rolex vs cartier

7/17/2019 Rolex vs Cartier

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LUXURY MANAGEMENT – ROLEX VS. CARTIER WATCHES

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INTRODUCTION

HISTORICAL BACKGROUND

In the 1970’s, after around 1000 companies and 55’000 place of work disappeared, many

analysts left the Swiss watchmaking industry for dead as it missed out the electrical

revolution and was facing tough competition from cheaper Japanese watches. Today, the

watch industry is Switzerland’s third largest exporter after the machine and the chemical

industry. Switzerland’s production of finished watches amounts to around 26 million units

for a value of 10 CHF billions. The average export price for Swiss watches is 378 CHF versus 7

CHF for Hong Kong and 61 CHF for French watches. Where does this huge price difference

come from? Switzerland possesses close to 100% of the luxury market value (which

represents 48% of the watch market value). Export of watches including precious metal

represents only 5% in units, but 46% in value.

But watches are not only important in terms of revenues for Switzerland; it is also an

important part of the Helvetic tradition. When kids get their first watch, it is usually a Flik

Flak (Swatch Group). Then, most of the teenagers (and adults as well) go through what one

could call a “Swatch mania”. Colorful, cheap and fancy: everyone has at least one Swatch.

Then, as adult, most of the people possess one more luxury watches. Nevertheless,

behaviours changed a lot in the past years. Watches were typical present to offer at certain

stage of the life (20th birthday, graduation, wedding, etc.. One would wear the same watch

his entire life.

Nowadays, most of the people own more than one watch and like to consider i t as a fashion

accessory they can change as they like and that matches their cloths or envy of the moment.




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OBJECTIVE OF THE STUDY

Following are the objectives of the study:

To undertake a comparative study of the luxury brands for watch – Rolex and Cartier

To understand the contrast in the business processes followed by the brands

To study the difference in the target market for each brand and understand what

market each brand caters to their customers

To find the positioning each brand holds in the market and contrast the difference in

the positioning

To highlight the differentiating factor in terms of the product the brands offer

LIMITATIONS

While completing the research for the comparative we came across a few limitations –

The data available was online and there was no primary data to be analysed and

hence the data can be manipulated




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REVIEW OF RELATED LITERATURE (AND ANALYSIS OF PREVIOUS

RESEARCH)

DEFINITION AND PRICE SEGMENTATION

This study concerns the Swiss luxury watchmaking industry. In order to clarify what luxury

means and includes in term of price, a classification taken from the Pictet report “The Watch

Industry, What makes it tick ?”, November 2003, will be used . The following table

distinguishes four different segments which are exclusive luxury, accessible luxury, mid-

price and low price. Any time this report refers to “luxury watch industry”, it includes both

the exclusive and the accessible luxury segment. What is more, as the Swiss luxury

watchmaking industry represents close to 100% of the luxury watch market value, in this

study, the expression “Swiss luxury watchmaking” or “luxury watchmaking” can be

considered as equivalent.

Table 1 Price segmentation in the watch market (factory gate) (Source: Pictet)

Conceptually, luxury, from Latin luxus, “excess”, is defined1 as:

• “the comforts and beauties of life beyond what is really necessary

• The use of the best and most costly food, clothes, houses, furniture and amusements

• A thing that one enjoys, usually something choice and costly

• A thing that is pleasant but not necessary

• Any form or means of enjoyment or self-gratification”




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PERCEPTUAL MAPPING OF LUXURY BRANDS

Figure shows a chart displaying the most important brands in the watch industry. They are

grouped into five different profiles resulting from their consumer image. The categories are

the following:

• Connoisseurs/specialists

• Sport

• Fashion

• Lifestyle

• Jewellery

What is more, the chart is divided into four regions using three criteria: the price (low price

– accessible luxury – exclusive luxury), the type of movement (mechanical and complication

versus quartz) and the technology grade (technical content versus design content).

The brands that will be studied in more details have the following positioning

Rolex is seen as a jewellery and Cartier is positioned in the jewellery segment.




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BUSINESS PROCESS

A series of logically related activities or tasks (such as planning, production, or sales)

performed together to produce a defined set of results.

A business process is a collection of linked tasks which find their end in the delivery of a

service or product to a client. A business process has also been defined as a set of activities

and tasks that, once completed, will accomplish an organizational goal. The process must

involve clearly defined inputs and a single output. These inputs are made up of all of the

factors which contribute (either directly or indirectly) to the added value of a service or

product. These factors can be categorized into management processes, operational

processes and supporting processes.

A process requires a series of actions to achieve a certain objective. BPM processes are

continuous but also allow for adhoc action. Processes can be simple or complex based on

number of steps, number of systems involved etc. They can be short or long running. Longer

processes tend to have multiple dependencies and a greater documentation requirement.

Profile

Rolex has the opportunity to reinvest the benefits in the company to improve distribution

and after-sale services and to increase research and development. What is more, they are

not pressured to follow the general trends of the industry in order to content shareholders.

As an example, Rolex is the only big player that is not following a multi brand strategy.

It is not all, Rolex also distinct itself from the others because, as we already mentioned, it is

one of the last group that is not pursuing a multi brand portfolio. In fact, it has a long

tradition of “one brand and one product” that has always, nearly been respected. The only

exception to this rule is the “Tudor” brand, Rolex’s second brand, positioned as a “cheaper”Rolex.

Cartier is a company of the Richemont Compagnie Financière Group the second worldwide

luxury group and the first worldwide luxury watchmaking group. The group depends heavily

on the brand that realizes approximately half of Richemont Group’s turnover and 60% of the

operational benefit. Their estimated turnover is 900 millions euros with an estimated

average volume of 350000 watches a year. Cartier’s activities consist of watches (55%),

jewelry (35%) and others (leather products, perfumes, pens, eyewear and lighters) (10%).




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Brand Identity

Rolex

Cartier




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Products

Rolex as an international brand is much easier to find than Cartier at times. When it comes

to production of watches, Rolex beats any other company by a landslide. Rolex is the worlds

top watch producer, meaning that there are more Rolex watches available on the market

than any other watch brand. Rolex and Cartier tend to be neck and neck in pricing, with

Cartier watches being slightly more expensive than Rolex watches.

Rolex watches tend to be sturdy and have a more practical feel whereas Cartier is known for

more whimsical feel and design. Both brands have a number of different lines, allowing

watch buyers to purchase a design that works for them. As Cartier is also a designer of fine,

high end jewelry, you are likely to see more inspiration from jewelry designs in their

watches.

Rolex produces only round watches since more than 40 years. The brand encompasses only

two collections: the Oyster that represents around 140 models and 80% of the sales and the

Cellini. The design has always been very conservative and the only radical innovation was

brought in 2000 with the launch of a colorful Oyster Daytona.

The collection of Cartier is very broad. In includes the following models:

• Santos is designed in 1904 by Louis Cartier for its Brazilian aviator friend, Alberto Santos-

Dumont.

• Tonneau designed in 1906

• Tortue, an extension of the Tonneau, launched in 1912.

• Baignoire launched in 1913

• Tank’s first design is done in 1917; Louis Cartier was fascinated by the armored cars and

decided to design a watch inspired from them. The tank is available in five collections: Louis

Cartier, Française, Américaine and Divan. It is the most successful collection of Cartier

representing one third of the turnover.

• Panthere launched in 1983

• Pasha launched in 1985. It is the typical men watch that women love to wear.

• Ligne 21 created in 1986




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• Roadster launched in 2002

• Declaration launched in 2003 and is elected “watch of the year” the same year by the

Swiss magazine “Montres Passion / Uhrenwelt”. It is the first time that a women watch with

a quartz movement won this distinction.

On top of this collection, Cartier has an entry level line of jewellery, watches, perfumes, etc

known as the “Must de Cartier”. This line is an important part of Cartier’s success and gives

an opportunity to, once in a lifetime, buy a Cartier good.

Production Process

The brand works by dividing specific functions between four sites across Switzerland that

make up design, manufacture, assembly and the testing of each timepiece that bears the

signature crown.

From development to post-sale servicing, several reliability tests, metal forming, alloy

quality control, stamping, dial construction, gem-setting, assembly, control and other

nuanced processes are continuously at work Time-keeping is an exact art and science today

and every watch brand with heft has a historic legacy to match. In a space where there is no

room for goods, only greats, Rolex occupies central space. In Indian society, there's a certain

sentiment attached to the brand. A Rolex on your wrist signifies the attainment of success, a

sign that you have finally arrived, and rightly so. At awatch fair an old gentleman was trying

to place Rolex in the watch heirarchy and made a telling statement on the brand's

perception in India. He said, "Rolex is like Mercedes. It's been around forever and is the

preferred choice of those who have both money and taste and want something reliable."

While maintaining its age-old identity, Rolex wants to stay relevant and be seen as a brand

that is keeping up with the times.

The infrastructure installed within the gleaming glass facade of the units in Switzerland is

uber sophisticated. Equipped with an entirely automated transfer system-a result of in-

house engineering-it functions faultlessly as a maze for transporting, segregating and

storing, sans any glitch or hiccup. And while the makers are busy churning out a beautiful

timepiece, a team of scientists in the Central Laboratory study every material used in the

assembly. Using powerful equipment such as a scanning electron microscope, they keep a

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constant tab on the quality of alloys created. Even the slightest imperfection is resolved by

the collective genius of their team.

However, it is the integration the brand employs between the use of automated advance-

technology and hand-work that elevates it. One of the last stages in the production of a

Rolex watch consists of approximately 10 operations performed entirely by hand in a

controlled environment. Once assembled, the watch undergoes a series of checks carried

out using highly sophisticated, fully robotised equipment. It is perhaps a sign of things to

come as an automated robotic arm with a Rolex fastened around its wrist manoeuvred

awkwardly in a mechanical manner. I was told it would continue to do do to test the piece's

durability for several hours till it satisfied the benchmark set by its makers.

A watch is so much more than the sum of its parts. A Rolex on your wrist is a piece of the

brand's personality, which is why it's important to understand what makes it what it is. For

over a century, Rolex has symbolised prestige and performance. While the process has

evolved from being the domain of a single craftsman to the collaboration of skilled

specialists, the sheer volume of timepieces being created, hasn't compromised on quality.

Internal Environment

At Rolex, men and women who service and produce these machines are considered artists,

who blend both science and design to create these master pieces of art. They understand

the interplay between all the materials used, and combine all the thoughts needed to create

an object that is a reflection of care and intent. At the end, they believe that it is a piece of

living art that is greater than the sum of its parts. Furthermore, and this is the heart of

Rolex, people who work on watches are very passionate, have incredible ideas and are

always excited to produce such products. Hence, when you are caring, passionate and

enjoying what you are doing, you will do it with the utmost attention and care. And that is

the secret at Rolex when producing their luxurious watches. It is like producing a thing with

pleasant feelings and creating another soul.

From another angle, the workshops where the watchmakers work are very much organized.

Managers say that the person is expected to work in a library like atmosphere (i.e. clean and

quite) that will enable the watchmaker to focus and to be comfortable. I believe,

watchmaking is not for everybody, it requires talent, time management, commitment and

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patience. What adds to all of this as well is dealing with very delicate and expensive

products. Not to mention, adding the jewelry further pressurize the watchmaker.

At Rolex they will only bring people who believe that working as a watchmaker is the right

career at the right time.

Major Market Concentrations

The Chinese luxury market is not dead: Interest in all luxury watch categories continues to

escalate, led by Omega, Cartier and Rolex.

Though sales at home may have declined, Chinese thirst for luxury watches is not showing

any signs of slowdown, according to exclusive data shared for the first time by Baidu,

China’s leading search engine, for Digital Luxury Group. According to Baidu Vice President,Liang Zeng, “Watches are part of the fastest growing luxury segments in China right now.”

Bernard Formas, who has headed the luxury group since 2002, suggested that the firm

would maintain its focus on emerging markets to offset the potential effects of economic

volatility elsewhere.

Cartier has already reacted to the 2008-09 global economic downturn by launching a lower-

priced range of jewellery, reflecting customers’ tighter budgets.

“We have always prepared the brand for the worst, even when things have been going

well,” Formas said. “I don’t talk [growth] figures, because there are so many things that can

happen… I don’t know what level we will be at during 2012.”

According to Q4 2011 results from Richemont, the owner of Cartier, the group’s sales rose

24% year-on-year across the three-month period. This included a 36% rise in Asia-Pacific,

which offset an increase of 15% for Europe. Japan, whose economy is still recovering fromthe effects of the tsunami and nuclear crisis of march 2011, was up by just 10%.

Formas suggested that China in particular would be an area of future focus for Cartier.

Figures cited by the Wall Street Journal suggested that overall Swiss watch exports to the

world’s most populous nation were up 49% in 2011.

“The potential in China is so important,” Fournas said. “China is our third- or fourth-biggest

market, but the Chinese nationality is number one, because of the customers who buy

products when they travel.”




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He added: “We have a fantastic geographical spread. We are like an aircraft with five

engines … Europe, Middle East, the Americas, Japan and the rest of Asia.”

Fournas suggested that fluctuations in commodity prices and currencies could impact on the

business in 2012.

The poor performance of the euro – due mainly to the eurozone debt crisis of recent

months – has already led to price increases. Cartier is particularly vulnerable to currency

moves as it makes its watches in Switzerland, where the franc has been strong recently, and

much of its jewellery in France.

“Overall, we have managed to bring in some price increases on the watches: we had

increases of 10% last year in several markets,” Fournas added. “It all depends on what theeuro is doing.”

Differentiation Strategy

The idea is to offer a product that is perceived as unique by the customer. The uniqueness

can rely in the design –Techno Marine, the brand who dares to mix plastic and diamond-,

the brand image -Rolex and achievement, Cartier and art.

A differentiation strategy is not an easy task: it relies heavily on intangible values andtherefore it is slow to create the brand image and slow to penetrate new markets. Besides,

the brands have a very sensitive relationship with the market: customers are usually

knowledgeable about the brand and identify themselves with it, therefore, companies have

to be careful to nurture coherently the image of the brand and not disappoint them with

mixed messages. In fact this is clearly showing a lack of innovation in marketing campaigns.

No brand really dares to make something really different, imaginative or original and,

therefore, strategies on the market are already much consolidated and look very alike. The

implementation of the strategy is complex and difficult; the brand has not only to define

intangible values but also to explain them and prove that they are different and apart from

their competitors. But once the customer knows and understands the spirit of the product,

the company can expect high margins on its product, a high degree of loyalty and lower

sensitivity to price. Uniqueness can also protect from substitute because the more the

product seems unique, the more it seems difficult to find close substitute




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Advertising and Promotion

Rolex is using famous personalities for its campaign, but the concept is different from the

one we just described. In fact, the “Rolex” brand name is already so famous tha t their

campaign’s main goal is not to gain notoriety but to fully express and develop furthermore

the identity of the brand. Perfectly in line with the idea of a long term strategy, Rolex uses a

selective marketing strategy which goal is to target very directly the desired customer. They

do not use artists that are “hot in the moment” to have periodically picks of sales linked to

the use of the superstar. On the contrary, the chosen celebrities have a sustainable

character. In fact, Rolex ambassadors are f amous only in “niche” activities like golf,

equestrian and sailing just to name a few and are unlikely to provoke demonstration

because most of the time they are unknown by the general public. Moreover, Rolex is

diversifying its basic risk of having “a bad ambassador” away thanks to numerous

outstanding ambassadors and exceptional events under contract.

The idea is not to transfer the fame from a super star (pop singer, actor, top model, etc) to

the brand quickly but to choose people who have achieved something and that are or will

be a part of history, so that Rolex can join them writing it. The main advantage when using

the celebrity of a super star ambassador to make its own product famous is that the results

are very quick; the product becomes well-known very fast

Backward Vertical Integration

Anticipating the battle for the watch components, it is a couple of years now that Rolex is

following a backward vertical integration strategy in order to be able to ensure a total

independence from competitor groups. This pattern shows through the numerous takeovers

of suppliers that took place lately. Among them: the bracelet firm Gay Frères SA in 1999, the

dial firm Beyeler in 2000 and the crone firm Boninchi SA in 2001.

What is more, Rolex was using until 1999 a movement designed by Zenith, El Primero22, for

all the Oyster Daytona models. After Zenith’s takeover by LVMH, Rolex started to design its

own movements in order to avoid having to rely on its main competitors. Finally, Rolex has

always been two separated entities: Rolex SA (Geneva) the company that is owned by the

Wilsdorf foundation and Rolex Bienne, which produced movements exclusively for Rolex SA

Geneva. In 2004, in line with its strategy of vertical integration, Rolex Geneva has decided to




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buy Rolex Bienne to ensure its provisioning of movements. The two companies were linked,

since around 1920 by a tacit deal: Rolex Geneva was buying mainly its movements at Rolex

Bienne and they will sell their movement exclusively at Rolex Geneva.

Distribution Channels

Rolex does not supply its product to be sold in any store in particular. Only the classiest of

shops may bear the Rolex name, these specialty stores that carry our product usually

include jewelry, clothing, and clockwork stores. We do not supply our product to

department stores, supermarkets or mass merchandisers as it would hurt our brand equity.

There are stores located all across the world that carry our product including such countries

as: Switzerland, Argentina, China, Italy, Mexico, Taiwan, The United Kingdom, etc. If you

wished to purchase our product you cannot simply walk into any store that sells accessories,

you must go out of your way to locate a specific store. We do not provide our product to be

distributed online through the internet, we believe in a face-to-face approach to selling and

as well it ensures that the customer is aware they are purchasing a true Rolex. There are

many people who replicate our product and the online business would be too risky to

undergo operations in. Rolex chooses not to sell directly to the customer to ensure the

buying experience and satisfaction are maximized.

We produce and distribute watches all around the world. We have the best suppliers that

make available only the finest raw materials that are to be developed into watches. At the

inventory management level we estimate and determine how many watches to make, as

the watches are easily stored there are not many inventory costs involved in the overhead

cost. We produce and sell watches year round so the storage needed is minimal. Our

channel of distribution would be through merchant intermediaries, more specifically, select

retailers that will distribute our product directly to the customer. There has been much

integration of physical distribution functions amongst the retailers such as communication

and transaction functions. Our retailers provide for us product information not available on

our website as well as price quotes; these intermediaries also perform a selling function for

our product. As well we only produce a small amount of watches annually as the demand

for our product is low as well as it keeps our exclusivity from depleting, there is no ‘breaking

bulk’ or ‘accumulating bulk’. We do not take orders from customers so there is no order




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processing; however there are regions with a higher demand for our product so we aim to

fill that demand. We do receive orders from stores however and certain requests can be

made from the customer through the retailer. Our watches are of course put into

protective packaging before being transported to the retailers to ensure quality. Once

packaged and ready to go we at Rolex employ multiple outbound transportation strategies

such as planes, trucks, boats and even locomotive. Our company does not utilize the use of

many facilitating functions; we do not provide an extensive extra service through customer

care. We believe in the durability and sturdiness of our product and feel the maintenance

job to be the business of someone else. There is a slight risk taking function that our

retailers undergo as the demand for our product is minimal, however our product and brand

name has stood the test of time and proved dominant in the market, minimizing risk.

We do not allow our product to be sold electronically. Although there may be demand for

the watches to be sold because of the boom of the online stores we feel it is in the best

interest of our brand name and equity to remain an offline distributor. This easily prevents

the sale of cheap replicas ensuring the customers purchase of our product was a legitimate

one.

The distribution paradox addresses the fundamental contradiction between luxury and

marketing:

Luxury brands also strive to grow their business, but increasing sales volumes reduces rarity,

therewith also the luxury image and as a consequence also the sales numbers, which means

that the successes of luxury brands jeopardize their future successes.

This phenomenon is exemplified by Cartier`s experience with their accessories "Les Must de

Cartier." This product line developed to become a bestseller, which started to damage the

brand image and therewith forced Cartier to restrain these offerings (Catry 2003, p. 10).

Thus, the challenge for luxury brands is to increase their success and still preserve the

impression of exclusivity

The distribution paradox also entails additional luxury-specific marketing strategies. Because

of the limitations in pushing sales numbers, it is recommended that the potential of profit

maximization is exhausted, for instance by forward and backward integration. Forward

integration includes developing own retail outlets and backward integration covers




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increasing control over the manufacturing process, for example by exchanging licenses with

in-house manufacturing. Another advantage of integration is the increased control over

product quality and brand image.

Cartier has an impressive distribution strategy. With its presence across the globe, it is

planning to enter Middle East and U.S. markets to compete with its counterparts. Cartier is

very strong in China market, but then the brand does not want to be over dependent on a

single segment.

ANALYSIS OF DATA

WORLD WATCH REPORT – 2014

Global demand was fueled once again by BRIC markets with the highest year-to-year

increases in: China (+59.4%), Russia (+20.4%) and India (+12.0%).

Historically established and mature markets such as Germany (-9.2%), the United States (-

7.9%), and Japan (-5.5%), experience single digit demand decline, whilst Italy (+8.8%) and

the United Kingdom (+3.1%) see growth in interest versus 2012.

The Brazilian market fails to deliver amid high expectations (-2.9%), ahead of an important

year for luxury watch brands in the market (World Cup and Olympic Games in 2016).

Despite growing international attention and key events driving important brand related

investments, the market predicted to become the next big thing, fails to deliver on its

promises.




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PRODUCT DIFFERENTIATION

Rolex

Rolex uses product differentiation strategy based on product durability, which is a measure

of the expected age of the product operating under normal conditions and / or weight.According to most users, durability is very important

In case of Rolex they pursue a differentiation strategy, Rolex watches are handmade

precious metals like gold or platinum and stainless steel and are subject to strenuous tests

of quality and reliability. The firm’s reputation enables it to charge thousands of dollars for

its watches

Cartier

For Cartier, product differentiation is based on a varied array of tangible characteristics and

intangible values associated with it, and for which customers are ready to pay more.

First is the quality of materials used in manufacturing their products. Their watch

mechanisms are made from the best steel materials, while it is common to see the finest

products made with cases in precious metals like white gold, yellow gold, and rose gold

among other precious metals. Some are adorned in the best-graded diamonds or other gem

stones, and this a key reason why Cartier watches are among the favourite watches of the

rich and famous.

Secondly, the company has uniquely designed watches available for men and women.

Anybody looking for the finest timepiece always has confidence that this is exactly what you

will get from Cartier. Moreover, they give absolute attention to detail while producing their

watches and jewellery to ensure that the end product is of the best possible quality that it is

possible to get.

Cartier is also a visionary company, it is ahead of others in making stylistic watches. It also

created the first wristwatch, added a new dimension in watch designing as the rectangular

dial started from them. This makes their watches different not only because of the quality

and style, but also because they produce with an innovative technology




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POSITIONING

Rolex

According to Forbes, Rolex is one of the top 100 most recognized and most powerful brands

in the world. The name “Rolex” is immediately recognized by people all over the world, eventhose un-affiliated with the luxury watch industry. Rolex can credit this brand recognition to

its work on its brand image and positioning.

People both inside and outside of the luxury watch world recognize the name “Rolex.”

People associate the brand name with success and luxury and imagine Rolex wearers to live

a lavish lifestyle. A Rolex watch can be used as a status symbol, showing people that the

wearer has achieved a level of success and stability, which have allowed them the means to

purchase a Rolex watch.

This strong and positive brand image can largely be attributed to the people that are seen

wearing Rolex watches. Today, many celebrities and athletes are seen wearing Rolex

watches. This idea started in 1927 when Hans Wilsdorf had Mercedes Gleitze wear a Rolex

Oyster around her neck as she attempted to become the first woman to swim across the

English Channel. The Rolex Oyster was the world’s first water proof wrist watch and this was

the perfect way to prove its functionality because people all over the world were following

the story of Mercedes Gleitze.

This brand positioning, started by Wilsdorf in 1927, ensures that Rolex watches are

constantly out in the face of the public, as well as being associated with the wealthy and

successful. When those unfamiliar with the luxury watch industry see their favorite athlete

or celebrity wearing a Rolex watch, it creates interest and curiosity in the piece. Rolex

watches are then perceived to be the watch of choice for the rich, successful, and famous,

giving the brand an image of superiority.

Rolex positions itself as a tribute to excellence, an object of passion and a symbol for all

times. The Rolex positions itself on both functional and emotional grounds. Initially, it was

self-winding, water-resistant and durable stainless steel watch but with time it has

incorporated the sporty style and sophistication. Now Rolex is a status symbol and the token

of success on the wrist of an individual.




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Cartier

Cartier is Luxury Daily’s 2012 Luxury Marketer of the Year for the use of long -term,

multichannel campaigns that keep up its mystique in the eyes of truly affluent consumers

and lure those who aspire to be part of the brand’s world.

The French jeweler won over first runner’s-up Four Seasons and second runner’s-up

Burberry. These top luxury marketers carefully executed each new campaign in 2012 to

align with the brand heritage, values and status while incorporating new technologies and

communication channels.

“One word sums up Cartier’s marketing across all channels: class,” said Mickey Alam Khan,

editor in chief of Luxury Daily, New York. “Every execution from Cartier is resoundingly rich

and true to the brand’s values. The implementation is flawless and the effect simply awe -

inspiring.

However, Cartier did not forget the aspirational consumer. It was not afraid to flaunt its

history, traditions and craft through accessible channels to attract newer customers to the

fold.

TARGET MARKET

Rolex

With a strong heritage of quality and dominance in the watch industry, company is facing a

downward trend in the sales and revenue. Recession is not only reason for the decline in

sales but the important factor is not aligning with the changes in the consumer behaviour.

Rolex has been considered a long time as a male watch; they are trying to get the woman to

like it to. Another important theme of the strategy is the backward vertical integration in

order to secure future supply and definitely loose dependence on competitor groups. The

image of an “arrogant” Rolex showing off sounds very contradictory with the low profile

and humility of Rolex’s top managers, but the brand is now strongly associated with

symbolic consumption.

The opportunity of increasing their presence on the female segment is identified, but that

the company still seems having troubles implementing it and attracting woman. In fact,

shows, the company already tried in 2000 to target more specifically women with a very




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innovative campaign in breach with the preceding ones. But this campaign did not last very

long.

Cartier

Cartier is a well-known luxury brand and being considered a "luxury brand" by itself,

connotes a certain feel of exclusivity, excellent quality, high-level precision and outstanding

craftsmanship which makes its target consumers only a small and niche-type of population.

Cartier's main target consumers belong to the luxury sector of the market who are

individuals classified at the top-end spectrum of wealth and social economic status. These

so-called "elites" are known to spend heavily on authentic and famous luxury brands to

further enhance their image and position in the society. The Cartier brand's target

consumers are also known for their "price insensitivity". According to a study what is

interesting about the Cartier brand is its strong brand image which has managed to create

the highest form of command and craftsmanship which in the minds of its target consumers,

set a strong calling and demand to remain loyal to the brand. Although considerably small in

terms of numbers, the Cartier brand's target consumers are heavy spenders who, from time

to time, update their fashion items for a more innovative and up-to-date look. This target

market is also known as the society's trendsetters.

SWOT ANALYSIS

Rolex

STRENGTH

Brand image strongly established as a premium luxury brand.

Introduced the first waterproof watch, first automatic dating watch.

It is one of the largest and most reputed luxury watch manufacturer in the world.

Excellent advertising and branding by associating.

Sponsorship of global sports events as well as other international events.

WEAKNESS

Counterfeit and fake imitation affect the brand image.

Competition from several premium watches and maintain brand essence means lot of

investments

OPPORTUNITIES

Rolex could introduce separate product lines with different brand identities under the Rolex

brand.

Emerging economies pose a great opportunity to penetrate the global market further




22

THREATS

Rolex’s limited dealership and long waiting periods can lead to its competitor brands.

Fake imitations can hurt the brand image

Cartier

STRENGTH

The brand has an image as a luxury brand and popular global premium product.

Known predominantly as a jeweller, Cartier has an excellent reputation for beautiful and

unique watches.

Good advertising and brand presence through print ads & TVC’s.

Also has offerings like watches, perfumes and prestige accessories.

WEANESS

Cartier is known for also exquisite jewellery is not just a watchmaker, its competing brands

on the other hand are predominantly watch brands

OPPORTUNITIES

Lack of suitable destinations for retail in luxury market is an opportunity for the brand to

establish itself

High growth in the luxury watches segment seen in emerging economies

THREATS

Consumers display the double aspect of a strong luxury culture and a strong sensitivity to

prices

High switching costs for the wealthy




23

MAJOR FINDINGS

ROLEX VS CARTIER

Rolex as an international brand is much easier to find than Cartier at times. When it comes

to production of watches, Rolex beats any other company by a landslide. Rolex is the worlds

top watch producer, meaning that there are more Rolex watches available on the market

than any other watch brand. Rolex and Cartier tend to be neck and neck in pricing, with

Cartier watches being slightly more expensive than Rolex watches.

Rolex watches tend to be sturdy and have a more practical feel whereas Cartier is known for

more whimsical feel and design. Both brands have a number of different lines, allowing

watch buyers to purchase a design that works for them. As Cartier is also a designer of fine,

high end jewelry, you are likely to see more inspiration from jewelry designs in their

watches.

Selecting a good watch with Cartier or Rolex is easy to do because of both the brands’ focus

on high end, quality watchmaking. Customer service and guarantees make the investment

even more satisfying.




24

COMPARISON MATRIX

PARAMETERBRAND

ROLEX CARTIER

MARKET

PRESENCE

Rolex being a purely watch brand is

easier to find in the market

Since Cartier has many product lines to

complement its brand name the

watches are a part of the larger product

line

PRODUCT LINE

Watch

- Air King

- Day Date

- GMT Master II

- Sea Dweller

- Submariner

Jewellery

Watches

Accessories

- Scarves

- Sunglasses

- Writing Instruments

PRODUCTSturdy and practical masculine

designs

Whimsical and feminine design,

generally encrusted like jewelry

PRICENeck to neck with Cartier, slightly

low priced

Neck to neck with Rolex, slightly high

priced

PROMOTION

Tthe “Rolex” brand name is already

so famous that their campaign’s

main goal is not to gain notoriety

but to fully express and develop

furthermore the identity of the

brand

The advertisement campaign is a pure

product campaign presenting the watch

on a red background. Cartier has a

representation contract with Monica

Belluci. It means that, anytime she is

wearing jewellery, this is Cartier

jewellery

TARGET MARKET

Rolex has been considered a longtime as a male watch; they are

trying to get the woman to like it to,

but the brand is now strongly

associated with symbolic

consumption.

Cartier's main target consumers belong

to the luxury sector of the market who

are individuals classified at the top-end

spectrum of wealth and social economic

status. These so-called "elites" are

known to spend heavily on authentic

and famous luxury brands to further

enhance their image and position in the

society

PRODUCT

DIFFERENTIATION

Rolex uses product

differentiation strategy based on

product durability, which is a

measure of the expected age ofthe product operating under

normal conditions

For Cartier, product differentiation is

based on a varied array of tangible

characteristics and intangible values

associated with it, and for which

customers are ready to pay more.

BRAND

POSITIONING

People associate the brand

name with success and luxury

and imagine Rolex wearers to

live a lavish lifestyle

One word sums up Cartier’s

positioning across all channels: class




25

ADVERTISING

STRATEGY

Rolex executives decided that it was

time for the company to launch its

first branded Facebook page, a

herculean leap for a brand that has,

for decades, closely monitored its

reputation and only made tweaks

— in both its watches andmarketing strategies — after

subjecting them to significant

scrutiny.

French jeweler Cartier is adding digital calls

to action to its jewelry catalog by releasing

the latest one via email. The e-catalog offers

consumers touch points so that they can

find each item on Cartier’s Web site, view

additional details and pricing and make a

purchase.

SIGNATURE

PRODUCTSRolex Datejust Watch Ronde Solo de Cartier




26

REFERENCES AND ANNXURES

Websites:

Mode, histoire de la" Encyclopédie Microsoft® Encarta® en ligne 2004,

http://fr.encarta.msn.com

Fédération horlogère suisse : www.fhs.ch

www.worldtempus.com

www.rolex.com

www.cartier.com

http://www.redwatches.com/

www.w-o-s.com

http://www.rolexawards.com/home-flash.html

Less Arts décoratifs, La galerie des bijoux

http://www.ucad.fr/galerie_bijoux/01presentation/presentation-gb.html

http://www.businessweek.com/pdfs/2001/0132-toprank.pdf business week, the 100

top brands august 6 2001 p 60-64




27

ONTENTS

INTRODUCTION ........................................................................................................................... 1

HISTORICAL BACKGROUND........................................................................................................... 1

OBJECTIVE OF THE STUDY ............................................................................................................. 2

REVIEW OF RELATED LITERATURE (AND ANALYSIS OF PREVIOUS RESEARCH) ................................. 3

DEFINITION AND PRICE SEGMENTATION ....................................................................................... 3

PERCEPTUAL MAPPING OF LUXURY BRANDS ................................................................................. 4

BUSINESS PROCESS ...................................................................................................................... 5

PROFILE ..................................................................................................................................................... 5

BRAND IDENTITY ......................................................................................................................................... 6

ROLEX ....................................................................................................................................................... 6CARTIER ..................................................................................................................................................... 6

PRODUCTS ................................................................................................................................................. 7

INTERNAL ENVIRONMENT ............................................................................................................................. 9

MAJOR MARKET CONCENTRATIONS ............................................................................................................ 10

DIFFERENTIATION STRATEGY ....................................................................................................................... 11

ADVERTISING AND PROMOTION .................................................................................................................. 12

BACKWARD VERTICAL INTEGRATION ............................................................................................................ 12

DISTRIBUTION CHANNELS ........................................................................................................................... 13

ANALYSIS OF DATA .................................................................................................................... 15

WORLD WATCH REPORT – 2014 .................................................................................................. 15

PRODUCT DIFFERENTIATION ...................................................................................................... 18

ROLEX ..................................................................................................................................................... 18

CARTIER ................................................................................................................................................... 18

POSITIONING ............................................................................................................................. 19

ROLEX ..................................................................................................................................................... 19

CARTIER ................................................................................................................................................... 20

TARGET MARKET ........................................................................................................................ 20

ROLEX ..................................................................................................................................................... 20CARTIER ................................................................................................................................................... 21

SWOT ANALYSIS ......................................................................................................................... 21

ROLEX ..................................................................................................................................................... 21

CARTIER ................................................................................................................................................... 22

MAJOR FINDINGS ....................................................................................................................... 23

ROLEX VS CARTIER ..................................................................................................................... 23

COMPARISON MATRIX ............................................................................................................... 24

REFERENCES AND ANNXURES ..................................................................................................... 26

rolex vs cartier

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