Executive Summary
The essay is an exposition into the promotional efforts of Rolex. Rolex sells high-end products in high-end market. The aim of the essay is to understand the marketing strategy of Rolex and look into the company’s latest promotional campaign. The essay also identifies the segmentation strategy of Rolex and its target customers. The essay analyses the marketing strategy using the four Ps concepts. The essay also shows that Rolex is expanding its target segment and its promotional strategy is aimed at targeting new customer.
Product
This essay studies the marketing strategy of chronographs, which is essentially a timepiece that is supposed to give accurate time, produced and marketed by Rolex. These high-end watches are priced very high. Hence, the marketing campaign that the products follow is unlike that of mass marketing consumer products. The main aim of the marketing campaigns used for a Rolex watch is to stress on the brand and its uniqueness.
The campaigns demonstrate the distinctiveness and the design of the product. The advertisements for a Rolex watch usually demonstrate the product very clearly through a message produced through celebrity endorsement. The marketing campaigns are clear as they clearly show the kind of people who are the targets for the product – rich, affluent, successful people. Marketing campaigns for Rolex, watches display style and luxury.
Marketing Campaign for Rolex Watches
Rolex has traditionally marketed to the rich and affluent men. However, recently the company has targeted its marketing campaigns towards women. Retaining their generic luxury watch branding strategy, the company has diversified its target market and hence male and female celebrities are now endorsing the advertisements. Rolex’s advertising strategy entails celebrity endorsements.
In order to cater to a certain economic class the company meticulously positions itself targeting the rich and the ones who crave for “class” rather than “beauty” (The article presents a clear idea of the nature of promotions that Rolex practiced historically)(Hodinkee). This is evident from the taglines used in previous Rolex advertisements such as “Class is forever” (The website also archives older advertisments of Rolex and other premium watches) (OyesterInfo).
Segmentation
Traditionally luxury watches like Rolex chose an income segment of very rich individuals. Overall, the luxury watch market has three types watch brands – the exclusive luxury segment, the affordable luxury segment, and the mid and low range luxury segment. This categorization is based on the brand’s pricing policy.
The advertisement campaign clearly demonstrates the market segment that the brand wants to capture. Rolex sells its product in the exclusive luxury segment. The advertisement campaigns of Rolex demonstrate that it is an expensive product. In a recent advertisement campaign by Rolex, the advertisement demonstrated a high-rise corporate office and the tagline stating, “If you were speaking here tomorrow you would wear a Rolex”. This implied that if one were rich enough tomorrow one would want to wear a Rolex watch.
Target
The target customers for Rolex watches are wealthy and successful professionals of either sex. The advertisements are placed accordingly to reach the targeted demographics i.e., wealthy professionals. Rolex puts in its print advertisements in high-end lifestyle magazines like Monocle.
Rolex uses multiple celebrity endorsement for their ad campaigns in order to represent strong and successful professionals. Rolex uses endorsers (see figure 1) like tennis player Roger Federer with tags “Let’s not talk history yet. He’s still making it” and No. 1 women’s golfer Lorena Ochoa with the tag, “Rolex. A crown for every achievement” (Rolex) (Rolex’s website has information regarding the company’s past marketing strategy and future strategies that the company intends to adopt). The target customers for Rolex are both male and female.
Competitive Positioning of the Product
The emerging economies have become a melting pot for all luxury items, and watches are no exception. According to the predictions of analysts by 2018, Asia Pacific will be biggest market for luxury goods (Wang) (The article by Lisa Wang is exceedingly informative and provides insight into the prospect emerging markets hold for luxury goods). This presents a unique opportunity for luxury watch brand like Rolex.
In order to remain competitive, Rolex must understand which companies are its direct and indirect competitors. Substitutes too can emerge as a threat and therefore, understanding the strategy of substitutes is also important. One of the competitive advantages of Rolex is its brand recognition and loyalty. The direct competitors of Rolex are other luxury watch brands like Omega, Longines, Cartier, Chanel, Patek Philippe, etc. Figure 2 below shows the market share of the various luxury brands.
Marketing strategy
This section presents the marketing strategy of Rolex using the four Ps concept of marketing. The products that are presently marketed by Rolex are divided into three collections – Oyster collection, new 2013 collection, and Cellini Collection. The oyster collection boasts of “elegance and prestige” (Rolex) and has twenty models in the collection.
The second collection is the new 2013 collection of Rolex is a new collection of chronometers with cutting-age technology instilled in them to attract the new generations and retaining their old classiness. The third collection is the Cellini collection (Rolex) (Rolex website is rich with the current products that the company markets). The second concern is that of pricing. The watches sold by Rolex are priced high (usually above $5000). The pricing strategy goes with their promotion and positioning strategy.
Further, as their products are made with very expensive raw material and they happen to be fitted with the best quality technology. The high price is equivalent to the positioning of the product as a luxury item. Superior position entails niche products with high degree of differentiation and concentration on pricing. The products are positioned in a niche market as luxury brand with high pricing.
An analysis of the macro and the microenvironment helps to ascertain the threats and opportunities that are present for the brand in the market. In case of Rolex, the threat is the aging demographics of the target market of the brand. With aging population, the taste and preference of people are changing considerably, which has inculcated a threat to the organization’s product demand (Forster) (Rolex faces problems from competitors and their dated promotional strategy. The article presents the reasons for Rolex’s problems.). Thus, the aim of Rolex should be to target younger target market (Onofrei) (This article too states the problem with Rolex is its inability to attract new generations).
The market segment that the company has placed its product is in the luxury market, and the prices are high as they are placed in the luxury market. Rolex watches are branded as a symbol of superiority. For instance, older advertisement campaigns of the company had tag lines like “If you were looking for lost empires here tomorrow you’d wear a Rolex” (OyesterInfo) (Advertisements of Rolex have been discussed in detail in this article). The positioning of the product is that of excellence and symbol of success. The promotional strategy of Rolex can be categorized into following classes –
- Television commercials.
- Print advertisements.
- Sponsors of gaming events (e.g. Wimbledon).
- Embedded advertisements (e.g. James Bond movies).
In television, the advertisements are usually placed in the lifestyle or sports channels showing major sporting events like tennis and golf. Usually, Rolex advertisements accompany airing of James Bond movies. Rolex spends most in newspaper and magazine advertisements.
Objective of the marketing strategy
The aim of the present marketing strategy is to attract the new generation of consumers – men and women, more technology oriented, but still looking for exclusivity in their watch.
Short term action plan
The short-term action plan of the company is to generate advertisement campaign that would target the new age customers, who are not constraint to the traditional sports or professionals. These people are associated with various fields of profession and are successful in their profession. The plan is to attract these customers, retaining their timeless appeal.
Measures of success
The key factors that will demonstrate the success of the marketing campaign are – increase in sale in different parts of the geography, increase in sale of their watches made for women, and increase in sale of their products in different age demographics.
Cost of the plan – approximate expense
Rolex spends a lot in its advertisement campaigns. Most of the advertisements are print advertisements published in high-end magazines and newspapers. The advertisement expenditure of Rolex is higher compared to its competitors in the luxury watch market (see figure 3).
Estimated payoff
The payoff of such an expensive advertisement campaign of Roles is its brand value. Rolex is the most valuable brand of the world with a brand value of 7.4 billion and revenue of 4.5 billion in 2012 (Rolex) (Information from the company website is elaborate and helpful).
Conclusion
The brand of Rolex is well known and the marketing strategy that the company has employed is same for many years. Rolex targets rich professionals and the products are priced high. The promotion of the brand is done in high-end magazines or through sports. The advertisement campaigns usually have celebrity endorsement to demonstrate the exclusive status of the brand. Overall, Rolex follows a well-rounded marketing strategy.
Works Cited
Adams, Ariel. Wrist Watch Brands & Models Of High Value. 2013. Web.
Forster, Jack. “The Rolex Problem.” 2012. Forbes. Web.
Hodinkee. “A Quick Look At The New Rolex Ad Campaign: Highlighting Innovators And Rolex Wearers.” 2013. Hodinkee. Web.
MPP-ME. “Advertising Spend (Part 2/5)-Watch & Jewellery Sector Analysis”. MPP-ME. 2013. Web.
Onofrei, Ioana. “How Rolex could become a prisoner of its own strategy.” Brand Magazine. 2012. Web.
OyesterInfo. “Rolex Advertisments.” 2013. Web..
Rolex. “About Rolex.” 2013. Rolex. Web.
Wang, Lisa. “Luxury Sales to Exceed $318 Billion, Driven by Emerging Markets and ‘Affordable Luxury’.” 2013. Web.