Spro watch is a new luxurious high quality watch product to be introduced in the market. The product line is represented by three products, including Classic Spro, Character Spro, and Metallic Spro watch. Being a new product, an intensive market strategy is important to ensure that the product performs exemplary in the market. The first company that the product will be introduced to is Rolex Company. Rolex is preferred because of the strong brand name and high performance in the watch industry. Intensive marketing strategy will be implemented for the company to ensure that it performs effectively. The marketing strategies to be implemented by the company include market penetration pricing, young generation customer targeting, intensive distribution, and production of high quality luxurious products. The market approach used by Spro Watches is expected to affect Rolex’s business strategy in terms of business strategy, profits, and revenue, as well as customer base. The generally expected impact of Spro watch on Rolex Company is increased profitability and customer base.
Every business wants to be successful in their operations. The approaches of success require a combination of efforts and activities to achieve the set goals and targets. Spro watch is a new product line for the watches, which focuses on production of classic and quality watches. The products are new in the market and, thus, require effective business strategies to ensure that it thrives in the market. Marketing is an important business activity that facilitates an effective entry for new businesses. Competitive advantages accorded by marketing include brand promotion, expansion of sales and customer base, and increase in the profit margins among others. The paper targets to offer a marketing outline for Spro watch and how it will be first introduced to Rolex Company. The marketing plan targets to ensure an effective market penetration for Spro watch and establishment of an extensive customer base in the competitive market.
Rolex Business Model
Rolex approach to business is simple as it is a non-profit organization with the mission to perpetuate Rolex. The company is, however, privately owned by the Hans Wilsdorf foundation (Rolex, 2018). The company business model is driven by the manufacture of high quality luxurious and expensive watches. The key innovations that drive the development of the products include quartz movement, automatic movements, and water resistant cases. The company is not driven by sale numbers. On the contrary, the company only intends to produce 1 million watches in a single year (Green, 2016). The ability of the company to remain profitable is benched on the establishment of the reputation of quality and the integration of innovation after innovation.
The major strength for Rolex is the strong brand name. The company is well-known for the quality of its products since they are positioned as value added watches and wrist wearable devices. The products are well-known for the differentiation strategy and investment in high quality products in the market. Features of the watches are expensive and serve as a symbol of social status and sophistication (Green, 2016). Other factors that contribute to the strength of the company are the global presence of the company as it sells its products in many countries in the world. The prime market of Rolex is mainly the United States of America, Europe, Asia, and Middle East. Most importantly, there is the emphasis on quality and, thus, takes details on all minor attributes of the products.
Rolex watches are structured to have a competitive advantage than the competitors, especially those using mechanical strategies of the watches. Firstly, the Rolex watches need no form of winding as they use quartz technology unlike the mechanical watch (Capetown Diamond, 2018). Secondly, the Rolex products are based on quartz technology, which is accurate. Quartz movement has a potential of becoming as thin as possible, thus offering an opportunity to produce sleek and streamlined watches in the market (Capetown Diamond, 2018). Quartz watches commonly do not need require a lot of maintenance as compared to mechanical watches. The quartz watches are commonly structured to offer high customer satisfaction as compared to other brands in the market.
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Major weaknesses of the Rolex Company concern the pricing strategy. The company uses prestige pricing strategy, which does not compare to the competitors. The affordability of the product is, thus, mainly limited for the high class people in the society. The second weakness of the Rolex Company is related to the niche segment (Heel, 2014). Its products only target high economically endowed customer targets and, thus, the majority of the customer base cannot afford the product. The strategy implies that the company mainly relies on the value rather than the revenue, which can be highly risky.
The opportunity that Rolex has is the change in the economic class of potential clients. In the today’s society, the majority of families have dual income, thereby helping to build the economic endowment of clients. Additionally, tastes and preferences of clients continue changing as clients show interest in premium brands since it is considered to be an effective strategy to show a higher social stratum for clients. The key threat of Rolex is the increased level of competition in the market, especially from international companies like Omega, Panera, and Tissot among others (Rolex, 2018).
The Rolex Company operates at the global level and, thus, faces a lot of competition. Key competitors of the company are Omega and Panerai. Although Rolex faces a lot of competition, it remains a market leader in the industry. The factor that accords Rolex a competitive advantage includes a strong strategic position for the company (Rolex, 2018). The second key strategy of the company is the use of the celebrity endorsement strategy. Most importantly, the company has established a strong brand name, which communicates the quality of products. The competitive advantage that the company enjoys plays a major role in ensuring the leading position for the company.
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Current Target Segments
The central target market includes rich buyers who seek to communicate class and given standards. Products are positioned to be a complement of class and for people who need to flaunt their riches (Rolex, 2018). The target markets are people between the age of 21 and 35 and older. Secondary market segments are people between the age of 18 and 24 who are gifted products by parents or grandparents. The primary markets are rich people and, thus, products are intended for the niche market. The targeting market strategy ensures specialization on unique and high quality products.
Current Marketing Strategy
The current marketing strategy for Rolex concerns the product. The quality of Rolex watches are characterized with a high level of accuracy and quality due to the design of the watch (Rolex, 2018). Watches measure time using a paper-thin piece of the synthetic quartz. The nature of the quartz material is structured such that it vibrates quickly, thus making it more accurate. The second promotional strategy is the distribution strategy for the company. The brand operates at the global capacity with availability of products in various shop outlets and online stores (Green, 2016). The company uses online platforms like Amazon, Aliexpress, and Walmart among others. The online retail availability is efficient to ensure that accessibility of the product is easy and at established at the global level.
Other marketing strategies applied by Rolex include the use of sales promotion and digital marketing. The presence of Rolex in digital platforms is exemplary, especially in the internet. If one tries to google the term ‘Rolex watches’, a wide range of feeds will be produced. Information concerning quality, availability, and prices of products is readily available. Such a marketing strategy is effective in ensuring brand knowledge and online retail presence of the product (Lamb, Hair, & McDaniel, 2017). Growth in the use of the internet and social media is an effective strategy to continue with the expansion of the customer base.
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New Product Development
Product Information and Visual Representation
The target product to be marketed is the Spro watch. The Spro watch design is developed in different shapes and sizes. Representative products include metallic Spro watch, Character Spro watch, and classic Spro watch. The classic design watches are designed to cover different shapes like hexagon, diamonds, and other unique designs. The objective of the Spro Watches brand is to offer quality luxurious watches at an affordable price. The affordability of the product is lowered to the extent that one can acquire a watch as low as $ 15 per piece. The picture below shows an example of various shapes, designs, and models under which the three products of Spro watches are to be produced. However, the company will maintain the Spro watch brand name as the signature of the company.
Targeting and Positioning Strategy
The target market for the Spro Watch design is the young generation. The choice of the target market is influenced by the market research that the majority of people below the age of 35 commonly spend an enormous amount of money on watches. The target market is inclusive of both male and female genders, which explains the need for different shapes and sizes. The character watches is aligned with interests of the target market. The young generation or the millennials show appreciation for simple, personalized, and high quality watches. Research shows the global sale of luxury watches is mainly contributed by the young generation as depicted in Asia and China (Beauloye, & Chang, 2018).
Designs of watches are based on digital integration with the representation of simplicity. In the current digital world, technology has played a key role in improving the quality of products. Key features that will be improved using technology include fitness tracking, face time video camera, skin sensors, and reminders. The objective is to increase the functionality of the watches. However, despite the sophistication of the phone, Spro focuses on facilitating a simple way to use the watch to ensure simplicity.
The product will initially be sold in America through the quartz movement. Local production and sales of the products intend to ensure close monitoring of the products’ performance. Most importantly, it is to suit the budget of operation as the limitation of capital is a major challenge. The positioning of the watch is structured to meet place utility. It is a reason why it will be placed at major shopping outlets like Walmart, Supermarket, and fashion stores among other areas that represent class in the United States of America. The objective is to ensure availability of the product at the places of convenience for clients. However, the product line will allow for online ordering and delivery so that online stores will play a major role to bridge the place utility for people not close to the stalls.
Marketing for the New Product
Various marketing strategies are implemented to ensure that Spro watches perform effectively in the market. The key marketing approach is the pricing strategy of the product. The pricing strategy uses pricing for penetration in the market with the intention of attracting buyers. The strategy is resourceful as it lowers the levels of competition and facilitates market expansion of the product in the market (Lamb et al., 2017). The second approach of marketing for the product is massive promotion. Promotional strategies to be used include the use of sales promotion and advertisement. The advertisement strategy will apply digital marketing through social media platforms like Facebook, Twitter, and Instagram among others. Digital marketing aligns to the target market as the young generation shows a growing interest in social networking. Social media will, thus, help to reach the target market adequately.
Distribution of the product is accorded high preference for the Spro watch to ensure that products are accessible to potential buyers. Distribution of the approach is intensive to help cover the market as much as possible. Intensive distribution is effective for durable products, which align with the nature of the Spro watches (Lamb et al., 2017). Availability of the product will also be through online retail stores, which play a major role in influencing a large market base and increasing the presence of three products in the market.
Sample Promotional Material for the New Product
The picture below shows a sample promotional material that will be placed on social media platforms and it shows the sales promotion for the product.
Personalize your watches to communicate to the world.
· Get a personalized high quality watch at an affordable price of as low as $ 25.
· Available in shopping outlets in US
· You can also place an order online through the company website Sproowatch.com of through online stores like Amazon, Wal-Mart, and Aliexpress.
Character Spro Watch
How the Product Improves the SWOT
Spro Watches offer the chance to facilitate strengths and opportunities and also partially contribute to some of the weaknesses and threats of the Rolex Company. The approach through which Spro Watch contributes to the strength of the company is by producing high-quality luxurious products. Rolex product market strategy targets production of high quality luxurious products in the market. The Spro watch aligns to the targets by offering high quality products through the influence of technology and quality products. Consistency in the production of quality products is an effective approach of ensuring a strong brand name for the company.
Rolex suffers a major weakness of the high pricing strategy. Spro watches address the challenge by ensuring the provision of high quality luxurious watches at an affordable price. The strategy ensures expansion of the target market as products are affordable by the middle class people in the United States of America. Rolex has been considered to only address a niche market, which is a major challenge for the company. Through Spro watch and the pricing strategy, the company will be able to attract an extensive customer base, thus influencing increased profit margins. Although Spro addresses weaknesses of the Rolex Company, to some extent it may be a liability to the company. Rolex establishes the quality of products through the pricing strategy (Green, 2016). Luxurious products are superior goods and require a high pricing strategy as a mark of quality (Lamb et al., 2017). The lowered pricing strategy for Spro watches may be a major challenge as it may lower the mark for quality goods for the company if poor marketing strategies are integrated.
The opportunity that Spro watches brings includes expansion of the target market. Spro watches target a customer base of the age group from 21 to 35 from the middle class and upper class. Rolex only accommodates a narrow market of the rich class. The approach to market expansion offers an advantage of increasing the customer base and the profit margins of the Rolex Company. It implies that in the future if the Spro watch product line decides to operate in the global market, it would stand a better chance to attract a broad base customer line. Rolex, thus, stands future potential of growth in the developing nations like China and Africa, which has high potential clients due to the rapid population growth rates in the region.
The threat of competition cannot be eliminated for the Rolex Company. However, Spro watches will play a major role in offering the company a competitive advantage. Classic Spro watch, metallic Spro watch, and character Spro watch increase the variety from which clients can choose. Furthermore, Spro will help capture a bigger customer base through satiation of needs and wants of the young generation.
How the Product Effectively Creates New Targets
The Rolex Company continues serving the niche market. The target market of the company includes mainly rich buyers. Spro watches serve as an effective strategy to facilitate expansion of the customer base through the expansion of the target market. New target markets include the young generation and millennials. The number of the millennials in the United States off America continues growing at a rapid rate. According to the Pew Research Centre, it is expected that the population of the millennials will be at around 74.3 million by 2050 (Fry, 2018). Such the growth rate is an indication of the increment in the potential market of the company. Rolex, thus, may consider a better strategy to increase the target market, revenues, and profits of the company. It is crucial to ensure an extensive expansion of the target market as it is an incentive strategy to profit expansion.
Other targets that stand a chance for expansion are profit margins of the company and revenues. Expansion of the market base facilitates the chance for Rolex to increase profit margins and revenues of the company. Every company strives to achieve growth and expansion (Lamb et al., 2017). If an opportunity presents to facilitate growth of the company, it is common that it is exploited. Spro Watches may offer the Rolex Company a chance to facilitate growth and expansion extensively. It is notable that Rolex already has a strong brand name and, thus, it would be easy to market the new product line of Spro watches and attract a significant target market.
New Product Impact on the Rolex Overall Strategy
Spro watch will have a major impact on the overall strategy of the Rolex Company. Key areas that the business impacts include structure of business for Rolex on pricing. Pricing is based on a high pricing strategy to signify the quality of products to represent a given class. Through Spro watch’s economic pricing strategy, the structure of the Rolex Company will be compromised. Expectation of the clients may not be met as it is expected that any product from the company should be pricey and of high quality. However, through effective communication and marketing strategy, it is easy to communicate the objective of Spro watches. The objective of the product is to offer high quality luxurious products at an affordable rate, especially for the millennials. The effective communication strategy helps to ensure that expectations of clients are adequately met, thereby ensuring high customer satisfaction.
The second impact of Spro on Rolex is on revenues and profitability of the company. Although Rolex is a highly profitable company, it stands a higher chance to extend the profits through the expansion of sales. In the global economy, the majority of the population belongs to the middle economic class. Additionally, the majority of the globe population includes the millennials. In the US, by 2036 the population of the millennials is projected to be 76.2 million (Fry, 2018). It would mean that Rolex stands a potential of more than 50 million clients. Such an expansion in the customer base would translate into increased sales, revenues, profit margins, and profitability of the company. Other strategies that would change include the target market and the business model of the company.