Inputs, cost and profitability of Watch companies

Inputs of Watch companies

Inputs are usually the resources that a business uses for the production of their required products. These resources include labors, raw materials, energy, information and other resources like finance. The main inputs that a watch making business (like Tag Heuer) uses includes best leather, steel, rubber, gold, diamonds, and sapphire crystal make it to your wrist.

Leather straps: the leather these companies use are put into the most meticulous hands which results into to finest straps.

Diamonds: the diamonds these companies select for their watches are strictly selected for their stunning finish.

Costs of Watch companies

The type of cost of a company depends on the industry of the company. The industry we are dealing which is related to watches industry. However there are some costs that directly are linked to the company while the other costs can be linked to a lot of industries. For example let’s take the labor cost. These costs occur in every company irrespective of the type of the industry in which it deals. The operations of the business can be only carried if it has the labor force.

On the other hand some of the costs which only relates to the industry specifically will not be incurred by someone else. For example the type of material that can be used in one industry may not be used by any other industry. Similarly companies which provide only services sill not incur the material costs. In a watches company the labor has to incur along with the material costs for example the mirror material, iron and quartz and silicon etc. [1]

Profitability of Watch companies

The profitability is the amount or return the company has made over its financial period. This can be found by the sales revenue less all types of costs for example the fixed costs, labor, material and overheads etc. the profitability of a company can be increased by increasing the prices or reducing the costs it incur. In a service industry the profitability can be derived of the sales revenue less the expenses they have incurred, as there will be no material costs in the service industry.

Market structure of Rolex and Tag Heuer

Product in the marketing structure of Tag Heuer of Watch companies

Tag Heuer is dealing with the manufacturing, designing and marketing of watches and other accessories. The first watched was presented by the founder of Tag Heuer in the year 1882 and then in 1914, first wrist-watch was introduced. Then in the year 2002, Morez Group of Tag Heuer started manufacturing of eyewear and after that in the year 2007 Modelabs Group started working with Tag Heuer and introduce mobile phones. Specialized featured watches of Tag Heuer are;

·         Screw-in crown

·         Scratch resistance

·         Water resistance and many more.

Product in the marketing structure of Rolex of Watch companies

Rolex is the first company in this industry who has got distinction in the manufacturing of many first innovative products due to its R&D. They are very well known for the manufacturing of unique and timeless watches. They are the first in this industry who have got chronometer certificate, introduced first watches which changes dates automatically, and most importantly introduced first wrist watch which was waterproof. [2]

The series of Rolex watches are;

·         DEEP SEA

·         GMT-MASTER

·         Milgauss and many more.

Place in the marketing structure of Tag Heuer of Watch companies

Tag Heuer is a private owned company and has provided their products to more than one hundred and twenty countries in six out of seventh continent of the world. The major countries in which they supply their products include but not limited to Argentina, Mexico, United States, United Kingdom, Indonesia and many more.

Their main headquarter is at La Chaux-de-Fonds in Switzerland. Firs they started their operations at St-Imier in Switzerland and now they have workshop and watchmaking facilities at Cornell and Chaux-de-Fonds. They are working with wide spread distribution channels and include dealers to reach end consumers via specialty stores and luxury department stores.

Place in the marketing structure of Rolex of Watch companies

Rolex has definitely developed a personal relationship with their clients as they provide its actual brand image. Rolex does not provide their products sales at poor locations for example at small showroom and not even on the internet. They allow their products at limited stores thus avoid the chances of counterfeit watches.

They do not have very large distribution channels, but to maintain their premium value they definitely has a premium channel. They have provided their products at almost one hundred countries and with 28 affiliates and 4,000 watch makers. Their retailers and outlets are available in almost every continent of the world.

Future Trend and Expectations of Watch companies

In this rapidly changing technology era, the increasing demand of consumers for luxury smart watches and wearable are on the rise. The most interesting fact is that these traditional watch making industries like Tag Heuer, Rolex and Swiss Watches would interpret the invasion of smart watches into the market place. [3]

Now a day the responses related to watches are varied. Some watch making companies like Swiss Watch executive remained positive and says that the smart watches does not have made any affecting on their 2017 sales. While on the other hand Tag Heuer says that they have seen a rising trend on the sale of smart watches. So the companies should produce watches which meet day to day needs of their customers. They should mainly focus on the new technology rise and also should look after the luxury side of these watches. But above these, following points should be kept in mind.

The Millennial Customer of Watch companies

Reports has shown that at least 58% of millennial customers before buying a luxury watch, they first compare the prices of the top brands online and also take look into the customers reviews related to these products. So this makes very important for top brands like Tag Heuer and Rolex to have an online store or website that can have access to their customers. This also makes it very easy for them to have an understanding of their customers’ choice and how they feel about their products. So these top companies should focus on young generation who always seen browsing about these products online and mainly through social media.

Adopting technology of Watch companies

The luxury watch providing brands like Tag Heuer and Rolex must keep up with the times by including and adapting the modern technology in their products. The should look at modern needs of their customers who are always want to have modern technology in their products especially in their smart watches and in their smart phones. So this is only possible for these companies to have an amalgamation of the luxury watch and new technology like GPS tracking system, NFC tracking system, UV rays tracking system, and chat bot platforms are the inclusion of new technologies which can save the future of these luxury watches industries. Now keeping in mind all these fluctuations, we can say it with surety that the luxury watch industry mainly of Tag Heuer and Rolex is set to enjoy a secure future in these changing times and inclusion of modern technologies day by day. [4]

Conclusion on Watch companies

Looking into the intensity of this rivalry among these watch making industries, it’s reasonable to expect that Tag Heuer would not be going out of the competition in the coming years. Fortunately, Tag Heuer is part of the LVMH Group which gives financial backup to this company and gives this company an opportunity to invest in new technology products. This would allow Tag Heuer to use quality manufacturing resources in order to give their customers better quality products.

References of Watch companies

Bhasin, H. (2018, February 03). Marketing mix of Rolex – Rolex marketing mix. Retrieved from https://www.marketing91.com/marketing-mix-of-rolex/

Bhasin, H. (January, 12 2018). Marketing Mix Of TAG Heuer – TAG Heuer Marketing Mix. Retrieved from https://www.marketing91.com/marketing-mix-tag-heuer/

Nangia, A. (2018, February 12). Times are Changing: The Future of Luxury Watches. Retrieved from https://medium.com/musewearables/times-are-changing-the-future-of-luxury-watches-4a55db3cc02d

Tagheuer.com. (2018). WATCH MATERIALS. Retrieved from https://www.tagheuer.com/en/watch-materials