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Title: Marketing plan - Swiss Watch Industry ( Brand Positioning )
Description: This marketing plan is written on the Swiss Watch manufacturing industry. includes a marketing audit, positing and strategies.
Description: This marketing plan is written on the Swiss Watch manufacturing industry. includes a marketing audit, positing and strategies.
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REPORT (Title)
1
Executive Summary
The report was commissioned in order to recommend the potentially viable markets for Skagen to
enter and increase its global footprints
...
The report
recommends entering the Indian and the Mexican markets and advises the strategies to pursue
when entering the selected markets
...
Under
MICRO environment analysis the competitors and consumer behaviors has been identified &
analyzed and marketing strategies were recommended accordingly that should considered into
account by Skagen before the launch
...
Especially it recommends placing the products by selecting a franchise agent, either Reliance or
Biyani group in India
...
The report strongly recommends entering India and Mexico initially
...
Skagen should execute the product development opportunity as a secondary strategy once the
Asian market is penetrated
...
Upon success the diversification moves should be
evaluated
...
0)
Introduction
...
0)
Company overview
...
1)
Company profile
...
2)
Business model
...
4)
Analysis of Micro factors using Porter’s 5 forces
...
5)
Analysis of current marketing strategy using the marketing mix
...
6)
Key competitors in the global wrist watch market
...
0)
Market screening, selection and opportunity identification
...
1)
Analysis of market potentials for Skagen
...
2)
Market selection for Skagen
...
3)
Industry analysis for Indian watch market
...
4)
Industry analysis for Mexican watch market
...
5)
Product development and diversification
...
6)
Market entry modes
...
0)
Recommendation
...
1)
Enter the Indian market
...
2)
Enter the Mexican market
...
3)
Diversify into the clothing segment
...
4)
Consider the South East Asian Markets
...
5)
Obtaining sponsorships in major sporting events
...
0)
Conclusion
...
0)
Appendices
...
32
Appendix 02 – Year-on-year average growth rate
...
34
Appendix 04 – Market Value growth rate
...
36
7
...
39
3
1
...
Skagen since its launch has made remarkable improvements over a period of time but has not been
able to establish impressive brand awareness in the market place during recent past
...
Report evaluates the current position of Skagen and evaluates potential markets by recommending
entry modes to selected markets
...
1
...
0, such as Market
Development opportunities, Product Development opportunities and Diversification options
...
Report recommends Skagen to develop a new segment that is to launch a clothing segment but
advises to commission an extensive investment and market appraisal before the launch
...
0) Company overview
2
...
Originally started with a focused niche segment to design only for corporate gifts, now the strategy
has been shifted to fast fashion by introducing latest trends at frequent intervals within a year
...
With fifteen years of a successful history in the industry Skagen has passed many remarkable
milestones such as;
Founded in an apartment in New York in 1990
In 1991 produced 800 copies of four different designs under the own brand of ‘Skagen
Denmark’
Within two years in 1992 the annual turnover became USD 800,000
Started the placing of watches at Bloomingdale’s in 1995
In 1998 Skagen began the European operations with an office in Denmark and 80 stores
throughout the country
...
1200% increase within five
years
Distribution begins in the UK
In 2000 operations started in Germany & Netherlands
In 2002 operations began in Finland, Iceland, Ukraine & Kuwait
Turnover has increased approximately to USD 70 million in 2005
Became the official sponsor of CSC team in 2006 which is a dramatic change in Skagen’s
promotion campaign
Diversifying into other product segments like accessories, Jewelry and gift items
5
Launching the virtual store
2
...
The
concept followed is fast fashion where the designs are changed each time a customer browse
Skagen’s new designs
...
The company is especially into the market of mid-range products where the wrist
watch price varies from $50 - $275
...
The placing strategy has
been arranged through opening of own stores in each geographic region and as a result Skagen is
able to deliver a better after sales service to the customer
...
3)
SWOT analysis for Skagen
Based on the SWOT analysis it is evident that one of the key strengths of Skagen is launching new
designs at a frequency of 5 times a year
...
Access to low cost manufacturers would enable Skagen to achieve better margins and as a result
would be able to build healthy cash flows in the long run with the increasing demand pattern
...
However Skagen’s rapid growth happened until 2006 had not resulted in being a renowned and a
most sought after brand even at the present context in 2014
...
Major brands like CK, Gucci, Swatch, Guess, Armani would be a competitive threat to Skagen but
the key mitigation advantage is the fast fashion concept and the low cost advantage of the
organization
...
- Less financially strong
compared to competitors
- No sponsorships obtained
after sponsoring CSC in 2006
- Inability to be a renowned &
a sought after brand even by
2014
- No market presence in Asia
Threats
- High competition from
renowned brands
- Introduction of smart watch
named iwatch by Apple
[Figure 1]- Source Author
8
2
...
As shown in figure 2 the competition could be sever from major players however, their design
concept is not strong as Skagen’s fast fashion concept
...
in the
long run as already it has been proved by the year on year increasing rate of the annual turnover
figure
...
However, only limited suppliers would exist in order to produce the best quality
watches
...
For a new comer to be successful in the market place it should possess a range of core
competencies
...
Skagen owners Henrik Jorst and Charlotte possess the unique capability of
designing watches for the upcoming trends
...
The overall assessment on the forces of micro environment analysis for Skagen would be favorable
as the impact of these forces could be mitigated utilizing the strengths and future opportunities of
the organization as figured in figure 1
...
5)
Analysis of current marketing strategy using the marketing mix
Using four P’s model the Skagen’s current marketing strategy could be evaluated
...
Offer a wide product range such as wrist watches, Accessories, jewelry and gift items
providing a better customer experience enabling to make a wide selection and create
the environment for cross selling
...
For wrist watches the target market is the middle class professionals & the sporting
crowd
...
iii
...
iv
...
v
...
Also advertising is done through its own Skagen
web site, social media marketing through Facebook and publishing of videos through
you tube
...
6)
Key competitors in the global wrist watch market
ROLEX
OMEGA
BREITLING
PATEK
PHILIPPE
TISSOT
SKAGEN
TAG
HEUER
CITIZEN
TITAN
CARTIER
PANERAI
[Figure 04] – Source - Author
13
3
...
Ansoff presented a matrix that focused on four possible product/market growth strategies for any
business
...
Selling existing products to existing markets – Market penetration
ii
...
Developing new products for existing markets – Product development
iv
...
I
...
[1957] Strategies for diversification, Harvard business review, vol
...
Enter new markets
such as India &
Mexico with watches
and accessories
ii
...
Clothing fashion
stores to existing
markets in USA and
Europe starting with
Italy
Diversification
i
...
However, in
expanding in to new strategic markets an extensive screening method need to be adopted by
Skagen
...
Screening Method
Country Identification
(Based on a possitive growth over 10%)
[India, Mexico, Belgium, Germany, Austrailia, Italy Sweden,
China]
Preliminery Screening
(New markets which has no Skagen foot print)
India, Mexico, Austrailia, Sweden, China
In-Depth Screening
(Top three in market values)
India, Mexico,China
Final Selection
(Existance of ideal
Mid-range markets &
growth potential)
India, Mexico
Direct
Exp
...
1)
Analysis of market potentials for Skagen
Potential markets for Skagen has been assessed based on the information available on market
growth and the market value data
...
The market will be chosen
primarily based on its potential for wrist watches and the market data for miscellaneous product
groups were disregarded on this analysis
...
And the market could be expected to grow further as India has the
highest average population growth rate of 1
...
Secondly the ideal market would be Mexico as it is a rapidly growing market beating even China
in 2012
...
Wrist watch market volumes
140,000
...
00
India
100,000
...
00
Germany
60,000
...
00
Italy
Sweden
20,000
...
Germany and Italy shows a less growth potential but the market values are high
...
Therefore these markets were taken-out at the preliminary screening level as no
further investments to be made
...
44) through its market and population growth
...
The market is led by
Swatch group having a share of 13% followed by Richemont de Mexico with a share of 8%
...
Market Values (USD Millions)
140,000
...
00
India
100,000
...
00
Germany
60,000
...
00
Italy
Sweden
20,000
...
2)
Market selection for Skagen
The ideal potential markets for Skagen to enter are India, Mexico and China based on the analysis
results of section 3
...
Skagen should expect and intense competition in India and China
where especially India is a country which promote majority of the locally made products
...
Entering the Chinese market would inevitably require setting up production
facilities and as a result the payback period could be longer than the expectation due to the low
prices that have to be offered
...
This could be potentially adverse
to Skagen since the company has always maintained high quality in designs and its products
...
However, due to the fact that China is an inferior market, ideal markets for Skagen to enter would
be India & Mexico
...
3)
Industry analysis for Indian watch market
Indian watch market mainly has three segments
...
Segment
Mass market
Mid-Market
Premium market
Market share
37%
38%
25%
Price Range
Below INR1000
INR 1000 – INR 10,000
Above 10,000
www
...
com [2013]
...
http://www
...
com/consumer-productsand-retail/global-luxury-goods-market/india-watch-market-research-report/419-95
...
[Accessed: 22/07/2014]
The Mass market segment is also known as the unorganized segment where lot of the casual dealers
& black market would operate hence predicting the market movements is difficult
...
Key competitors in the Indian market are Titan who is the market leader followed by HMT
(Hindustani machine tools) and Timex
...
Titan was the pioneer in introducing fashionable watches in India
...
www
...
com [2013]
...
http://www
...
com/News/Consumer-Goods/Indian-watch-market-led-byTitan-Industries-with-a-28-value-share/NI8382
...
Number of suppliers
availablle but quality is a
question
NEW ENTRANTS
- New designers can enter
- High frequancy of new
entrants
POWER OF CUSTOMERS
- Faith on local brands
- Low switching cost
SUBSTITUTES
- Mobile phones
- Computers, Smart
phones, Smart watches &
Tablets
[Figure 10]- Source - Author
21
3
...
The market is led by Swatch
group with a share of 13%
...
60% - 70% of the market comprises the low end market where Skagen should
particularly focus in establishing a mid-range market by capitalizing the opportunity
...
5)
Product development and diversification
As Skagen is already into the fashion business the company could consider the growth options of
stepping into the clothing segment by opening fashion stores around the globe
...
Entry to the Italian market with the new segment would be a better option as already Skagen has
its brand established in Italy
...
However an extensive market research with proper investment appraisals needs to be carried out
to evaluate these options as the risk of these options should also be quantified and assessed
...
6)
Market entry modes
There are number of market entry modes to be considered by Skagen
...
Out of these the most suitable for the company would be Franchising and FDI
...
Selecting a suitable franchisee would
enable to better place the products among the customer
...
The direct investment would be better if the market is known and operate with similar market
sentiments
...
As a result the manufacturing could be done in USA and easily being shipped
to Mexico where a huge cost advantages also could be earned through free trade agreements
between two countries
...
For India where a huge uncertainty would exist, placing the products could be difficult compared
to Mexico
...
And
the population would also have the faith on locally manufactured products most of the time
...
And also
establishing manufacturing facilities in India would enable Skagen to save a huge amount of cost
compared to producing in USA or in Denmark
...
Then after a period of time Skagen should establish manufacturing facilities in India to become a
truly local fashion maker
...
0) Recommendation
4
...
Skagen could consider several franchisees like ‘Reliance Mart’ and ‘Biyani group’ where they
operate in almost every state in India and these players have separate segments for foreign branded
electronic and fashion items
...
Further when conducting marketing it is important to use a brand ambassador and this character
should inevitably be either a Hindi film or a cricket star that is famous across the country
...
27
Marketing Mix for India
PRODUCT
- Enter the market introducing
wrist watches
- Introduce accessories at the
second phase
PRICE
- Mid market prices
PROMOTION
- Introductory special discounts
PLACE
- Initially use Reliance or Biyani
marts to place the products
- Skagen's online store
- Magazines, news papers
- Use a brand ambassador
- Sponsor IPL T20
- Use TV commercials
- Online promotions
[Figure 13] - Source - Author
28
4
...
Marketing Mix for Mexico
PRODUCT
- Enter the market introducing
wrist watches
- Introduce accessories at the
second phase
PRICE
- Operate with the same price
range in USA
PROMOTION
PLACE
- Open stores in major cities
- Skagen's online store
- Introductory special discounts
- Magazines, news papers
- Use TV commercials
- Online promotions
[Figure 14]- Source - Author
29
4
...
The analysis should comprise the key markets (Feasible existing markets
and new markets), competitor analysis, risks, a detailed feasibility report and assessment of core
competencies in order to diversify into the segment
...
4)
Consider the South East Asian Markets
If primary strategies i
...
India and Mexico were successful then Skagen should consider the South
East Asia specially Singapore
...
A proper market evaluation
should be done prior to its launch
...
5)
Obtaining sponsorships in major sporting events
Skagen had not been able to secure the sponsorships of major world events after the doping scandal
happened in 2006
...
Since Skagen is planning to enter the Indian market it should inevitably secure the sponsorship of
IPL T20 championship which would enable Skagen to create the brand awareness across the subcontinent within a month
...
0) Conclusion
In conclusion Skagen should follow the Market Development strategies as identified in the report
and execute the strategic plan accordingly
...
1 & 4
...
31
6
...
18
51,105
...
34
10,471
...
88
7,168
...
29
65,408
...
92
54,580
...
30
11,120
...
97
7,455
...
53
66,846
...
53
58,292
...
61
11,809
...
57
7,753
...
82
68,317
...
77
62,255
...
47
12,542
...
20
8,064
...
25
69,820
...
53
66,489
...
10
13,319
...
41
8,386
...
93
71,356
...
89
71,010
...
74
14,145
...
78
8,722
...
96
72,926
...
26
75,839
...
64
15,022
...
92
9,071
...
45
74,530
...
63
80,996
...
05
15,953
...
47
9,433
...
50
76,170
...
Highlighted lines – Already entered markets
Plain lines – Potential markets
ii
...
Values are projected values based on an assumed year-on-year growth rate (Appendix 02)
Assumptions
i
...
00 35,876
...
72 41,778
...
00 52,324
...
2
35,690
...
57 34,946
...
71 46,780
...
56
34
6
...
00
515
...
37
739
...
06
819
...
2
7,501
...
94 8,217
...
34 10,918
...
88
31
6
...
74 3,505
...
25 3,817
...
20 4,001
...
08 5,482
...
33 5,874
...
52 6,893
...
00 2,565
...
00 2,719
...
00 2,884
...
2
57,500
...
00 61,000
...
00 59,725
...
00
11
2
...
Assumptions
i
...
54
535
...
98
3,586
...
88
1,411
...
98
736
...
66
661
...
71
4,354
...
57
1,518
...
48
827
...
97 10,697
...
20 35,435
...
08 1,007
...
70 1,533
...
53
37
...
47
41
...
16 6,417
...
72 9,457
...
47
456
...
64
580
...
96 1,758
...
76 2,035
...
20
459
...
55
551
...
25 1,045
...
26 1,320
...
10
1,892
...
84
11,481
...
82
2,190
...
87
1,484
...
44
2,335
...
21
13,939
...
63
2,356
...
94
1,668
...
ii
...
Values are in USD Millions
Values are projected values based on an assumed year-on-year growth rate (Appendix 04)
Annual figures are based on average year-on-year growth rates
34
Appendix 04 – Market Value growth rate
Country
India
Mexico
Belgium
Germany
Austrailia
Italy
Sweden
China
2000
192
...
44
23
...
95
171
...
62
214
...
27
2001
232
...
59
17
...
96
168
...
02
198
...
66
2002
288
...
57
20
...
75
181
...
11
218
...
67
2003
416
...
69
26
...
99
226
...
06
273
...
28
2004
675
...
17
29
...
60
264
...
72
312
...
10
2005
975
...
30
30
...
50
281
...
61
318
...
09
Growth %
410
117
27
107
64
38
48
62
Average Growth
82
23
...
4
21
...
8
7
...
6
12
...
Assumptions
i
...
Values are in Millions
ii
...
Average year-on-year growth rate is calculated based on the formula;
[Total growth from year 2000 to 2005 / Number of increments (5)]
Assumptions
ii
...
kenresearch
...
Ken Research
...
kenresearch
...
html
...
companiesandmarkets
...
Companies and Markets
...
companiesandmarkets
...
[Accessed: 25/07/2014]
38
Title: Marketing plan - Swiss Watch Industry ( Brand Positioning )
Description: This marketing plan is written on the Swiss Watch manufacturing industry. includes a marketing audit, positing and strategies.
Description: This marketing plan is written on the Swiss Watch manufacturing industry. includes a marketing audit, positing and strategies.