LUXURY MANAGEMENT ROLEX VS.

CARTIER WATCHES

INTRODUCTION
HISTORICAL BACKGROUND
In the 1970s, after around 1000 companies and 55000 place of work disappeared, many
analysts left the Swiss watchmaking industry for dead as it missed out the electrical
revolution and was facing tough competition from cheaper Japanese watches. Today, the
watch industry is Switzerlands third largest exporter after the machine and the chemical
industry. Switzerlands production of finished watches amounts to around 26 million units
for a value of 10 CHF billions. The average export price for Swiss watches is 378 CHF versus 7
CHF for Hong Kong and 61 CHF for French watches. Where does this huge price difference
come from? Switzerland possesses close to 100% of the luxury market value (which
represents 48% of the watch market value). Export of watches including precious metal
represents only 5% in units, but 46% in value.
But watches are not only important in terms of revenues for Switzerland; it is also an
important part of the Helvetic tradition. When kids get their first watch, it is usually a Flik
Flak (Swatch Group). Then, most of the teenagers (and adults as well) go through what one
could call a Swatch mania. Colorful, cheap and fancy: everyone has at least one Swatch.
Then, as adult, most of the people possess one more luxury watches. Nevertheless,
behaviours changed a lot in the past years. Watches were typical present to offer at certain
stage of the life (20th birthday, graduation, wedding, etc.. One would wear the same watch
his entire life.
Nowadays, most of the people own more than one watch and like to consider it as a fashion
accessory they can change as they like and that matches their cloths or envy of the moment.

LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

OBJECTIVE OF THE STUDY

Following are the objectives of the study:

To undertake a comparative study of the luxury brands for watch Rolex and Cartier

To understand the contrast in the business processes followed by the brands

To study the difference in the target market for each brand and understand what
market each brand caters to their customers

To find the positioning each brand holds in the market and contrast the difference in
the positioning

To highlight the differentiating factor in terms of the product the brands offer

LIMITATIONS
While completing the research for the comparative we came across a few limitations

The data available was online and there was no primary data to be analysed and
hence the data can be manipulated

LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

REVIEW OF RELATED LITERATURE (AND ANALYSIS OF PREVIOUS

RESEARCH)
DEFINITION AND PRICE SEGMENTATION
This study concerns the Swiss luxury watchmaking industry. In order to clarify what luxury
means and includes in term of price, a classification taken from the Pictet report The Watch
Industry, What makes it tick ?, November 2003, will be used. The following table
distinguishes four different segments which are exclusive luxury, accessible luxury, midprice and low price. Any time this report refers to luxury watch industry, it includes both
the exclusive and the accessible luxury segment. What is more, as the Swiss luxury
watchmaking industry represents close to 100% of the luxury watch market value, in this
study, the expression Swiss luxury watchmaking or luxury watchmaking can be
considered as equivalent.

Table 1 Price segmentation in the watch market (factory gate) (Source: Pictet)
Conceptually, luxury, from Latin luxus, excess, is defined1 as:
the comforts and beauties of life beyond what is really necessary
The use of the best and most costly food, clothes, houses, furniture and amusements
A thing that one enjoys, usually something choice and costly
A thing that is pleasant but not necessary
Any form or means of enjoyment or self-gratification

LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

PERCEPTUAL MAPPING OF LUXURY BRANDS

Figure shows a chart displaying the most important brands in the watch industry. They are
grouped into five different profiles resulting from their consumer image. The categories are
the following:
Connoisseurs/specialists
Sport
Fashion
Lifestyle
Jewellery
What is more, the chart is divided into four regions using three criteria: the price (low price
accessible luxury exclusive luxury), the type of movement (mechanical and complication
versus quartz) and the technology grade (technical content versus design content).

The brands that will be studied in more details have the following positioning

Rolex is seen as a jewellery and Cartier is positioned in the jewellery segment.

LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

BUSINESS PROCESS
A series of logically related activities or tasks (such as planning, production, or sales)
performed together to produce a defined set of results.
A business process is a collection of linked tasks which find their end in the delivery of a
service or product to a client. A business process has also been defined as a set of activities
and tasks that, once completed, will accomplish an organizational goal. The process must
involve clearly defined inputs and a single output. These inputs are made up of all of the
factors which contribute (either directly or indirectly) to the added value of a service or
product. These factors can be categorized into management processes, operational
processes and supporting processes.
A process requires a series of actions to achieve a certain objective. BPM processes are
continuous but also allow for adhoc action. Processes can be simple or complex based on
number of steps, number of systems involved etc. They can be short or long running. Longer
processes tend to have multiple dependencies and a greater documentation requirement.
Profile
Rolex has the opportunity to reinvest the benefits in the company to improve distribution
and after-sale services and to increase research and development. What is more, they are
not pressured to follow the general trends of the industry in order to content shareholders.
As an example, Rolex is the only big player that is not following a multi brand strategy.
It is not all, Rolex also distinct itself from the others because, as we already mentioned, it is
one of the last group that is not pursuing a multi brand portfolio. In fact, it has a long
tradition of one brand and one product that has always, nearly been respected. The only
exception to this rule is the Tudor brand, Rolexs second brand, positioned as a cheaper
Rolex.
Cartier is a company of the Richemont Compagnie Financire Group the second worldwide
luxury group and the first worldwide luxury watchmaking group. The group depends heavily
on the brand that realizes approximately half of Richemont Groups turnover and 60% of the
operational benefit. Their estimated turnover is 900 millions euros with an estimated
average volume of 350000 watches a year. Cartiers activities consist of watches (55%),
jewelry (35%) and others (leather products, perfumes, pens, eyewear and lighters) (10%).
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LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

Brand Identity

Rolex

Cartier

LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

Products
Rolex as an international brand is much easier to find than Cartier at times. When it comes
to production of watches, Rolex beats any other company by a landslide. Rolex is the worlds
top watch producer, meaning that there are more Rolex watches available on the market
than any other watch brand. Rolex and Cartier tend to be neck and neck in pricing, with
Cartier watches being slightly more expensive than Rolex watches.
Rolex watches tend to be sturdy and have a more practical feel whereas Cartier is known for
more whimsical feel and design. Both brands have a number of different lines, allowing
watch buyers to purchase a design that works for them. As Cartier is also a designer of fine,
high end jewelry, you are likely to see more inspiration from jewelry designs in their
watches.
Rolex produces only round watches since more than 40 years. The brand encompasses only
two collections: the Oyster that represents around 140 models and 80% of the sales and the
Cellini. The design has always been very conservative and the only radical innovation was
brought in 2000 with the launch of a colorful Oyster Daytona.
The collection of Cartier is very broad. In includes the following models:
Santos is designed in 1904 by Louis Cartier for its Brazilian aviator friend, Alberto SantosDumont.
Tonneau designed in 1906
Tortue, an extension of the Tonneau, launched in 1912.
Baignoire launched in 1913
Tanks first design is done in 1917; Louis Cartier was fascinated by the armored cars and
decided to design a watch inspired from them. The tank is available in five collections: Louis
Cartier, Franaise, Amricaine and Divan. It is the most successful collection of Cartier
representing one third of the turnover.
Panthere launched in 1983
Pasha launched in 1985. It is the typical men watch that women love to wear.
Ligne 21 created in 1986
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LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

Roadster launched in 2002

Declaration launched in 2003 and is elected watch of the year the same year by the
Swiss magazine Montres Passion / Uhrenwelt. It is the first time that a women watch with
a quartz movement won this distinction.
On top of this collection, Cartier has an entry level line of jewellery, watches, perfumes, etc
known as the Must de Cartier. This line is an important part of Cartiers success and gives
an opportunity to, once in a lifetime, buy a Cartier good.
Production Process
The brand works by dividing specific functions between four sites across Switzerland that
make up design, manufacture, assembly and the testing of each timepiece that bears the
signature crown.
From development to post-sale servicing, several reliability tests, metal forming, alloy
quality control, stamping, dial construction, gem-setting, assembly, control and other
nuanced processes are continuously at work Time-keeping is an exact art and science today
and every watch brand with heft has a historic legacy to match. In a space where there is no
room for goods, only greats, Rolex occupies central space. In Indian society, there's a certain
sentiment attached to the brand. A Rolex on your wrist signifies the attainment of success, a
sign that you have finally arrived, and rightly so. At awatch fair an old gentleman was trying
to place Rolex in the watch heirarchy and made a telling statement on the brand's
perception in India. He said, "Rolex is like Mercedes. It's been around forever and is the
preferred choice of those who have both money and taste and want something reliable."
While maintaining its age-old identity, Rolex wants to stay relevant and be seen as a brand
that is keeping up with the times.
The infrastructure installed within the gleaming glass facade of the units in Switzerland is
uber sophisticated. Equipped with an entirely automated transfer system-a result of inhouse engineering-it functions faultlessly as a maze for transporting, segregating and
storing, sans any glitch or hiccup. And while the makers are busy churning out a beautiful
timepiece, a team of scientists in the Central Laboratory study every material used in the
assembly. Using powerful equipment such as a scanning electron microscope, they keep a

LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

constant tab on the quality of alloys created. Even the slightest imperfection is resolved by
the collective genius of their team.
However, it is the integration the brand employs between the use of automated advancetechnology and hand-work that elevates it. One of the last stages in the production of a
Rolex watch consists of approximately 10 operations performed entirely by hand in a
controlled environment. Once assembled, the watch undergoes a series of checks carried
out using highly sophisticated, fully robotised equipment. It is perhaps a sign of things to
come as an automated robotic arm with a Rolex fastened around its wrist manoeuvred
awkwardly in a mechanical manner. I was told it would continue to do do to test the piece's
durability for several hours till it satisfied the benchmark set by its makers.
A watch is so much more than the sum of its parts. A Rolex on your wrist is a piece of the
brand's personality, which is why it's important to understand what makes it what it is. For
over a century, Rolex has symbolised prestige and performance. While the process has
evolved from being the domain of a single craftsman to the collaboration of skilled
specialists, the sheer volume of timepieces being created, hasn't compromised on quality.
Internal Environment
At Rolex, men and women who service and produce these machines are considered artists,
who blend both science and design to create these master pieces of art. They understand
the interplay between all the materials used, and combine all the thoughts needed to create
an object that is a reflection of care and intent. At the end, they believe that it is a piece of
living art that is greater than the sum of its parts. Furthermore, and this is the heart of
Rolex, people who work on watches are very passionate, have incredible ideas and are
always excited to produce such products. Hence, when you are caring, passionate and
enjoying what you are doing, you will do it with the utmost attention and care. And that is
the secret at Rolex when producing their luxurious watches. It is like producing a thing with
pleasant feelings and creating another soul.
From another angle, the workshops where the watchmakers work are very much organized.
Managers say that the person is expected to work in a library like atmosphere (i.e. clean and
quite) that will enable the watchmaker to focus and to be comfortable. I believe,
watchmaking is not for everybody, it requires talent, time management, commitment and

LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

patience. What adds to all of this as well is dealing with very delicate and expensive
products. Not to mention, adding the jewelry further pressurize the watchmaker.
At Rolex they will only bring people who believe that working as a watchmaker is the right
career at the right time.
Major Market Concentrations
The Chinese luxury market is not dead: Interest in all luxury watch categories continues to
escalate, led by Omega, Cartier and Rolex.
Though sales at home may have declined, Chinese thirst for luxury watches is not showing
any signs of slowdown, according to exclusive data shared for the first time by Baidu,
Chinas leading search engine, for Digital Luxury Group. According to Baidu Vice President,
Liang Zeng, Watches are part of the fastest growing luxury segments in China right now.
Bernard Formas, who has headed the luxury group since 2002, suggested that the firm
would maintain its focus on emerging markets to offset the potential effects of economic
volatility elsewhere.
Cartier has already reacted to the 2008-09 global economic downturn by launching a lowerpriced range of jewellery, reflecting customers tighter budgets.
We have always prepared the brand for the worst, even when things have been going
well, Formas said. I dont talk [growth] figures, because there are so many things that can
happen I dont know what level we will be at during 2012.
According to Q4 2011 results from Richemont, the owner of Cartier, the groups sales rose
24% year-on-year across the three-month period. This included a 36% rise in Asia-Pacific,
which offset an increase of 15% for Europe. Japan, whose economy is still recovering from
the effects of the tsunami and nuclear crisis of march 2011, was up by just 10%.
Formas suggested that China in particular would be an area of future focus for Cartier.
Figures cited by the Wall Street Journal suggested that overall Swiss watch exports to the
worlds most populous nation were up 49% in 2011.
The potential in China is so important, Fournas said. China is our third- or fourth-biggest
market, but the Chinese nationality is number one, because of the customers who buy
products when they travel.
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LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

He added: We have a fantastic geographical spread. We are like an aircraft with five
engines Europe, Middle East, the Americas, Japan and the rest of Asia.
Fournas suggested that fluctuations in commodity prices and currencies could impact on the
business in 2012.
The poor performance of the euro due mainly to the eurozone debt crisis of recent
months has already led to price increases. Cartier is particularly vulnerable to currency
moves as it makes its watches in Switzerland, where the franc has been strong recently, and
much of its jewellery in France.
Overall, we have managed to bring in some price increases on the watches: we had
increases of 10% last year in several markets, Fournas added. It all depends on what the
euro is doing.
Differentiation Strategy
The idea is to offer a product that is perceived as unique by the customer. The uniqueness
can rely in the design Techno Marine, the brand who dares to mix plastic and diamond-,
the brand image -Rolex and achievement, Cartier and art.
A differentiation strategy is not an easy task: it relies heavily on intangible values and
therefore it is slow to create the brand image and slow to penetrate new markets. Besides,
the brands have a very sensitive relationship with the market: customers are usually
knowledgeable about the brand and identify themselves with it, therefore, companies have
to be careful to nurture coherently the image of the brand and not disappoint them with
mixed messages. In fact this is clearly showing a lack of innovation in marketing campaigns.
No brand really dares to make something really different, imaginative or original and,
therefore, strategies on the market are already much consolidated and look very alike. The
implementation of the strategy is complex and difficult; the brand has not only to define
intangible values but also to explain them and prove that they are different and apart from
their competitors. But once the customer knows and understands the spirit of the product,
the company can expect high margins on its product, a high degree of loyalty and lower
sensitivity to price. Uniqueness can also protect from substitute because the more the
product seems unique, the more it seems difficult to find close substitute

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LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

Advertising and Promotion

Rolex is using famous personalities for its campaign, but the concept is different from the
one we just described. In fact, the Rolex brand name is already so famous that their
campaigns main goal is not to gain notoriety but to fully express and develop furthermore
the identity of the brand. Perfectly in line with the idea of a long term strategy, Rolex uses a
selective marketing strategy which goal is to target very directly the desired customer. They
do not use artists that are hot in the moment to have periodically picks of sales linked to
the use of the superstar. On the contrary, the chosen celebrities have a sustainable
character. In fact, Rolex ambassadors are famous only in niche activities like golf,
equestrian and sailing just to name a few and are unlikely to provoke demonstration
because most of the time they are unknown by the general public. Moreover, Rolex is
diversifying its basic risk of having a bad ambassador away thanks to numerous
outstanding ambassadors and exceptional events under contract.
The idea is not to transfer the fame from a super star (pop singer, actor, top model, etc) to
the brand quickly but to choose people who have achieved something and that are or will
be a part of history, so that Rolex can join them writing it. The main advantage when using
the celebrity of a super star ambassador to make its own product famous is that the results
are very quick; the product becomes well-known very fast

Backward Vertical Integration

Anticipating the battle for the watch components, it is a couple of years now that Rolex is
following a backward vertical integration strategy in order to be able to ensure a total
independence from competitor groups. This pattern shows through the numerous takeovers
of suppliers that took place lately. Among them: the bracelet firm Gay Frres SA in 1999, the
dial firm Beyeler in 2000 and the crone firm Boninchi SA in 2001.
What is more, Rolex was using until 1999 a movement designed by Zenith, El Primero22, for
all the Oyster Daytona models. After Zeniths takeover by LVMH, Rolex started to design its
own movements in order to avoid having to rely on its main competitors. Finally, Rolex has
always been two separated entities: Rolex SA (Geneva) the company that is owned by the
Wilsdorf foundation and Rolex Bienne, which produced movements exclusively for Rolex SA
Geneva. In 2004, in line with its strategy of vertical integration, Rolex Geneva has decided to
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LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

buy Rolex Bienne to ensure its provisioning of movements. The two companies were linked,
since around 1920 by a tacit deal: Rolex Geneva was buying mainly its movements at Rolex
Bienne and they will sell their movement exclusively at Rolex Geneva.

Distribution Channels
Rolex does not supply its product to be sold in any store in particular. Only the classiest of
shops may bear the Rolex name, these specialty stores that carry our product usually
include jewelry, clothing, and clockwork stores.

We do not supply our product to

department stores, supermarkets or mass merchandisers as it would hurt our brand equity.
There are stores located all across the world that carry our product including such countries
as: Switzerland, Argentina, China, Italy, Mexico, Taiwan, The United Kingdom, etc. If you
wished to purchase our product you cannot simply walk into any store that sells accessories,
you must go out of your way to locate a specific store. We do not provide our product to be
distributed online through the internet, we believe in a face-to-face approach to selling and
as well it ensures that the customer is aware they are purchasing a true Rolex. There are
many people who replicate our product and the online business would be too risky to
undergo operations in. Rolex chooses not to sell directly to the customer to ensure the
buying experience and satisfaction are maximized.
We produce and distribute watches all around the world. We have the best suppliers that
make available only the finest raw materials that are to be developed into watches. At the
inventory management level we estimate and determine how many watches to make, as
the watches are easily stored there are not many inventory costs involved in the overhead
cost. We produce and sell watches year round so the storage needed is minimal. Our
channel of distribution would be through merchant intermediaries, more specifically, select
retailers that will distribute our product directly to the customer. There has been much
integration of physical distribution functions amongst the retailers such as communication
and transaction functions. Our retailers provide for us product information not available on
our website as well as price quotes; these intermediaries also perform a selling function for
our product. As well we only produce a small amount of watches annually as the demand
for our product is low as well as it keeps our exclusivity from depleting, there is no breaking
bulk or accumulating bulk. We do not take orders from customers so there is no order
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LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

processing; however there are regions with a higher demand for our product so we aim to
fill that demand. We do receive orders from stores however and certain requests can be
made from the customer through the retailer.

Our watches are of course put into

protective packaging before being transported to the retailers to ensure quality. Once
packaged and ready to go we at Rolex employ multiple outbound transportation strategies
such as planes, trucks, boats and even locomotive. Our company does not utilize the use of
many facilitating functions; we do not provide an extensive extra service through customer
care. We believe in the durability and sturdiness of our product and feel the maintenance
job to be the business of someone else. There is a slight risk taking function that our
retailers undergo as the demand for our product is minimal, however our product and brand
name has stood the test of time and proved dominant in the market, minimizing risk.
We do not allow our product to be sold electronically. Although there may be demand for
the watches to be sold because of the boom of the online stores we feel it is in the best
interest of our brand name and equity to remain an offline distributor. This easily prevents
the sale of cheap replicas ensuring the customers purchase of our product was a legitimate
one.
The distribution paradox addresses the fundamental contradiction between luxury and
marketing:
Luxury brands also strive to grow their business, but increasing sales volumes reduces rarity,
therewith also the luxury image and as a consequence also the sales numbers, which means
that the successes of luxury brands jeopardize their future successes.
This phenomenon is exemplified by Cartier`s experience with their accessories "Les Must de
Cartier." This product line developed to become a bestseller, which started to damage the
brand image and therewith forced Cartier to restrain these offerings (Catry 2003, p. 10).
Thus, the challenge for luxury brands is to increase their success and still preserve the
impression of exclusivity
The distribution paradox also entails additional luxury-specific marketing strategies. Because
of the limitations in pushing sales numbers, it is recommended that the potential of profit
maximization is exhausted, for instance by forward and backward integration. Forward
integration includes developing own retail outlets and backward integration covers
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LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

increasing control over the manufacturing process, for example by exchanging licenses with
in-house manufacturing. Another advantage of integration is the increased control over
product quality and brand image.
Cartier has an impressive distribution strategy. With its presence across the globe, it is
planning to enter Middle East and U.S. markets to compete with its counterparts. Cartier is
very strong in China market, but then the brand does not want to be over dependent on a
single segment.

ANALYSIS OF DATA
WORLD WATCH REPORT 2014

Global demand was fueled once again by BRIC markets with the highest year-to-year
increases in: China (+59.4%), Russia (+20.4%) and India (+12.0%).
Historically established and mature markets such as Germany (-9.2%), the United States (7.9%), and Japan (-5.5%), experience single digit demand decline, whilst Italy (+8.8%) and
the United Kingdom (+3.1%) see growth in interest versus 2012.
The Brazilian market fails to deliver amid high expectations (-2.9%), ahead of an important
year for luxury watch brands in the market (World Cup and Olympic Games in 2016).
Despite growing international attention and key events driving important brand related
investments, the market predicted to become the next big thing, fails to deliver on its
promises.

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LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

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LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

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LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

PRODUCT DIFFERENTIATION
Rolex
Rolex uses product differentiation strategy based on product durability, which is a measure
of the expected age of the product operating under normal conditions and / or weight.
According to most users, durability is very important
In case of Rolex they pursue a differentiation strategy, Rolex watches are handmade
precious metals like gold or platinum and stainless steel and are subject to strenuous tests
of quality and reliability. The firms reputation enables it to charge thousands of dollars for
its watches
Cartier
For Cartier, product differentiation is based on a varied array of tangible characteristics and
intangible values associated with it, and for which customers are ready to pay more.
First is the quality of materials used in manufacturing their products. Their watch
mechanisms are made from the best steel materials, while it is common to see the finest
products made with cases in precious metals like white gold, yellow gold, and rose gold
among other precious metals. Some are adorned in the best-graded diamonds or other gem
stones, and this a key reason why Cartier watches are among the favourite watches of the
rich and famous.
Secondly, the company has uniquely designed watches available for men and women.
Anybody looking for the finest timepiece always has confidence that this is exactly what you
will get from Cartier. Moreover, they give absolute attention to detail while producing their
watches and jewellery to ensure that the end product is of the best possible quality that it is
possible to get.
Cartier is also a visionary company, it is ahead of others in making stylistic watches. It also
created the first wristwatch, added a new dimension in watch designing as the rectangular
dial started from them. This makes their watches different not only because of the quality
and style, but also because they produce with an innovative technology

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LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

POSITIONING
Rolex
According to Forbes, Rolex is one of the top 100 most recognized and most powerful brands
in the world. The name Rolex is immediately recognized by people all over the world, even
those un-affiliated with the luxury watch industry. Rolex can credit this brand recognition to
its work on its brand image and positioning.
People both inside and outside of the luxury watch world recognize the name Rolex.
People associate the brand name with success and luxury and imagine Rolex wearers to live
a lavish lifestyle. A Rolex watch can be used as a status symbol, showing people that the
wearer has achieved a level of success and stability, which have allowed them the means to
purchase a Rolex watch.
This strong and positive brand image can largely be attributed to the people that are seen
wearing Rolex watches. Today, many celebrities and athletes are seen wearing Rolex
watches. This idea started in 1927 when Hans Wilsdorf had Mercedes Gleitze wear a Rolex
Oyster around her neck as she attempted to become the first woman to swim across the
English Channel. The Rolex Oyster was the worlds first water proof wrist watch and this was
the perfect way to prove its functionality because people all over the world were following
the story of Mercedes Gleitze.
This brand positioning, started by Wilsdorf in 1927, ensures that Rolex watches are
constantly out in the face of the public, as well as being associated with the wealthy and
successful. When those unfamiliar with the luxury watch industry see their favorite athlete
or celebrity wearing a Rolex watch, it creates interest and curiosity in the piece. Rolex
watches are then perceived to be the watch of choice for the rich, successful, and famous,
giving the brand an image of superiority.
Rolex positions itself as a tribute to excellence, an object of passion and a symbol for all
times. The Rolex positions itself on both functional and emotional grounds. Initially, it was
self-winding, water-resistant and durable stainless steel watch but with time it has
incorporated the sporty style and sophistication. Now Rolex is a status symbol and the token
of success on the wrist of an individual.

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LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

Cartier
Cartier is Luxury Dailys 2012 Luxury Marketer of the Year for the use of long-term,
multichannel campaigns that keep up its mystique in the eyes of truly affluent consumers
and lure those who aspire to be part of the brands world.
The French jeweler won over first runners-up Four Seasons and second runners-up
Burberry. These top luxury marketers carefully executed each new campaign in 2012 to
align with the brand heritage, values and status while incorporating new technologies and
communication channels.
One word sums up Cartiers marketing across all channels: class, said Mickey Alam Khan,
editor in chief of Luxury Daily, New York. Every execution from Cartier is resoundingly rich
and true to the brands values. The implementation is flawless and the effect simply aweinspiring.
However, Cartier did not forget the aspirational consumer. It was not afraid to flaunt its
history, traditions and craft through accessible channels to attract newer customers to the
fold.

TARGET MARKET
Rolex
With a strong heritage of quality and dominance in the watch industry, company is facing a
downward trend in the sales and revenue. Recession is not only reason for the decline in
sales but the important factor is not aligning with the changes in the consumer behaviour.
Rolex has been considered a long time as a male watch; they are trying to get the woman to
like it to. Another important theme of the strategy is the backward vertical integration in
order to secure future supply and definitely loose dependence on competitor groups. The
image of an arrogant Rolex showing off sounds very contradictory with the low profile
and humility of Rolexs top managers, but the brand is now strongly associated with
symbolic consumption.
The opportunity of increasing their presence on the female segment is identified, but that
the company still seems having troubles implementing it and attracting woman. In fact,
shows, the company already tried in 2000 to target more specifically women with a very

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LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

innovative campaign in breach with the preceding ones. But this campaign did not last very
long.
Cartier
Cartier is a well-known luxury brand and being considered a "luxury brand" by itself,
connotes a certain feel of exclusivity, excellent quality, high-level precision and outstanding
craftsmanship which makes its target consumers only a small and niche-type of population.
Cartier's main target consumers belong to the luxury sector of the market who are
individuals classified at the top-end spectrum of wealth and social economic status. These
so-called "elites" are known to spend heavily on authentic and famous luxury brands to
further enhance their image and position in the society. The Cartier brand's target
consumers are also known for their "price insensitivity". According to a study what is
interesting about the Cartier brand is its strong brand image which has managed to create
the highest form of command and craftsmanship which in the minds of its target consumers,
set a strong calling and demand to remain loyal to the brand. Although considerably small in
terms of numbers, the Cartier brand's target consumers are heavy spenders who, from time
to time, update their fashion items for a more innovative and up-to-date look. This target
market is also known as the society's trendsetters.

SWOT ANALYSIS
Rolex
STRENGTH

Brand image strongly established as a premium luxury brand.

Introduced the first waterproof watch, first automatic dating watch.
It is one of the largest and most reputed luxury watch manufacturer in the world.
Excellent advertising and branding by associating.
Sponsorship of global sports events as well as other international events.

WEAKNESS

Counterfeit and fake imitation affect the brand image.

Competition from several premium watches and maintain brand essence means lot of
investments

OPPORTUNITIES

Rolex could introduce separate product lines with different brand identities under the Rolex
brand.
Emerging economies pose a great opportunity to penetrate the global market further
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LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

THREATS

Rolexs limited dealership and long waiting periods can lead to its competitor brands.
Fake imitations can hurt the brand image

Cartier
STRENGTH

The brand has an image as a luxury brand and popular global premium product.
Known predominantly as a jeweller, Cartier has an excellent reputation for beautiful and
unique watches.
Good advertising and brand presence through print ads & TVCs.
Also has offerings like watches, perfumes and prestige accessories.

WEANESS

Cartier is known for also exquisite jewellery is not just a watchmaker, its competing brands
on the other hand are predominantly watch brands

OPPORTUNITIES

Lack of suitable destinations for retail in luxury market is an opportunity for the brand to
establish itself
High growth in the luxury watches segment seen in emerging economies

THREATS

Consumers display the double aspect of a strong luxury culture and a strong sensitivity to
prices
High switching costs for the wealthy

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LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

MAJOR FINDINGS
ROLEX VS CARTIER
Rolex as an international brand is much easier to find than Cartier at times. When it comes
to production of watches, Rolex beats any other company by a landslide. Rolex is the worlds
top watch producer, meaning that there are more Rolex watches available on the market
than any other watch brand. Rolex and Cartier tend to be neck and neck in pricing, with
Cartier watches being slightly more expensive than Rolex watches.
Rolex watches tend to be sturdy and have a more practical feel whereas Cartier is known for
more whimsical feel and design. Both brands have a number of different lines, allowing
watch buyers to purchase a design that works for them. As Cartier is also a designer of fine,
high end jewelry, you are likely to see more inspiration from jewelry designs in their
watches.
Selecting a good watch with Cartier or Rolex is easy to do because of both the brands focus
on high end, quality watchmaking. Customer service and guarantees make the investment
even more satisfying.

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LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

COMPARISON MATRIX
PARAMETER
MARKET
PRESENCE

PRODUCT LINE

PRODUCT
PRICE

BRAND
ROLEX
CARTIER
Since Cartier has many product lines to
Rolex being a purely watch brand is complement its brand name the
easier to find in the market
watches are a part of the larger product
line
Watch
- Air King
- Day Date
- GMT Master II
- Sea Dweller
- Submariner

Jewellery
Watches
Accessories
- Scarves
- Sunglasses
- Writing Instruments

Sturdy and practical masculine

designs
Neck to neck with Cartier, slightly
low priced

Whimsical and feminine design,

generally encrusted like jewelry
Neck to neck with Rolex, slightly high
priced
The advertisement campaign is a pure
product campaign presenting the watch
on a red background. Cartier has a
representation contract with Monica
Belluci. It means that, anytime she is
wearing jewellery, this is Cartier
jewellery
Cartier's main target consumers belong
to the luxury sector of the market who
are individuals classified at the top-end
spectrum of wealth and social economic
status. These so-called "elites" are
known to spend heavily on authentic
and famous luxury brands to further
enhance their image and position in the
society

PROMOTION

Tthe Rolex brand name is already

so famous that their campaigns
main goal is not to gain notoriety
but to fully express and develop
furthermore the identity of the
brand

TARGET MARKET

Rolex has been considered a long

time as a male watch; they are
trying to get the woman to like it to,
but the brand is now strongly
associated with symbolic
consumption.

Rolex uses product

differentiation strategy based on
product durability, which is a
PRODUCT
DIFFERENTIATION measure of the expected age of
the product operating under
normal conditions
People associate the brand
name with success and luxury
BRAND
POSITIONING
and imagine Rolex wearers to
live a lavish lifestyle

For Cartier, product differentiation is

based on a varied array of tangible
characteristics and intangible values
associated with it, and for which
customers are ready to pay more.
One word sums up Cartiers
positioning across all channels: class

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LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

ADVERTISING
STRATEGY

SIGNATURE
PRODUCTS

Rolex executives decided that it was

time for the company to launch its
first branded Facebook page, a
herculean leap for a brand that has,
for decades, closely monitored its
reputation and only made tweaks
in both its watches and
marketing strategies after
subjecting them to significant
scrutiny.

French jeweler Cartier is adding digital calls

to action to its jewelry catalog by releasing
the latest one via email. The e-catalog offers
consumers touch points so that they can
find each item on Cartiers Web site, view
additional details and pricing and make a
purchase.

Rolex Datejust Watch

Ronde Solo de Cartier

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LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

REFERENCES AND ANNXURES

Websites:

Mode, histoire de la" Encyclopdie Microsoft Encarta en ligne 2004,

http://fr.encarta.msn.com

Fdration horlogre suisse : www.fhs.ch

www.worldtempus.com

www.rolex.com

www.cartier.com

http://www.redwatches.com/

www.w-o-s.com

http://www.rolexawards.com/home-flash.html

Less Arts dcoratifs, La galerie des bijoux

http://www.ucad.fr/galerie_bijoux/01presentation/presentation-gb.html

http://www.businessweek.com/pdfs/2001/0132-toprank.pdf business week, the 100

top brands august 6 2001 p 60-64

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LUXURY MANAGEMENT ROLEX VS. CARTIER WATCHES

CONTENTS
INTRODUCTION ........................................................................................................................... 1
HISTORICAL BACKGROUND........................................................................................................... 1
OBJECTIVE OF THE STUDY ............................................................................................................. 2
REVIEW OF RELATED LITERATURE (AND ANALYSIS OF PREVIOUS RESEARCH) ................................. 3
DEFINITION AND PRICE SEGMENTATION ....................................................................................... 3
PERCEPTUAL MAPPING OF LUXURY BRANDS ................................................................................. 4
BUSINESS PROCESS ...................................................................................................................... 5
PROFILE ..................................................................................................................................................... 5
BRAND IDENTITY ......................................................................................................................................... 6
ROLEX ....................................................................................................................................................... 6
CARTIER..................................................................................................................................................... 6
PRODUCTS ................................................................................................................................................. 7
INTERNAL ENVIRONMENT ............................................................................................................................. 9
MAJOR MARKET CONCENTRATIONS ............................................................................................................ 10
DIFFERENTIATION STRATEGY....................................................................................................................... 11
ADVERTISING AND PROMOTION .................................................................................................................. 12
BACKWARD VERTICAL INTEGRATION ............................................................................................................ 12
DISTRIBUTION CHANNELS ........................................................................................................................... 13
ANALYSIS OF DATA .................................................................................................................... 15
WORLD WATCH REPORT 2014 .................................................................................................. 15
PRODUCT DIFFERENTIATION ...................................................................................................... 18
ROLEX ..................................................................................................................................................... 18
CARTIER................................................................................................................................................... 18
POSITIONING ............................................................................................................................. 19
ROLEX ..................................................................................................................................................... 19
CARTIER................................................................................................................................................... 20
TARGET MARKET ........................................................................................................................ 20
ROLEX ..................................................................................................................................................... 20
CARTIER................................................................................................................................................... 21
SWOT ANALYSIS ......................................................................................................................... 21
ROLEX ..................................................................................................................................................... 21
CARTIER................................................................................................................................................... 22
MAJOR FINDINGS ....................................................................................................................... 23
ROLEX VS CARTIER ..................................................................................................................... 23
COMPARISON MATRIX ............................................................................................................... 24
REFERENCES AND ANNXURES ..................................................................................................... 26
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