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Transcript of Rolex
Rolex has a vertical retail strategy and is sold in its own-branded stores, exclusive Rolex retailers, as well as through online retailers.Since Rolex has their retail stores, exclusive retail intermediaries, and online shopping intermediaries, they must also utilize a multi-level channel.
Satisfying Wants & Needs
The Golden Rule:
1. Familiarity breeds content
Their targeted demographic are mainly men aged 25 – 54.
Affluent, high-income households
Large disposable income and spending power
Consumers who pride themselves in their personal appearance.
The company does have products targeted for women and in recent times the company is attempting to move away from targeting financially strong men to more aspirational and successful individuals irrespective of sex.
Common among luxury brands
Selling products above common price point to let customers know that their product is in a different class.
High prices demonstrate sense of confidence
Discounts diminish the image of the brand
Customers are willing to pay prestigious prices
Short Channel Structure
Select group of channel participants
Exclusive jewelery stores + online
Conflicts & Power
What we recommend
Some unauthorized dealers offer discounts
Resource scarcity conflict
Most retailers are on perpetual back order
positive effect : positive efficiency
Their products lack perishability
Bulk and Weight
Not a large variable
Making distribution and handling costs low relative to the value of the product
Degree of Standardization
hand crafted but on a large scale
Products are fairly easy to use, but require a specific retailer for adjustments or repairs
Rolex has over a century of brand reputation
Rolex's most prominent product variable
Expertise allows them to exercise a substantial amount of power in the channel
High degree of flexibility in choosing channel structure
Large abundance of capital
Allowing Rolex to sell directly to consumers though its own branded stores
With over a century of success, there is a great deal of experience allowing Rolex have a large degree of control over the channel structure
Objectives & Strategies
Offers a high degree of control
There are always retailers interested in selling Rolex
Rolex only uses certified retailers
Replicated in their Products, Advertisements and Customer Service
Commitment to excellence
Limits the market of available consumers
short-term financial prospects
All certified dealers provide expert service
Tuning, Adjustment, Repair
Not a factor when choosing intermediaries
the company has been around since 1905
•Revamp marketing strategy to appeal to a younger audience
Founder: Hans Wilsdorf and Alfred Davis in England
Forbes: No. 57 on World's Most Powerful Global Brands
2,000 watches per day and 700,000 per year
$4.5 billion in 2012
Single Market Segment - concentration
Recession > Hong Kong, Singapore, Shanghai
700,000 to 800,000 annually
Counterfeiters produce X10
California = actors, athletes, wealthy (5%)
20s to 34 and 50s
"Collectors don't care what is going on inside the company. They just love Rolex," Aurel Bacs international co-head of Christie's watch department said from Geneva.
For every 10 looking at other brands they have 50 looking for Rolex.
Selecting Channel Members
Select reputable retail dealers
Wall Street Journal Advertising
Reflection of business
Trusted - trade secrets
Window displays expose
product to potential customers walking past their store