase decision, it can play a vital role because people usually like to buy familiar brands. Brand awareness has been calculated by a variety of brands and is available at Annex lV: Brand Awareness. This result shows that Rolex has

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97% for awareness. The Rolex brand value is quite high and the name is known around the world. Weakness The strategy has been defined so well but it is hard for the company to change its strategy even how innovative the strategy are. The weakness is that could remain some segments that hard to be achieved on the market. For instance, if the fashion goes to GPS watches, Rolex is hard to changes the strategy because Even they try to change their product to GPS watches, people assume that Rolex to be classic watches. In this case, Rolex would be hard to get a market share of” GPS watches” Opportunity Rolex brand name is very valuable. It seems that I can be diversified in related fields. Rolex should take the opportunity to open jewelry line over the world. Rolex has the ability to produce jewelry with its technical. Threats The threat of Rolex is youth does not recognize the name of Rolex. Normally, the most mid age people recognize the name of Rolex because most of the segments were set only for mid age people or middle upper social people.

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5.0 PESTEL analysis of Rolex: PESTEL stands for Political, Economical, Socio cultural, Technological Environmental, Legal analysis of the external environment affecting the business. PESTEL analysis is done by managers to understand the macro environmental factors affecting the business. These analysis are strategic tools for understanding market growth, market share, latest trends etc. * Political factors : These refer to the relevant government policies that affect the business environment of Rolex like Tax policy, labor law , minimum wages law ,tariff rates etc * Economic factors: These refer to the macro economic factors that may affect the business of Rolex which are Inflation, Gross National Income, Gross domestic product, REPO rate, reverse Repo rate. * Socio-cultural factors : These refer to the various social and cultural factors prevalent in the business environment of Rolex like Greater awareness of the people towards environment, changes in taste of the consumers, average age of the consumers etc. * Technological factors: These include the technological factors such as R&D activity, automation and other innovations which has changed the way business is conducted. * Environmental factors: These include the environmental and ecological factors that affect the business for Rolex like climate change, global warming, and rapid depletion of our natural resources. * Legal factors: These refer to the legal environment in which the business is conducted like Trade barriers, consumer law, anti-dumping duty, corporate acts.

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6.0 Michael Porter’s Five Forces for Rolex

Figure: Michael Porter’s Five Forces for Rolex 1. The bargaining power of buyers: When consumers are looking for a Rolex watch, they are confronted to the multitude of brands competing and the various segments: fashion brands watches, mass-market watches, etc. As we have seen previously, the number of watchmakers is very important and therefore, buyers have to make a choice. The different criteria involved in the decision-making process may be: ·

Price, Quality, Style, Size. 2. The bargaining power of suppliers: There is an important difference between the mass market brands and premium ones. If both of them often have the Swiss made inscription, they have two different meanings. For the first ones, the watch components are usually made in a low labor cost country, with a low to medium quality, and then are assembled in Switzerland, allowing the

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watch to be Swiss made. For the second ones, both manufacturing the components and assembling them are made in Swiss by the company, which is often synonym of a good quality. For the first group of manufacturers – that includes Swatch, suppliers don’t have to have a very strong know-how, and can therefore be relatively numerous. This is diminishing their bargaining power over watch brands.

3. The threat of new entrants: Even though the haute – horlogerie segment has very strong barriers to entry (manufacturing costs, brand heritage, distribution selection…), Swatch can be attacked by new entrants. Indeed, its products are simple, accessible, playful, and colorful – the exact opposite of haute-horlogerie watches – and entering this segment does not have very specific requirements (as brand heritage can be). It also can be attractive as there are not a very strong competition on this specific segment. 4. The threat of substitutes: The way we use a watch shifted drastically these years. As the wristwatch was a revolution (opposed to the pocket watch), the mobile phones are changing the rules of the industry. The utilitarian aspect of a watch a decreased a lot, the time being now available on mobile phones, computers, and more. People would rather consider a Rolex watch as a style accessory, an expression of their personality. Therefore, we can see the threat of substitute as relatively high. The primary function of Rolex watches – that is giving the time!

5. Rivalry: In the watch making industry, there is a strong competition between firms, which are mainly portfolios brands. Rolex have many strong competitors like Titan, Tag, RADO, TISSOT and so on. These firms as The Swatch Group, own different brands, covering several segments of the market. Each brand tries to develop its image, concept and storytelling. Also, firms compete through costly marketing campaigns to increase their influential power over their customers and new potential customers.

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7.0 Core Marketing Concept, Market Segmentation & Marketing Strategy

7.1 Core Marketing Concept: All customer segments usually seek strong and reliable communications that are easy to use. However, feature preferences vary in between the segments. Some people want better service in good price whereas some want more service no matter what it costs. Some want the service at reasonable price. People want to achieve a good reputation with his/her belonged products. People want to keep in touch with friends and families with a new vision of life. Travelers have a strong need for a universal timing portal that will take care of all his services and save his/her time. Target Markets:  18+ and above.  Young aged people.  Matured age groups.  Aristocrats.  Professionals.  Business people  Travelers. Positioning: Rolex has positioned itself as an aristocrat brand without any compromise in the quality of the services and sustaining its growth by generating substantial profits. They believe their competitive advantage is good quality with extraordinary look. Rolex has been successful to position itself in almost every part of world with its excellent channel of distribution. And for creating sales and enquiry, it has introduced various exciting and beautiful advertisements and sales promotional activities.

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7.2 MARKET SEGMENTATION Marketing segmentation is to divide the customer base in cluster groups with different needs and behaviors in order to create different and appropriate marketing proposition. Rolex has segments in major bases: geographic, demographic, psychographic and behavioral. Geographic: 

Segmentation is done on the basis of states/regions and market density with wealth.



Country- USA, China, UK, Canada, Qatar, UAE, Saudi Arabia, Kuwait, Hong Kong, Singapore, Bangkok, Japan, Australia, South Africa, west indies, India, Bangladesh, Sri Lanka, Brazil, Argentina.



After tapping developed countries, then they target developing and semi-urban markets as fast emerging as profitable market segment.

Demographic: 

Bases are- Age (18+ and above), income level (all), ethnic background (all), life cycle, occupation (all), education, social class (upper middle to upper class),



generation. Separate schemes for different age & high income groups: Offers special outlets for premium customers & premium plans for business executives and professionals.



Example: offering special collections on special events.

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Psychographic: 

In growth stage, Rolex finds it suitable to segment the market by observing people’s psychology which has changed by technological evolution.



Based on one’s lifestyle, personality, beliefs, values etc.



Main bases on VALs Framework: o Believers: Literal, Loyal. (Professionals, executives, aged, Business). o Experiencers: Impulsive, variety seeking. (Young people).

Behavioral: 

Users can be found. (High or Low).



Study showed that aged groups are highly loyal; young users have split loyalty.



Positive attitude groups is found in the market.

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7.3 MarketingStrategy

The ‘Marketing’ Concept: Rolex purely follows the ‘product concept’. The product concept holds that the key to achieving organizational goals consists of the company being more effective than competitors in creating, delivering, and communicating superior customer value to its chosen target markets by well-designed and high quality product. Some significant strategies are: 

Offering special product on special events.



Discounts offered to shareholders and their referrals.



Strengthening the Customer service



Advertising- High professional advertisements.



Huge public relations and campaigns.



Connecting with every segment of the society.



Bonding with service.



Product/ Service development after research and studies.

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8.0 Marketing Mix 7P + 4C

Product/Service:<...