Brand Management Brand Audit Term Project
Contents Brand Audit ....................................................................................................................................... 4 Brand Inventory ................................................................................................................................ 5
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History........................................................................................................................... 5
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Company Profile ............................................................................................................ 5
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Collection ...................................................................................................................... 6
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Current Positioning In The Marketplace ....................................................................... 7
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Communication strategy............................................................................................... 7
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Celebrity endorsement ................................................................................................. 7
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Mystery ......................................................................................................................... 8
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Product-Related Attributes ........................................................................................... 8
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Pricing and Distribution Strategy .................................................................................. 9
Brand report card....................................................................................................................... 9
Brand Exploratory ........................................................................................................................... 10 o
Customer Knowledge .................................................................................................. 10
Perceptual Map .............................................................................................. 10
Image Assosiations......................................................................................... 10
Current Sources of Brand Equity .................................................................................................... 10 o
Rolex Ambassadors ..................................................................................................... 11
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Sports & Culture.......................................................................................................... 11
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Philanthropy................................................................................................................ 11
Rolex Awards for Enterprise .......................................................................... 11
Rolex Young Laureates Program .................................................................... 12
Mentors and Protégés ................................................................................... 12
The Customer-Based Brand Equity Pyramid (CBBE) ....................................................................... 12 o
Ambassadors and event.............................................................................................. 13
SWOT Analysis ................................................................................................................................ 14 o
Weaknesses ................................................................................................................ 14
Prisoner of its strategy ................................................................................... 14
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Difficulty to control the brand ....................................................................... 14
Threats ........................................................................................................................ 14
Counterfeiting: a threat to equity.................................................................. 14
Youth does not recognize the brand ............................................................. 14
Opportunities.............................................................................................................. 14
Diversification ................................................................................................ 14
Strengthen position in emerging markets ..................................................... 15
Building brand community ............................................................................ 15
Associate youth with Rolex............................................................................ 15
Connect with Female Customers ................................................................... 15
Corporate Social Responsibility ..................................................................... 15
Joint Venture to Support a Cause .................................................................. 16
Rolex iPhone App ........................................................................................... 16
Rolex Maritime Quarterly on ipad ................................................................. 16
Attacking the counterfeit industry ................................................................ 16
Future of Rolex .............................................................................................................................. 17
olex is best known as the premier producer of fine watches in the world. Recognized as an innovator in technology and marketing, the company is credited with establishing the widespread popularity of the wristwatch in the early 20th century. Rolex watches are prized for their precision timekeeping, durability, functionality, and distinctive design. Rolex's mystique as a closely held private company and its carefully cultivated image continue to strengthen the watch's desirability as a status symbol as well as a precision instrument. Based in Geneva, Switzerland, where the company opened a new headquarters in 1995, Rolex has become closely linked with a number of major events in such sports as yachting, equestrian riding, golf, and tennis. Ever since its creation, Rolex has consistently focused on establishing the renown of the Rolex brand worldwide, ensuring that the Oyster is far more than a passing trend. To safeguard its reputation for quality and reliability, Rolex has created a global network of specialists who alone are qualified to guarantee Rolex owners worldwide of the authenticity of their watch and the dependability of the features which ensure its longevity.
Brand Audit The Rolex brand audit will consist of:
We will conclude by giving some recommendations to further enhance the positioning and strengthening brand equity.
Brand Inventory History Rolex began when German born Hans Wilsdorf and his brother in law, William Davis, founded the London based company, Wilsdorf & Davis in 1905. In 1908, Wilsdorf made up a logo and a name that was easy to pronounce in every language and short enough to figure on the dial of the watch, hence, the birth of Rolex. He registered the brand in Switzerland. In 1910, Rolex sent their first movement to the School of Horology in Switzerland. It was awarded the world's first wrist watch chronometer rating. Rolex created a timepiece that was small enough to be worn on the wrist.
Among the company's innovations are:
The first waterproof wristwatch "Oyster" The first wristwatch with an automatically changing date on the dial (Rolex DateJust) The first wristwatch with an automatically changing day and date on the dial (Rolex Day-Date) The first wristwatch case waterproof to 100 m (330 ft) (Rolex Oyster Perpetual Submariner) The first wristwatch to show two time zones at once (Rolex GMT Master) The first watchmaker to earn chronometer certification for a wristwatch
Company Profile Rolex has a very particular status; it belongs to the Wilsdorf trust and therefore cannot be sold. Rolex has always had the ability to privilege a long term development strategy. They do not have to deal with the pressure of shareholders who require short term benefits in order to show a profit from their investments through the redistribution of dividends. On the contrary, Rolex has the opportunity to reinvest the benefits in the company to improve distribution and after-sale services and to increase research and development. What is more, they are not pressured to follow the general trends of the industry in order to content shareholders. As an example, Rolex is the only big player that is not following a multi-brand strategy. Another particularity of Rolex, partially linked to the previous one, is that the company is as hermetic as its main model, the Oyster. In fact, due to its organization, the company does not have to publish financial information and top executives are usually very discrete and do
not give interviews. As a result the company is extremely secretive and all the numbers presented hereafter are only estimations. Rolex employs about 6000 persons worldwide of whom 3300 employees are based in Geneva, setting Rolex as one of the main employers and tax payers of Geneva. They are selling around 750000 watches each year for an estimated turnover included between 2.5 and 3 billions CHF.). Moreover, Rolex possesses 22 subsidiaries companies spread all over the world. Rolex also distinguishes itself from the others because, as already mentioned, it is one of the last group that is not pursuing a multi brand portfolio. In fact, it has a long tradition of “one brand and one product” that has always, nearly been respected. The only exception to this rule is the “Tudor” brand, Rolex’s second brand, positioned as a “cheaper” Rolex.
Even though Rolex possesses a second brand it cannot be compared to the frenetic takeovers that modified the watch-making world in 1991. In the same idea, Rolex has not, so far, diversified its name away in the production of parallel products. Finally, Rolex is not only an empire of watches. The holding also invested in real estate and financial assets (banks –Union of Bank of Switzerland-, chemicals and insurances).
Collection Rolex produces only round watches since more than 40 years. The brand encompasses only two collections: the Oyster that represents around 140 models and 80% of the sales and the Cellini. The design has always been very conservative and the only radical innovation was brought in 2000 with the launch of a colorful Oyster Daytona. Rolex includes three family brands of wristwatches, called “Collections”, each with a subset
of brands. 1. The Oyster Perpetual Collection includes the “traditional” Rolex wristwatch and has eight sub-brands that are differentiated by features and design. The Perpetual Collection targets affluent men and women. 2. The Oyster Professional Collection targets specific athletic and adventure users groups through its specific features and imagery. It includes seven sub-brands. 3. The Cellini Collections focuses on formal occasions through its elegant designs and encompasses seven sub-brands. This collection incorporates fashion and style features like coloured leather brands and extensive use of diamonds. In 1946, Hans Wilsdorf first introduced Tudor as a “fighter brand” to stave off competition
from the mid-range watches such as Tag Heuer, Citizen and Rado. Wilsdorf chose the name Tudor because he wanted to honor the Tudor period of England. Rolex Tudor manufactures
ladies' and men's watches with the same size as Rolex. It has a range of family brands or collections, namely Prince, Princess, Monarch, and Sport, each with its own sub-brands.
Current Positioning In The Marketplace Conservatism and tradition are the credos of Rolex strategy: same product and same communication in the last decades. Its unique communication strategy and differentiation enabled the company to gain a sustainable competitive advantage over the years. The brand embodied achievement and keep nurturing this myth thanks to successful celebrity endorsement. Rolex also maintains a part of mystery around its brand in order to cultivate the legend.
Communication strategy The communication strategy of Rolex is very elaborated and specific. The key points of their strategy rely on the use of sponsorship and particularly celebrity endorsement and the emphasis on being a mysterious brand.
Celebrity endorsement The use of testimonials has always played a key role in Rolex communication strategy. Since the first advertisement in 1927 showing a testimonial, Mercedes Gleitze, and the watch, Rolex has always been faithful to this concept. Of course the strategy has evolved but the association of a successful personality to the brand is still the heart of the communication. In the first years, the ambassador task was to use the watch in extreme conditions and prove that the product was robust and worked under exceptional conditions. The ambassador was a guarantee of the quality and reliability of the product. Rolex tries to exalt individual success choosing strong personalities, representing their time and their discipline. From dance choreographer Maurice Béjart, ice skater Peggy Fleming, photographer Helmut Newton, opera singer Placido Domingo and golf player Arnold Palmer to the explorer Sir Edmond Hillary, Rolex has always chosen the best people of their category to represent them. The idea is not to transfer the fame from a super star (pop singer, actor, top model, etc) to the brand quickly but to choose people who have achieved something and that are or will be a part of history, so that Rolex can join them writing it. Rolex has a very large range of communication themes, among them dance, equestrian, exploration, golf, racing, sailing, tennis, jazz, opera and classical music. What is more, Rolex is robustly involved in philanthropy: it is the initiator of a mentoring program, the Rolex Mentor and Protégé Arts Initiative, launched in 2002 as well as the Rolex Awards for Enterprises launched in 1978.
Mystery Rolex is certainly the most mysterious brand in the watch-making world, not only due to its particular status and the lack of financial information but also thanks to some key points of its communication strategy. First, Rolex tells great stories that feed the brand identity and build inspiration. The celebrity/event advertisements always start with a catching sentence followed by a short text presenting the achievement of the celebrity/event: “You have 100 days to travel 3924 km on foot. By the way yo u are in Antarctica.
Rolex is not boring its customer with the same perpetual old story. In fact, they can use so many celebrities and events that the reader feels like each story is always a new one. Even
the story concerning an ambassador usually evolves with its career and therefore is renewed. As an example, every time that an ambassador wins a competition, Rolex publishes a “congratulation” advertisement that describes the success of the celebrity at
this occasion. Rolex does not rely only on great stories but also on great pictures. Rolex strategy results in an impressive commitment or “loyalty beyond reason” from
customers waiting up to five years for an Oyster Daytona. The Oyster Daytona, probably the most easily recognized and highly sought after watch, is one of the most wanted by Rolex enthusiasts all over the world. This is not only the watch of collectors but also the watch of speculators.
Product-Related Attributes Throughout the years, Rolex timepieces have maintained the highest quality, durability, and prestige on which they originally were founded. Each Rolex consists of ten unique features that the company states as its “10 Golden Rules”:
1. 2. 3. 4.
Waterproof case Perpetual rotor The case back The Oyster case
5. The winding crown 6. The finest and purest materials 7. Quality control 8. Rolex self-winding movement 9. Testing from independent Controle Official Suisse des Chronometres 10. Rolex testing Rolex has always produced its own movements that separate it from other well-known mechanical brands. More than 200 craftsmen and technicians work on a watch before it acquires Rolex certification. Before leaving Geneva, every Rolex watch must travel through a high-tech obstacle course of quality-control checks. Every dial, bezel and winder will be checked and double-checked for scratches, dust and aesthetic imperfection. The microscopic distance between its hour and minute hands will be painstakingly calibrated to ascertain that they are lying perfectly parallel. An ominous-looking air-pressure chamber will verify that each watch is waterproof to a depth of 330 feet. (The Submariner and SeaDweller divers' models are guaranteed to 1,000 and 4,000 feet, respectively.) And every watch will engage in a precision face-off against an atomic-generated "überclock" that loses but two seconds every 100 years. Only after successfully passing dozens of checkpoints does a watch receive the Rolex seal. Such attention to detail limits Rolex's production to about 650,000 watches a year, based on industry estimates. " André Heiniger once said, "We've never wanted to be the biggest, but certainly one of the finest in the field."
Pricing and Distribution Strategy Rolex distinguishes itself through its premium pricing strategy. Prices start from around $2,500 for the basic Oyster Perpetual and can reach as high as $200,000. Within each style prices can vary by $2000 to $12,000 depending in the specific materials used such as steel or white gold. Rolex does not merchandise any of its watches online and sells through “Offic ial Rolex Dealers” of which there are approximately 60,000 worldwide.
Brand report card Brand Report Card Attributes Delivering on customers’ desires
Relevance Value positioning portfolio Integrated marketing activities Management Support & Monitoring
Score
Rating of importance
Prioritization
2 4 4 3 1 5 2 3
2 4 5 3 1 7 6 3
2 5 7 3 1 8 6 4
Brand Exploratory Customer Knowledge Rolex has successfully leveraged its history and tradition of excellence along with innovation to become the most powerful and recognized watchmaker in the world. Given below is the Rolex perceptual map and customers’ brand associations with Rolex
Perceptual Map
Image Assosiations
Current Sources of Brand Equity The Rolex name, one of the most recognized luxury brands in the world, is unarguably the company most important source of brand equity. Its crown logo is also a key source of
equity. Equity is contributed by the functional benefits Rolex provides the user, namely the quality, craftsmanship, and innovation that go into making the watches. An additional source of equity for Rolex is its image as an exclusive symbol, which confers emotional and self-expressive benefits to the user and is reinforced by its premium pricing and limited distribution. Three other key source of equity are:
Rolex Ambassadors Rolex has used different celebrities for its various campaigns throughout the time, the celebrity’s image and personality is matched with that of the watch and th en both are coupled together. This way the watch and the celebrity both complement each other and amplify the appeal. Lindsey Vonn is an American alpine ski racer. She won a Gold Medal in the 2010 Winter Olympics. Lindsey is featured in the Rolex 2010 ad campaign. Tiger Woods had his first major endorsement since his downfall two years ago, announcing a deal with Rolex to be one of its ambassadors. (October 2011). Ana Ivanovic has signed a worldwide endorsement contract with Rolex. The Rolex campaign featuring Roger Federer represents a strategy to equate a high-end watch brand with a tennis player who is known for being the best at his craft while showing professionalism and sportsmanship in the process.
Sports & Culture Since 1972, when Mercedes Gleitze swam across the English Channel wearing an Oyster
wristwatch, Rolex has been associated with the quest for excellence inherent in sports. Today Rolex supports top sporting and cultural events all over the world. It is present at more than 150 events in golf, sailing, tennis, skiing, yachting, motor sports, the arts and at equestrian tournaments. Given the longevity and strength of these relationships, Rolex is seen not merely as a sponsor but also as a partner. The Rolex association with golf began in 1967 when Arnold Palmer was presented with a gold Oyster Perpetual watch to honor his many achievements. Since that time Rolex has forged relationships with many of the game's greatest players and its major organizations. Integrity, precision and the skillful pursuit of excellence have made Rolex and golf perfect partners.
Philanthropy The Rolex Institute encourages visionary individuals who make a meaningful contribution in the world we live in through their exceptional talent, quality and achievements. The Institute honors and supports significant contributions to science, culture, education and arts. It includes all of Rolex’s philanthropic programs, patronage, educational initiatives
and specialized activities. Rolex achieves these objectives through the following programs:
Rolex Awards for Enterprise Over the past 35 years, the Rolex Awards for Enterprise has supported 115 pioneering individuals whose projects benefit their communities and the wider world. The awards support pioneering work in science and health, applied technology, exploration & discovery, the environment, and cultural heritage.
Rolex Young Laureates Program In 2010, the Rolex awards were extended to innovators aged 18 to 30 to implement their ground breaking projects.
Mentors and Protégés Since its launch more than a decade ago, the Rolex Mentors and Protégé Arts Institute has given 29 young artists from around the globe each the chance to benefit for a year of guidance and inspiration with an artistic master. The world’s most ambitious, wide ranging philanthropy in the arts, this programme works across six disciplines: dance, literature, film, theatre, visual arts, and music. Through the Arts Initiative, Rolex is perpetuating humanity’s
artistic heritage and giving gifted young artists the chance of a lifetime.
The Customer-Based Brand Equity Pyramid (CBBE) The Rolex CBBE pyramid is equally strong on the left hand and right hand sides. It is also strong from the bottom up. Rolex focused on both the superior product attributes and the imagery associated with owning and wearing a Rolex.
SWOT Analysis
Strengths
Financial
Rolex has huge financial capabilities. Many signs portray that their financial capacities are pretty good. For example Rolex inaugurated, by the end of 2004 a new 42000 m2 industrial complex worth 1 billion Swiss francs and that is entirely self-financed. As it has already been mentioned, many takeovers took place and has always been self-financed. What is more, the takeover of Rolex Bienne might enable them to increase profitability and by the way their financial capacities. Brand Awareness
The figure shows that Rolex has an awareness of 97%. As it has already been mentioned several times, the Rolex brand value is very high and the name is known all over the world.
Ambassadors and event The quality and diversity of Rolex’s ambassadors is difficult to imitate for its competitors.
Rolex is not only sponsoring events in order to have their name and logo placed on the event’s location, it als o uses these events on paper advertisement in order to increase their association with some precise field or sports (sailing, golf, etc).
SWOT Analysis Weaknesses Prisoner of its strategy The strategy has been so well defined that it would be difficult for the company to change radically its strategy or be more innovative. It might be difficult to explain a new strategy to the actual customer without confusing them. The disadvantage is that it could leave some unattainable segments on the market that Rolex will not be able to win. For example, if the fashion goes to square watches, Rolex might be penalized because even if they decide to product square watches, everybody expects a Rolex to be round. In this case, it would be difficult to get a market share of “square watches” market. Furthermore, Rolex‘s name is very strongly associated with luxury watches; some people often say “They are not making watches, they are making Rolex”.
Difficulty to control the brand It seems that sometimes, Rolex is loosing the control of its brand identity. Rolex is a brand that is loved and cherished. The problem arises when communication is maybe misunderstood or distorted and if the company does not try to rectify the alteration to its brand identity with a calibrated communication. In this case, a company might slowly loose its brand while the customer is taking control. It seems that Rolex has not always been fully in control: its name is often associated with “showing off” and “arrogant”. The customers
who like Rolex for its refinement, simplicity and traditional design might be confused to see the last hot rapper wearing the same watch than him.
Threats Counterfeiting: a threat to equity Counterfeiting Rolex watches has become a sophisticated industry with sales exceeding $1.8 billion per year. A counterfeit damage the company’s brand equity and presents a huge risk
to the brand.
Youth does not recognize the brand Rolex does not appeal to the youth. It is unlikely that young customer’s attitude towards luxury goods will evolve in the same manner as their parents’.
Opportunities There are vast opportunities available to Rolex. Given below are a few recommendations as to how Rolex can exploit these opportunities and further leverage its brand equity.
Diversification Rolex brand name is extremely valuable. It seems that it could be diversified in related fields like jewelry. The takeover of Gay Frères gives Rolex the capabilities to produce jewelry. The only problem they might encounter is that their name is too strongly associated with watch. In this case they could create a new brand in order to avoid dilution of the actual brand, but this would mean that they abandon all the advantages linked to the brand capital.
Strengthen position in emerging markets Rolex can research the potential opportunities in the emerging Chinese and Asian markets and exploit them.
Building brand community The creation of a brand community can increase the loyalty to a brand and by the same way customer retention. According to McAlexander et al. “a brand community from a customer
experiential perspective is a fabric of relationships in which the customer is situated. Crucial relationships include those between the customer and the brand, between the customer and the firm, between the customer and the product in use, and among fellow customers.”
Famous example of successful brand community building includes Ferrari and Harley Davidson.
Associate youth with Rolex Rolex purposely ignoring the fashion trends with the result that the younger generation does not recognize the brand. What is more, this strong reliance on tradition can also be perceived as a lack of idea and innovation. Rolex should research the current tastes of the many younger customers who are already in the market for Rolex watches. Its marketers should consider tailoring campaigns and watch designs for younger customers.
Connect with Female Customers Rolex has always had more of a “male” identity and sells a majority of their watches to men.
Its image campaigns also emphasize males to a greater extent. Research indicates that women make majority of the jewelry and watch purchases. Mechanical watches are usually designed for male with the idea that “women do not understand technology anyway” and
that quartz watch with a nice design were more appropriate for them. This tendency is slowly changing and women also want to buy technological timepieces. The opportunity of increasing their presence on the female segment should be exploited. It can do so by: Employing more female ambassadors and presenting them in its advertising and communication Joint Venture with De Beers and target females with an exclusive watch. More sponsorship of female attended sporting events, like ice skating, tennis, etc. Consider raising its profile with female sports enthusiasts and fans. Introduce family of female watches only. In addition to the above recommendations, Rolex can further leverage its secondary associations in the following ways:
Corporate Social Responsibility Rolex can raise awareness on environmental issues and sustainable development. This can be achieved by creating awareness how the steel used by Rolex is specially manipulated to reduce wastages, special alloys which can reduce the use of natural resources and at the same time provide the consumer with the same quality and experience that they expect out of Rolex products.
Joint Venture to Support a Cause An example of a cause can be fighting against preventable blindness. A special campaign can be launched and a unique watch can be designed to celebrate the partnership. The proceeds of the watch would be donated to the cause. Such an organization can deliver eye care to some of the world’s remote and less developed countries.
Rolex iPhone App This application would put the entire world of Rolex at the fingertips of the customers. They can browse collections; locate Rolex retailers, stay informed about news and events around the world and much more. Rolex Maritime Quarterly Magazine Rolex can launch a magazine featuring articles, photographs, news, events, updates, collections, etc. It can also dedicate editions to special events, for example Wimbledon or even James Bond.
Rolex Maritime Quarterly on ipad This can be made available at no cost to users. The digital edition of the magazine will present the full content of the print edition in addition to various interactive features. Rolex should specially develop an easily navigable custom-designed interface to create a totally new experience for its readers.
Attacking the counterfeit industry Counterfeiting damages the company’s brand equity and presents a huge risk to the brand.
Take for example the case of Evance, a Japanese distributor, hired Brad Pitt for 5 millions us dollars in order to endorse the Rolex brand in Japan. Apparently, Evance does not even have a license to sell Rolex watches. Therefore, they buy watches abroad on the grey market or even send their employees abroad in order to buy watches and resell them in their store. It shows the magnitude of the recognition of Rolex in Japan. Rolex needs to dedicate extensive resources to fight the illegal use of its brand name and also consider building an exclusive online store, or an exclusive distribution site from which all official e-retailers must link.
Future of Rolex
The future seems very bright for Rolex. They have the opportunity to expand geographically as well as on the women segment. Rolex has a strong symbolic consumption value. If we put this in light with the very strong emergence of India, Russia and especially China as major purchasing entity, it becomes clear that the brand has still an important margin of development available especially knowing that symbolic consumption is widely spread in emerging markets. Women also represent a segment in which Rolex could expand. The aging of population could also represent an increased market size. In fact, these people have an increased purchasing power and know the brand best. What is more, the notoriety of the brand could enable it to diversify in other fields (jewelry, etc). The ambassador campaign is also a valuable asset, which cannot be copied by competitors and therefore can protect Rolex from its competitors. Regarding its internal organization, Rolex seems to be very stable: top management, product design and communication strategy do not change much. The backward vertical integration might enable them to increase their margin and will enable the company to be fully independent in term of components supply.
