The Jewelry Industry – Luxury Watches
Section 2 – Group Number 7
Rolex is currently facing a problem in their brand positioning in the U.S. luxury watch market. In the years following the 2008 recession, Rolex’s competitors Breitling and Omega have outpaced them in market share growth. This report aims to analyze the reasons behind this decline and to provide a recommendation for Rolex to reaffirm position as the market leader.
Our industry analysis shows that despite suffering from the sales decline during the recession, the luxury watch market has regained a growth rate of 7% after 2010. The intense …show more content…
Thus consumers are shifting towards purchasing watches strictly as luxury items or to make a fashion statement. Ultimately, luxury watchmakers must handle their brands with care, or risk losing to a more consistent competitor.
With many similarities between luxury watch brands, target market selection is paramount. In addition, brands must choose a market segment that they can grow with. Though 50% of all affluent consumers in the U.S. are aged 35-44 and 45-54, from a brand equity perspective it would not make sense to start marketing to just the older segment because this is the stage where the brand should already have a relationship with the consumer (Affluent Consumer, 2009) Therefore, by primarily targeting the 35-44 year old demographic, luxury watch brands are able to establish awareness and recognition that can build to a relationship that will last with that consumer as they age. Additionally, by selecting a male demographic, watchmakers gain access to the majority of the affluent population. Thus, the common target segment between Rolex, Omega and Breitling are affluent males age 35-44 with an above average income and a high socio-economic status. This segment is worth $316.25 million or approximately 13.75% of the luxury watch market (Affluent Consumer, 2009). For the complete breakdown of this