Strategic Analysis Of M&S

1.0 INDUSTRY OVERVIEW

Worldwide luxury watch market is completely dominated by Switzerland which contributes almost 100 percent of the market value. Swiss made timepieces are to be found in all the countries of the globe. And, what is no less surprising, to suit all pockets, or almost so: from quartz fashion watches for a modest price to mechanical masterpieces, made of gold and decorated with precious stones, costing several million francs. It is this wide variety and its worldwide vocation which together have ensured the survival of the industry over the course of centuries.

It is traditionally considered a male domain; however women are also driving up sales now. Luxury watch makers are trying their best to design the female equivalent of their most popular watch models. Another notable trend is the integration of new technology and the use of unconventional materials in luxury watches. Also all major brands are raising their price level by repositioning of their products.

Markets and Competition

While the Swiss watch industry is present all over the world (it exports nearly 95% of its production), it does not carry equal weight everywhere.

Asia and Oceania take 44% of Swiss watch exports in value, Europe 34%, Americas 21% and Africa 1% and the top fifteen countries represent over 82 % of these exports.

With their worldwide reputation for quality and styling, Swiss watches are not however the only ones to compete for the favours of customers. They have many competitors in the markets, the most serious of these being the Japanese and Hong Kong producers.

1.1 MAJOR COMPETITORS

The major export markets include United States, France, Germany, Italy, and United Kingdom. Rolex dominates the luxury watch market, followed by Tag Heuer which is currently in forth place after its competitors Omega and Breitling with markets in China, India and Russia yet to be tapped. Other brands in the market consist of the following: Cartier, Bulgari, Chopard, Ebel, Girard-Perregaux, Jaeger-LeCoultre, Longines, and Patek Philippe.

However it is considered that TAG Heuer and Omega are direct competitors due to the reputation, prestige, quality, movement and also because they are in the same range of price

Key facts of TAG Heuer

TAG Heuer achieved double-digit growth in the market where 3% - 5% is normal

Its watch retail is at 1,000 Ð'- 3,000 the mid-market of luxury watches

TAG is the forth largest watch brand globally

SOURCE: (http://cribceb.com/2006/01/01/styleand substance/)

Appendix A gives a brief history of TAG Heuer watches

2.0 BRAND ESSENCE

The dictionary defines essence as 'the intrinsic or indispensable properties that serve to characterize or identify something'.

What is brand essence?

The brand essence is a representation of the brand identity and a summary of the brand values. These values form the core of the brand's identity, what the company believes in, the guiding ethos in which activities and behaviour can be measured against; they are intrinsic to the company and are used as the framework for communications, culture and the outward facing personality.

What is brand identity?

Brand identity states how Ð''marketers can understand what gives their brand value and makes the brand unique'. (adapted from Kapferer 2004 p95)

This can be looked at through the following elements of the product:

Design

Name

Logo

Packaging

Colour

Design

The connection with fashion and architecture raise brands into the realm of art which is perceived as being enduring. Designs is no longer an elite association, consumers are becoming more design aware.

The design of watches has differentiated throughout time, depending on the fashion and trends. TAG Heuer has always been at the forefront of design and technology Appendix B shows history of the timepieces.

Name

It is vital that brand names are distinctive, memorable, easy to pronounce, brings to mind positive association and fit the category. The name is a representative of the value the brand can have for a company.

There are various brand name strategies. TAG Heuer uses the dualithic strategy where brand is paired up with sub-brand name. For example TAG Heuer F1 diamonds, TAG Heuer Carrera TachymÐ"Ёtre etc.

The name TAG Heuer comes from - TAG meaning day and Heuer representing Edouard's surname

Logo

Logos have become shorthand for what a brand means and represents, it enhances communications and influences consumers to be receptive to a company's message. Furthermore corporate logos are being designed to connect organisations and consumers, and define the personality of the organisation.

Referring to the questionnaire in Appendix C when asked Ð''What is the first thing you think of when you see the brand Tag Heuer?' majority of the answers received stated these words; reliable, quality, reputation, expensive, sports etc. This therefore it shows just by seeing the logo one can automatically describe how they interpret that brand.

Looking at this logo in the word Ð''TAG' the G is made up from arrows which symbolises the hands on the watch

Packaging

Packaging helps consumers make brand associations which build up to a positive overall brand image (Keller 1991). It performs many functional roles: protection, safety, identification, display, carries legal information and storage.

Colours

Colours in products convey crucial information. It is essential that the colours are chosen wisely as it encourages better recall and an understanding of what the brand represents.

Referring