Rolex brand audit

Brand Audit - ROLEX

Rolex has remained one of the most recognized and sought-after luxury brands in the world. In 2017, it was in the BrandZ Top 100 Most Valuable Global Brands. A thorough audit can help pinpoint opportunities and challenges for Rolex, whose brand equity has been historically strong, as much is at stake.

Background

History—Rolex was founded in 1905 by a German named Hans Wilsdorf and his brother-in-law, William Davis, as a watch-making company, Wilsdorf & Davis, with headquarters in London, England. In 1912, Rolex moved its headquarters to Geneva, Switzerland, and started working on improving the reliability of its watches. Twelve years later, Wilsdorf developed and patented the now famous Oyster waterproof case and screw crown. Over the years, Rolex has pushed innovation in watches to new levels. For decades, Swiss-made watches owned the middle and high- end markets, remaining virtually unrivaled until the invention of the quartz watch in 1969. In order to survive, Rolex was forced to move into the high-end market exclusively—leaving the middle to the quartz people—and create a strategy to defend and build its position there.

Private Ownership—Rolex is a privately owned company and has been controlled by only three people in its 100-year history. By staying an independent entity, Rolex has remained focused on its core business.

Brand Portfolio—Rolex includes three family brands of wristwatches, called “collections”; the Oyster Perpetual Collection, the Professional Collection, and the Cellini Collection. Rolex owns a separate “fighter” brand called Tudor, developed in 1946 to stave off competition from mid-range watches such as TAG Heuer, Citizen, and Rado.

Brand Inventory

Rolex not only produces extremely high-quality timepieces but also tightly controls how its watches are sold, ensuring high demand and premium prices. Its sophisticated marketing strategy has created an exclusive and premium brand that many aspire to own.

Brand Elements—Rolex’s most distinguishable brand element is its Crown logo. Many Rolex watches also have a distinct look, including a big round face and wide wrist band.

Product—Throughout the years, Rolex timepieces have maintained the high quality, durability, and prestige on which the company built its name. The company does not license its brand or produce any other product besides watches. Its product portfolio is clear, concise, and focused.

Pricing—By limiting production to approximately 2,000 watches a day, Rolex keeps consumer demand high and prices at a premium. Scarcity also helps positively influence the resale value of Rolex watches.

Distribution—Rolex carefully monitors how its timepieces are sold, distributing them only through its approximately 60,000 “Official Rolex Dealers” worldwide. In addition, a large secondary market exists for Rolex, both through online auction sites and at live auctions.

Communications—Rolex associates itself with “ambassadors”—established artists, top athletes, rugged adventurers, and daring explorers—to help create its imagery. Rolex also sponsors various

sports and cultural events as well as philanthropy programs to help align with targeted demographics as well as create positive associations in consumers’ minds.

Advertising—One of the company’s largest expenditures is for magazine advertising. Rolex’s print ads are often simple and austere, usually featuring one of its many brand ambassadors or a close- up photo of one of its watches with the tagline “Rolex—A Crown for Every Achievement.” Rolex does not advertise extensively on television, but does sponsor some events that are televised.

Ambassadors—Rolex’s celebrity endorsers are continuously added and dropped depending on their performance. These ambassadors fall into four categories: athletes, artists, explorers, and yachtsmen.

Sports and Culture—Rolex sponsors a variety of elite athletic and cultural events to reinforce the same messages, values, and associations as it does through its ambassador endorsements. These include a quest for excellence, pursuit of perfection, teamwork, and ruggedness.

Philanthropy—Rolex gives back through three established philanthropic programs, viz. the Awards for Enterprise program, the Young Laureates Programme, and the Rolex Mentor and Protégé Arts Initiative.

Brand Exploratory

Consumer 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. Some positive consumer brand associations for Rolex might be “sophisticated,” “prestigious,” “exclusive,” “powerful,” “elegant,” “high quality.” Some negative brand associations that some consumers may link to the brand, however, could include “flashy” or “snobby.” While the brand and product line seem to resonate well with older, wealthy individuals, Rolex struggles somewhat to connect with younger consumers.

Brand Resonance Pyramid—The functional and emotional benefits Rolex strives to deliver are in harmony with consumers’ imagery and feelings about the brand. Rolex also enjoys the highest brand awareness of any luxury brand as well as high repeat purchase rates and high customer loyalty. Rolex has successfully focused on both the superior product attributes and the imagery associated with owning and wearing a Rolex.

Competitive Analysis—Through its pricing and distribution strategies, Rolex has positioned itself as a high-end luxury watch brand. On the lower end of the spectrum, it competes with companies such as TAG Heuer and OMEGA, and on the higher end with brands such as Patek Philippe, maker of the world’s most expensive wristwatch.

TAG Heuer—A leader in the luxury watch industry, the Swiss firm TAG Heuer distinguishes itself by focusing on extreme chronograph precision in its watches, and on sports and auto-racing sponsorship in its advertising. TAG ’s image and positioning is inextricably connected to chronograph precision. TAG Heuer uses officially licensed retailers to sell its watches both in stores and online. The watchmaker generates brand awareness through brand ambassadors and sponsoring sporting events and advertises extensively in magazines.

OMEGA—OMEGA has long prided itself on the precision of its watches and timing devices. OMEGA was the time equipment selected for the 1936 Winter Olympics, which saw the first use of synchronized chronographs. OMEGA employs ambassadors to generate brand awareness, including athletes Michael Phelps, Alexander Popov, Ernie Els, and race car driver Michael

Schumacher as well as Hollywood stars Nicole Kidman and Cindy Crawford. OMEGA watches are offered in both women’s and men’s styles in four different collections: Constellation, Seamaster, Speedmaster, and De Ville. Prices vary greatly even within individual collections.

Patek Philippe— The innovator of many technologies found in today’s high-end watch, Patek Philippe represents the absolute pinnacle of luxury timepieces. In particular, the firm prides itself on creating many of the world’s most complicated watches through innovations with split-second chronograph and perpetual date technology. Patek Philippe does not rely on event sponsorship or brand ambassadors to generate name recognition. Patek Philippe evaluates every authorized dealer’s storefront to ensure that it meets the watchmaker’s quality standards. It also separates itself from other watchmakers on price, with its least expensive noncustomized watch retailing.

Strategic Recommendations

Positioning

Points-of-Parity—Rolex is similar to other watchmakers in the high-end luxury watch market on several levels. All pride themselves on their attention to detail and ongoing innovation in the watch industry.

Points-of-Difference—Rolex separates itself from the competition in several ways. Through careful selection of event sponsorships and brand ambassadors, Rolex has cut through the clutter, resonated with consumers around the world, and maintained an air of prestige.

Brand Mantra—Rolex has been extremely successful in building a global name through clever marketing and communications, without compromising the integrity of the brand.

Tactical Recommendations

The Rolex brand audit proved that Rolex is a very strong brand with significant brand equity. It also identified a few opportunities and challenges:

Leverage the Company’s Independent, Continuous Heritage and Focus

• Rolex is the largest and most successful watch company in the world. As a result, many consumers don’t realize it is privately owned and competes against major conglomerates. While being privately owned is a good thing for many reasons, it also brings up several challenges.

• Rolex may want to leverage and promote the fact that in some ways it has to work harder to succeed.

Leverage the Company’s Elite Craftsmanship and Innovation

• Research from the Luxury Institute group suggested that consumers do not consider Rolex the top brand in quality and exclusivity.

Connect with the Female Consumer

• Women are more and more interested in purchasing unisex mechanical watches rather than feminine-styled watches. This is a great opportunity for Rolex, whose watches are primarily masculine in design.

• Rolex may want to tweak its female ambassador list to coincide with a more unisex product line.

Attack the Online Counterfeit Industry

• To maintain its limited distribution, Rolex does not authorize any of its watches to be sold on the Internet. In order to combat the online sale of counterfeits; however, Rolex might consider building an exclusive online store, or an exclusive distribution site to which all official e-retailers must link. In fact, Rolex dedicates extensive resources to fight the illegal use of the brand, including sponsoring the International Anti-Counterfeiting Coalition and suing companies that allow the sale of counterfeit Rolexes.

Use Marketing to Reach Younger Consumers

• Research has shown that younger consumers do not value watches the same way older generations did.

Communicate Long-Term Value

• Rolex competes for a share of the luxury buyer’s wallet with a host of other types of goods, such as clothes, shoes, and handbags. Many are less durable over time than a Rolex watch and are susceptible to falling out of fashion.

• Swiss luxury watch competitor Patek Philippe used print advertising to communicate the heirloom quality of its watches. Rolex could pursue a similar approach.

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