Swatchis a Swiss watchmaker which was founded in 1983 by Nicolas Hayek. The productline was developed as a response to Quartz crisis, in which Asian-made digitalwatches were competing against traditional European-made mechanical watches.
Swatchgroup embarked upon a policy of differentiating and repositioning its variousbrands, with a view to improving their complementarity and boosting thecompany’s ability to compete across all market segments. It made a specialeffort at differentiating the Group’s brands of the “affordable luxury”segment, Omega, Longines, and Rado. The aim was to reinforce each brand’s ownimage, thereby generating different yet complementary products targetingdifferent publics. Omega was selected as a luxury product designed to counterRolex and Cartier on world markets.
It went on to become Swatch Group’s mainbrand. Asfor Longines, it was repositioned in a less expensive segment and graphicallyredesigned as an object of elegance and classicism, which did not complete headon with the Group’s other products situated in the same product range. TheSwatch Group’s repositioning strategy was part of the overall radical changewhich took place in the luxury industry, with the strengthening of thedistinction between exclusive luxury and affordable luxury. This productdistinction made it possible to target different segments and pursue parallelstrategies based on exclusivism and the democratization of luxury.Before Swatchwas launched in 1983, Swiss watches were marked as a form of jewellery. Theywere serious, enduring, expensive and discreetly promoted. A costumer would buyonly one, and it would last a lifetime. Swatch changed all that by defining itswatches as playful fashion accessories.
They were fun, inexpensive, and showilypromoted to encourage impulse buying and expand the consumer base. Customerswould often purchase half a dozen in different colours and designs. Their price -$40 when the brand wasintroduced, expanded Swatch’s reach beyond its default category and into thefashion accessory category, where it was different customers and competitors.The way inwhich Swatch has repositioned itself, disrupted the watch category by creatinga fashion accessory subcategory. By doing so, Swatch not only opened upuncontested space for its own growth, but it allowed almost all the industrygiants, such a Timex and Citizen, as well as dozens of fashion brands,including Calvin Klein and Coach, to expand with their own lines of fashionaccessory watches. Fossil, for example, was launched a year after Swatchspecifically to exploit the new market space. Using this design thinking approachand implementing the various actions that were needed, Swatch has become thebest-selling wrist watch of all time.
Swatchsuccessfully repositioned itself with an aggressive marketing campaign andunique design thinking approach and gained instant popularity in its homemarket of Switzerland. Compared to conventional watches, a Swatch was 80%cheaper to produce.Thiscombination of marketing and manufacturing expertise restored Switzerland as amajor player in the world wristwatch market.