Introduction
Rolex is a luxury watchmaker that focuses on making high-quality elite wearables. It focuses on combining classic designs with innovative technology and materials in its watches. The marketing strategy is brand-focused, building equity around it that translates into sales. All its products, marketing, and content are focused on privilege and superior quality rather than attempting to quantify sales to the average consumer. The brand is associated with the best and most prominent figures in the world, including icons of sport, industry, and popular culture (Epstein). The elevated level of prestige and luxury is allowing the company to set high prices for its products and increase annual assets.
I agree strongly with the approach that Rolex has taken for its marketing strategy and brand growth. The brand value has become so equitable, that around the world it has become synonymous with the concept of a watch and the idea of luxury. The company’s approach to segmentation of capturing the majority of market share in the elite watch sector is significant since it can pursue a top-down strategy of growth. It no longer needs to worry about achieving the elite spot of its industry but can focus on gradually spreading into lower-level markets without disrupting its brand. Rolex has shown that a carefully crafted targeted advertising campaign in combination with its superior quality is the apex of marketing brand awareness.
Recommendations
The price of Rolex watches has become its distinguishing point of sale, adding on to the brand. However, it is only reachable for a very limited consumer population which eventually leads to decreased sales. Furthermore, it does not necessarily benefit Rolex if everyone knows the brand, but few can purchase it. Despite being of superior quality, the watches are considerably overpriced, far above inflation levels. As consumer purchasing power in global markets rises, it may be beneficial for Rolex to adjust its prices downward to begin targeting upper mid-class customers. The company will continue to bring in a profit, with previously high margins compensated by rapidly increased unit sales. It will allow access to emerging markets such as China (Tang). Wider availability of the product will not decrease brand value since Rolex can still maintain quality and its star-studded associations.
Rolex watches are the centerpiece of craftsmanship and reliability. However, despite innovating its mechanical watch technology, it remains with a classical design. As the future of wearable technology grows near, Rolex can lose its strategic position, requiring innovation of its product. Rolex is beginning to slowly shift its strategy of improving on traditional watchmaking by combining it with modern innovation. This includes the use of modern materials, everlasting mechanisms, and integrating IP68 protection (Koh). However, the company should attempt to break standards and create a new hybrid of watches, combining classical elements with electronic features of smart devices. Investment in research and development may prove to be profitable as market expectations and consumer demands transition to the future.
The method and place of advertising utilized by Rolex have been consistently traditional as well. Even in the 21st century it consistently uses print ads in magazines and runs its television commercials. Even these advertisements celebrate the iconic and historical status of the company. However, only in 2012 did it begin a slow transition to social media, creating Facebook and YouTube pages. These are used rarely and cautiously, rarely distributing any content (Epstein). The brand has actively emphasized its belief in customer feedback and social listening. However, with low social media participation where the majority of discussions are taking place, it is not utilizing that strategy well. The company should take a more aggressive social media approach to not only spread brand awareness but let customers know about the variety of products and promotions that are offered. It is a relatively inexpensive investment for the potential to increase sales in the long run.
Works Cited
Epstein, Eli. Rolex: How a 109-year-old Brand Thrives in the Digital Age.” Mashable. 2014.
Koh, Wei. “The Future is Now: Behind the Scenes at Rolex.” The Rake. 2015, Web.
Tang, Syl. “Time is Up for Above-Inflation Price Rises in the Watch Industry.” Financial Times. 2016.