Seiko watch corporation - TIME LINE

Established
in 1892
1
st
Seiko
watch
launched
in 1923
Grand
Seiko
line
launched
in 1960
Leading
watch
brand in
Asian
markets
by 1970
International
spotlight via
event
association
from 1970
onwards
1
st
ever
quartz
wristwatch
launched in
1969
1
st

appearance
of Spring
Drive
watches in
1999
Limited
edition launch
of Seiko
Spring drive
in 2005
PROBLEM STATEMENT

Can Seiko position itself in luxury watch segment ahead of already established Swiss crafted
timepieces?
Whether to launch the new Spring Drive Technology watches under the Seiko brand-name or as
entirely separate brand?
In what way can Seiko attract the customers of the international market as against the traditional
luxury watch leaders?"
Would relying only on Spring Drive Technology suffice to reach their sales target?
Current SITUATION


95% of its luxury watches sold in Japan ; 5% in other Asian countries
Many budget-price models and failed to attract affluent watch
enthusiasts
Highest growth was seen in the price range that exceeded US$5,000
Consumers placed Seiko watches higher than mid-range brands like
Bulova and Citizen but lower than all the Swiss brands
Seikos largest markets by value : US, Japan, South East Asia, Europe
Current situation
50%
28%
20%
1%
1%
Luxury Watch Market (2003)
Asia
Europe
The
Americas
Oceania
Country Units Avg Unit Price (USD) Total Value (USD)
Japan 712 mn 21 15 bn
Switzerland 25 mn 360 9 bn
Export of Watches - 2004
Annual Retails
Sales
$150+ mn
Seiko TAG Heuer
(Swiss)
Rolex
(Swiss)
MSRP US$ 150-500 US$ 1500-5000 US$ 5000+
US Watch Market - 2005
Rank Unit Sales Dollar Sales
1 Citizen Rolex
2 Seiko Citizen
- Rolex (9th) Seiko (3rd)
US Watch Sales - 2005
Current Situation: Analysis
Leading brand in Asia and
Japan

Reliable but unremarkable
brand outside Asia

Strategy focused on
differentiation via
innovation and product
development
Distributors given autonomy
on marketing and distribution
strategies leading to varied
perceptions around the world
Price competition in
low-end watches led to
shifting labor intensive
operations to China
EXPLANATION USING TRICOMPONENT MODEL
Swiss Watch Brands
Cognition
Swiss origin watches were a luxury brand;
precision watches
Affect
Watches used mores as a Status symbol rather
than for its functionality
Conation
Automatically positive due to positive cognition
and affect
Seiko Watches
Cognition
Recognized as a reliable brand
Affect
More focus on precision and accuracy when
customers wanted luxury
Conation
The mismatch between what the customer
wants and gets doesnt lead to purchase
COGNITIVE DISSONANCE
Value demanded
Status enhancement
Value offered
Accuracy and reliability
at low price
Cognitive Dissonance
Product rejected
Product Evaluation
Low price (not premium)
Why not others buy?
WHAT LED TO THE CURRENT SITUATION? (CONTD.)

Seiko: Initially focus on the lower end of the segment
Selling at any price point, compromising on exclusivity.
Competition in lower end of the market on price

Shifting of units to china

Focus on technology and accuracy did not meet with the hedonic needs of the target
consumers.
Spring Drive Technology Mechantronics
Combination of mechanical & quartz technologies
200 patents, theoretical paper Swiss Society of chronometry
Elimination of escapement, natural & continuous motion of time
Accuracy of +/- 1sec per day
2 models exhibited @ 2005 Basel watch fair
Exclusive distribution technical know how, quality customer service
Watch of the year 2005 from TimeZone.com
EGO DEFENSIVE FUNCTION
Position Spring Drive watches as a luxury
which appeals to the ego and the ideal-self
of consumers
Create an image of refinement for Seiko
Spring Drive similar to that of Swiss brand
watches

Use of compelling and fairly repetitive
advertising to weaken established attitudes
towards Swiss watches
Introducing a brand ambassador with a
refined outlook and global appeal may lead
to positive response

KNOWLEDGE FUNCTION
Strengthening of consumers cognition towards Seiko
brand by informing them about Spring Drive
Informing consumers about Seikos legacy
Recognitions, Timekeeping, mechanical intricacy, patents
etc.
Replacing previously held notions about with favorable
opinion by exploiting consumer curiosity
Informational and product centric press conferences by
Seiko team can also be undertaken

CHANGING ATTITUDE - BASIC MOTIVATIONAL FUNCTION
CHANGING CONSUMER attitude advertisements
Mass media advertising
Instrumental in changing the brand beliefs of consumers towards Seiko and reducing cognitive dissonance
Highly compelling and frequent ads which appeal to consumers ideal self and weaken their resistance
Print media
Articles or ads of Seiko in popular magazines and widely published newspapers to build consumer cognition
Event Association
Official timekeeping in major sporting events (F1, Tennis, Golf etc.) and building long term relationships
Sponsorship to events with wide appeal to increase visibility and eliminate cognitive dissonance
Association with social causes which creates a positive affect towards brand Seiko among consumers
Direct marketing
Distributing highly informative catalogue describing the product and benefits to consumers (ego-defensive)

CHANGING CONSUMER attitude advertisements
(CONTD.)
Brand Ambassador
Global appeal required to align the positioning in the
domestic and international market
Likeable and credible ambassador can create a positive
affect leading to better attitude and conation


Internet
A growing trend and a strong platform to leverage
upon for increasing information availability
Sharing free and informative content can create more
consumer awareness about Spring drive and Seiko

S
C E
CHANGINg attitude altering components of
multiattribute model
Changing the relative evaluation of attributes
Need to make consumers value
technological advancement of watches
besides the mechanical intricacy
Overall, focus should be on refined
appeal and slightly on innovation for
additional differentiation

Changing beliefs about competitors brands
Not only we are the most refined and
luxurious, but also the most advanced and
innovative approach
Adding an Attribute
Spring Drive being a new high for
innovation can be leveraged to contrast with
Swiss brands (less innovative)
Focus must still be towards the luxury
and refinement appeal as the main
attraction

Changing Brand beliefs
Compelling advertisements and ensuring
high exposure and informative content for
consumers
CHANGINg consumer attitude Other measures


Changing the Overall brand rating
Inform target consumers about glory and legacy of the brand which emphasises brand achievements
The most advanced and luxurious brand, The leading watch manufacturer in Asia approach
Shifting to exclusive distribution for Spring Drive watches
Since dealing with high-end market, intensive distribution not required
Highly informed and passionate store staff and traditional outlook may be preferred
Focus on achieving best consumer experience and service
Modifying price points
Price could be significantly higher than the limited edition sales price of $3500 (due to great response)
Developing product line further
Depending on response, new variants at par or higher price points can be introduced later






recommendations
Launch Spring Drive technology as a separate brand but not under Grand Seiko
Change the attitude towards Seiko watches by positioning their watches as luxurious coupled with innovation and
technological advancement
Focus the high-end market instead of competing in middle to low-end segments
Sell only through exclusive stores to maintain uniformity in prices and customer buying experience
Choose retailers having good knowledge of the Spring Drive technology
Educate consumers about superiority of Seiko watches through print and electronic media
Try to have more association with international events like F1 and FIFA etc.