LIME 5 case Study Frederique Constant_updated.pdf

IIM-I INTERNATIONAL WATCH BRANDS FREDERIQUE CONSTANT

55

Frederique Constant in India:

The Swiss Watch Industry:

Background Frederique Constant:

Aletta Stas-Bax, COO of watch manufacturer Frederique Constant, was sitting in her Geneva office in preparation of her visit

to India. While Frederique Constant was active in the country, results were trailing those realized in other Asian countries.

She asked herself, what should we do to realize a similar success for Frederique Constant in India compared with the

success we are realizing in, for example, China? The potential in India is vast, but we seem not to have found the 'sweet spot'

in our marketing mix to set the development on a steady long-term growth path.

The watch and clock industry, Switzerland's third largest exporter after the machine and chemical industries, has only one

market : The World. Swiss made timepieces are to be found in all the countries of the globe. And, what is no less surprising,

to suit all pockets, or almost so : from quartz fashion watches for a modest price to mechanical masterpieces, made of gold

and decorated with precious stones, costing several million francs. It is this wide variety and its worldwide vocation which

together have ensured the survival of the industry over the course of centuries.

Historically, the Swiss watch and clock industry has always had a specialized horizontal structure in which suppliers,

craftsmen and sub-contractors supply movements and external parts to assemblers called 'tablisseurs', who put the final

product together. However, to a lesser extent, the industry has also developed a vertically integrated structure in which

watches and clocks are sometimes made entirely by the same company, in this case called a 'manufacture'.

During the 1970s and early 1980s, technological upheavals (appearance of the quartz technology) and the difficult

economic situation resulted in a reduction in the size of the industry : the number of employees fell from some 90,000 in

1970 to a little over 30,000 in 1984, a figure which has remained stable over the last thirteen years (40,000 employees in

2004) while the number of companies decreased from about 1,600 in 1970 to about 600 now.

The average number of employees per company has remained constant, at just under 70 people per company in 2004, as

in 1970. The great majority of watch companies are small sized companies (employing less than 100 people) while a very

little number (less than 10) are each employing over 500 people.

According to a number of economic analysts, the Swiss watch industry was moribund in the middle of the 1970s, having

missed out the electronic revolution and being strongly affected by the economic crisis.

But what is the situation now, thirty years later? Having successfully completed its structural reconversion, the watch

industry is today, as it was yesterday, one of the brightest stars in the Swiss economic firmament. Better still, during the last

five or six years, it has taken the leading position amongst the country's most successful industries, breaking its own

records in exporting each year and going from 4.3 billion francs in 1986 to 19.3 billion in 2011.

See tables in annex for detailed figures on the Swiss Watch Industry.

Frederique Constant SA is a manufacture of luxury wrist watches based in Plan-les-Ouates, Geneva. The company was

established in its current form in 1988 by Aletta Bax and Peter Stas. Frederique Constant has grown into one of the larger

Swiss watch manufacturers. In 2012, production reached over 12,000 watches, sold in over 2,700 points of sale in 100+

countries around the globe. Frederique Constant positions itself in the Accessible Luxury segment, with most of its watches

selling at CHF 1,000-5,000 retail. The company is expected to continue its annual 25% growth, doubling in size every three

years.

FREDERIQUE CONSTANT CASE STUDYFREDERIQUE CONSTANT CASE STUDY

History of Frederique Constant:

Passion:

Live Your Passion:

Passion Awards:

Creativity:

Heart Beat:

Frederique Constant was created from the first names of the great-grandparents of the founders: Frederique Schreiner and

Constant Stas. Incidentally, these first names were also the middle names of the founders: Aletta Francoise Frederique Stas-

Bax and Peter Constant Stas; it was a tradition in both families to name children after their great-grandparents. Constant

Stas founded his own Lithography Company in 1904. This technology was primarily used to produce etched print plates.

However, it was also used to produce clock dials for the burgeoning Friesche Klokken industry. Lastly, the Frederique

Constant crest is inspired by the Stas family crest.

Frederique Constant is still an independent family-owned watch manufacturer based in Plan-les-Ouates, Geneva. The

company is now involved in all stages of watch production, from initial design to final assembly and quality control.

Frederique Constant is associated with the core values and competences of passion, creativity, high quality, innovation and

exceptional value.

Frederique Constant's slogan is Live your passion. Passion definitely shows through the company's craftsmanship, as

well as the company's charitable donations. Frederique Constant creates beautiful watches with precision design that are

assembled by hand, allowing for a high quality timepiece each and every time. Perceived value is important, so the

company knows that quality must be consistent and is vital to it's success. Frederique Constant is equally as passionate

about charity, with $50 from each watch sold in the Double Heart Beat Collection donated to various charities. These

charities include those related to the heart and children.

Live your passion, reflects the spirit of Frederique Constant's watchmakers, suppliers and customers. Initially, the slogan

was 'Live life with passion', but changed in 2001 to the more direct 'Live your passion'. Passion means to the company:

Passion for the creation of beautiful watch designs.

Passion for latest technology to develop exciting watch calibres.

Passion for smart component applications and processes to create watches at sensible prices.

Passion for entrepreneurship and business innovations

challenging conventional wisdom.

Passion for the success of the company.

To emphasize the true passion behind Frederique Constant, the company created the 'Frederique Constant Passion Awards'

to celebrate the passion that is fundamental to success. The winning companies or organizations are offered a Business

Case Study by Professor Dominique Turpin of IMD Lausanne on a strategic issue of choice, as well as a solid gold

Frederique Constant Manufacture wristwatch. The Financial Times is the official media partner. Winners were Mr. Peter-

Frans Pauwels, co-founder of TomTom, Dr. William Novick of the International Children's Heart Foundation, Mme. Laura

Cotton, founder of the Paint-a-Smile Foundation, Pierre Marcolini, founder and CEO of Marcolini Chocolatier and Mme.

Helaine Baruch of the American Heart Association.

A Frederique Constant watch is more than a luxurious timepiece. Behind it is an extensive creative process that involves an

inspired design, smart development and unparalleled attention to detail. Please notice the fine engravings and printing on

Frederique Constant dials. The company is also known for our delicate rounded cases that require many hours of hand

polishing. Frederique Constant's signature is the Heart Beat.

In 1994, Frederique Constant developed its first Heart Beat watch. The purpose of the Heart Beat development was to show

the mechanical nature of our watches. Heart Beat watches have an aperture at the position of the balance wheel to show

that the movement of the watch is mechanical. Early in the 1990s, automatic mechanical watches were slowly making their



comeback after the quartz crisis of the 1970-1980s. Typically, these mechanical watches looked similar to quartz watches,

except that the second hand moved continuously. On quartz watches, the second hand makes 60 steps per minute.

Frederique Constant considered it important to highlight the difference between mechanical and quartz watches visually. In

a mechanical watch, the balance wheel beats 28,800 times per hour. The balance wheel rotates clockwise and counter-

clockwise on its axes in a large ruby jewel. Its rotation is controlled by the hairspring, which constantly coils and uncoils, as

can be seen through the dial aperture of the Heart Beat watches. The Heart Beat has become the iconic signature of the

Frederique Constant brand.

In 1994, Frederique Constant as a company was growing fast but was still relatively small. Without an internal legal

department and sufficient management attention, a beginner's mistake was made: The Heart Beat feature should have been

deposited as a design registration. Possibly, a patent could have been secured. Instead, the first Frederique Constant Heart

Beat watches were introduced in the market without any registration. It only took one year before the first Heart Beat copies

started to appear. Some competitors plainly copied the Heart Beat dial aperture in their watches. Others changed the shape

of the Heart Beat, but inherently still copied the Heart Beat design feature.

All Frederique Constant watches are assembled by hand, one-by-one. Watchmakers need extensive training and experience

to be able to assemble the fine components that are required to manufacture a high quality watch. Watches are assembled in

a dust-free and air-controlled atelier with various proprietary and custom-made machines. Each and every watch passes

through the following quality control tests:

A fast tumbler exposing the watch to a strong rotation force.

A custom-made rotation device that simulates the movement of the wrist.

After above machine exposures, a full manual functionality check.

Timing accuracy test in three to five positions.

Water resistance test with the revolutionary Deltarox testing device.

Extensive visual inspection for miniscule scratches, particles and discoloration.

In 2006, Frederique Constant opened a new manufacture in Plan-les-Ouates, Geneva. The manufacture measures 3200

square meters, divided over four floors, offering an attractive working environment for the company's watchmakers in the

sectors of movement component production, caliber assembly, watch assembly, and extensive quality control. Numerically

controlled machines of the latest generation are located in a large atelier in the basement, where all component

manufacturing is concentrated. Caliber and watch assembly, as well as state-of-the-art quality control, are primarily

organized on the first floor of the new Frederique Constant building.

Frederique Constant watches are Swiss Made, an important seal for quality watches. In addition, Frederique Constant

timepieces are made in Genve, the most prestigious region for Swiss watch making. To have Genve on the dial, a watch

must be assembled and inspected by the Canton of Geneva and at least 50% of its value must be added in the Canton. These

are not just 'paper' rules; Swiss Customs regularly make random checks of export shipments.

The creative process is a collective effort by Frederique Constant and its distributors. After the production of second and

third round prototypes, the company's main customers are asked for their opinion, encouraging frank and open feedback.

The culmination of decades of experience and ingenuity around the world ensures the success of the Frederique Constant

collection. However, while extensive input from our customers is appreciated, the company reserves the right to make the

final decision on many details in order to maintain the unique character and style of the Frederique Constant collections.

Since 2001, nine new Frederique Constant Manufacture calibers have been developed, produced and introduced in the

market. With the introduction of the Heart Beat Manufacture, Frederique Constant has become a member of the small and

Care for Quality:

Manufacture in Plan-les-Ouates:

Made in Genve:

Cooperation:

Innovation:


exclusive group of Swiss watch manufacturers that produce their own calibers. A Manufacture caliber is the ultimate

achievement in the Art of Horology. Frederique Constant secured various patents for its manufacture calibers.

After three years of development, Frederique Constant proudly presented the new Heart Beat Manufacture Caliber at

Baselworld 2004. The Heart Beat Movement was developed by a Frederique Constant team collaborating with eight

specialists from the cole d'Horlogerie de Genve, the cole d'Ingnieurs de Genve and the Horloge Vakschool Zadkine. By

working closely with these institutions, cost could be kept under control. Moreover, the company gained an enormous

insight by working together with these experienced professionals. Upon completion of the development, Frederique

Constant hired three additional full-time watchmakers. Since then, four new Frederique Constant Manufacture calibers have

been developed, produced and introduced in the market. Learning from the company's previous mistake, all the designs for

the Heart Beat Manufacture caliber were properly registered before going to market.

During two years, Frederique Constant worked passionately on the application of a silicium escapement wheel for the Heart

Beat Manufacture caliber. In Basel 2007, the company proudly introduced this first implementation of new high-tech

materials to create even better, more precise and more reliable mechanical watches. The benefits of a Silicium escapement

wheel are:

Lubricant-free running: Age-related thinning and drying of lubrication of the escapement wheel will no longer occur. An

escapement wheel without oiling avoids the risk that oil spreads to other parts of the movement.

Lower inertia, increasing energy efficiency: The escapement wheel is accelerated and stopped at each tick and tock of

the watch. The lower weight silicium escapement wheel has lower inertia, increasing energy efficiency.

Better friction properties: Lower friction increases accuracy. It also reduces loss of energy, hence the energy requirement

for the caliber is lower.

In 2009, Frederique Constant introduced a World Premiere: a Tourbillon watch with Silicium Escapement Wheel and Lever

moonphase Date 24. Based on its award-winning Heart Beat Manufacture Caliber, Frederique Constant developed its

Tourbillon fully in-house with a number of unique features:

Silicium Escapement Wheel and Lever

Smart Weight Balancing

Fast Oscillation at 28,800 BpH

Tourbillon Cage individually numbered

Frederique Constant watches are sold in the 'Accessible Luxury' price segment; the core collection ranges from 500 - 2500

Euro for a high-quality Swiss watch. The company's business model is designed to keep costs down; resulting efficiency

gains are fully passed on to the final consumer. Frederique Constant has a no-nonsense open company culture emphasizing

integrity, respect, imagination and passion. It is important to point out that Frederique Constant has not changed its concept

and positioning. While other brands substantially increased their prices, Frederique Constant kept them largely the same.

This confirms belief in the original concept, the foundation and conviction to deliver on a consumer-centric philosophy.

Frederique Constant timepieces are in increasing demand by collectors. International auction houses now successfully sell

Frederique Constant timepieces, confirming not just their aesthetic appeal, their high quality, but also their value as a long-

term investment.

Heart Beat Manufacture:

Heart Beat Silicium:

Tourbillon:

Exceptional Value:

Collector's Value:


Concept & Positioning:

Frederique Constant Key Collections:

From the beginning, Frederique Constant decided to create Swiss classical watches at attractive prices. Aletta and Peter

Stas were in their early 30's, just married and practically without any assets. No complaints about their salaries, but there

was no way they could afford a 15'000 CHF watch. Still, they were very interested in beautiful and high quality Swiss

timepieces. Hence, Aletta and Peter Stas were their own target consumer. It is important to note that Frederique Constant still

has exactly the same concept and positioning. It confirms the company's belief in the original concept and business model.

Manufacture

The Manufacture Collection is built entirely around the proprietary movements developed in-house by Frederique

Constant. With a team of highly skilled watch making specialists, the brand started this development back in 2001. Now,

more than ten years later, Frederique Constant has eleven calibers.

Runabout

Frederique Constant celebrates the legendary Runabout gentlemen's sports boats -first introduced during the Roaring

Twenties- by offering an attractive series of limited edition timepieces named 'Runabout'. These beautiful wooden boats

can still be found today, gracing the waters of places such as Lake Geneva, Lake Tahoe and Lake Como. The Runabout

Collection is designed to express the classical elegance of the Runabout boats through rounded, hand-polished shapes,

and beautiful detailing. At the same time, this collection represents Frederique Constant's passionate involvement in

Runabout events such as Helice Classique on Lake Geneva (Switzerland) and the Concours d'Elegance on Lake Tahoe

(USA).

Vintage Rally

Frederique Constant is involved in various classic car events around the world in past years. In recent years Frederique

Constant was the Official Timekeeper of 'Peking to Paris', various 'Healey' Challenges and La Carrera Panamericana. For

each of these events, an exciting limited edition Vintage Rally time pieces was introduced. Pure style for pure passion!

Ladies Automatic

The Frederique Constant Ladies Automatic Collections have been designed by women for women. Classic and elegant,

feminine and sophisticated, sexy in every detail, these fine mechanical timepieces have been developed with passion to

reflect the values and aspirations of today's women.

Classic

Frederique Constant is known for its classical and refined timepieces of exceptional value. This collection has

various watches with classical designs.


Frederique Constant Focus:

Charities:

Brand Ambassadors:

Future Developments:

Key Focus Uniqueness Product Visual

Manufacture Since 2001 own caliber Heart Beat Manufacture Car Driver

development, patent HBM, Maxime Manufacture,

patent smart balancing TB, Tourbillon,

CIM anker, Freebeat Other Complications

Runabout Advertising Visual, Helice Nautique, Index case, Chrono, Runabout

Lake Tahoe, Venice Small Complication

Vintage Racing Healey, Peking 2 Paris, Panamericana Chrono and Automatic Car Driver

with rally logo

Ladies Automatic Double Heart Beat, Love, Amour Chocolate Double Heart Beat Nicole Faria

Classics Beautiful Swiss classical models at Automatic, Index, Slimline, Car Driver

accessible prices, value for money Business Timer

Frederique Constant donates US$50 from each watch sold in its Double Heart Beat Collection to various charities, including

those related to the heart and children.

The company donated a US$50,000 cheque to the American Heart Association during its 2010 Passion Awards for Charity

in New York.

Frederique Constant has donated two cheques in the value of US$50,000 (in 2008) and US$75,000 (in 2011) to the

International Children's Heart Foundation, a passionate organization that brings skills, technology and knowledge to

diagnose and care for children with congenital heart disease to developing countries.

The company partners with the World Heart Federation on the 'Hearts of Children' campaign as well as a multi-national

survey conducted in Brazil, India, UK and the USA by the World Heart Federation confirming Half of people incorrectly

believe we should wait until age 30 or older before taking action to prevent heart disease and stroke.

Frederique Constant is partner of the Only Watch activity to create truly exceptional and one-off pieces to raise funds for

scientific and medical research on neuromuscular diseases in general and Duchenne muscular dystrophy in particular.

Frederique Constant is represented in Greater China by brand ambassador Shu Qi.

Eva Longoria and Frederique Constant teamed up for Par Coeur in 2010 in Paris.

Miss Earth 2010 Nicole Faria is the global brand ambassador for Frederique Constant. Her role as global brand ambassador

for the Swiss watch brought her to various countries.

Supermodel Ins Sastre became global Frederique Constant Ambassador in 2013.

Frederique Constant will continue to expand its main strategies:

1. Focus on beautiful designs and highest quality at sensible prices

2. Keep our strategy 'Accessible Luxury' and continue to push for growth

3. Keep proportion similar on movements used in our watches between Sellita (60%), Manufacture (15%) and

Ronda (25%)

4. Experiment on new technologies like silicium or ceramic to learn and have a story to press


Global Sales:

Global Classic Media Plan 2013:

Frederique Constant intentionally aims to spread its sales worldwide. Below spread is based on turnover 2012.

Frederique Constant deploys an international advertising in various media. The brand is potentially seen 1.37 times by each

human living on earth. Spend in 2013 is estimated to be +36% compared to 2012. Please see an overview of media

covered:

8%

5%

36%

9%

34%

7%


Media Type # Media # Ads Reached Audience Total Audience

Billboards Campaign 43 195 36'800'000 7'176'000'000

Inflight 5 15 1'114'500 16'717'500

Lifestyle 45 110 10'986'000 1'208'460'000

Newspaper 15 60 9'225'255 553'515'300

Online 20 60 9'000'000 540'000'000

Watch Magazine 35 50 1'230'000 61'500'000

Watch supplement 12 12 5'303'333 63'639'996

175 502 9'619'832'796

Social Media is becoming a powerful mainstream media that needs to be harnessed by professionals in-house. Frederique

Constant has employed experienced managers in Geneva and Far East to strengthen its regional understanding, and expand

its digital activities worldwide and in Asia Pacific markets in particular. Please see the Digital Strategy Framework in the

annex.

The watch industry is one of the oldest industries in India and has a rich heritage to boast about. Over the years the growth

rate of the watch market has been modest and the penetration level at 27% is still very low. However the future prospects of

the watch industry looks bright driven by favorable demographics and a gradual change from a functional or utilitarian

product to a lifestyle one.

Currently, around 60% of the market by value is controlled by organized players like Titan, Timex, Maxima, HMT and many

Swiss, American and Japanese brands. Remaining 40% is where unorganized and grey market players operate.

By Value around 60% of the market is controlled by organized players. The unorganized players usually operate in the sub

500 price range and distribute their goods through small watch retailer and repairers. Fake watches too form part of the

unorganized market and are distributed through popular markets where imported goods are sold.

Many organized players from India have introduced their own brands/sub-brands in low price segment to counter the

challenges from the cheap watches in grey market.

The structure of the market is that of a pyramid with mass segment having the largest contribution. However in the coming

years, the market is expected to become like an inverted pyramid as the luxury and prestige watch segments are growing

faster mirroring the trends in most international developed markets.

Digital Media:

Watches in India:


Mass Segment: This segment caters to the sub 1,000 range of watches. National players, Titan and PA Time Industries from

the organized market with their brands Sonata and Maxima respectively cater to sub 500 watches within the mass segment.

Few regional brands such as Rochee, V.I.P also operate in this segment. There is a huge presence of unorganized players in

this segment.

Mid Segment: Brands such as Titan, Timex and Citizen that used to cater to the mass segment have increased their offering

in the higher price range and thus moved to the mid-segment. This segment also includes fashion watches in 3,000-8,000

range, which appeals to the customer more on the aesthetics and brand association front rather than technology

advancement. Few fashion brands, designer labels that operate in this segment are Diesel, Esprit, Fossil, Giordano, Tommy

Hilfiger, Guess, Kenneth Cole, Police etc.

Premium Segment: The segment caters to consumers who want to get associated with a brand name that signifies growth

and prosperity. These consumers consider watch brands as a reflection of their own personality. Many of these high end

watches are often gold plated, diamond studded and used as left arm jewellery. Brands here, range from premium,

affordable luxury to prestige price bands, examples are, Guess Collection, Seiko, Tissot, Xylys, Dior, Longines, Frederique

Constant, Rado, Tag Heuer, Harry Winston, IWC, JLC, Patek Philippe, Ulysse Nardin, Breitling, Cartier, Montblanc, Omega,

Rolex etc. Although this segment is largely driven by brands, it does have a significant grey market in the luxury and prestige

segment. In next 5-10 years, the market is expected to move towards an inverted pyramid as the value share of premium

segment will be the highest. This structure will mirror most international developed watch markets Swiss watch exports to

India were ~USD 35.6 million in 2009. India is still seen as a small market for Swiss watches, in 2009 sales grew at an

annualized rate of 25% valued at around USD 250 million. Analysts expect Indian market to grow to USD 1 billion market over

the next 10 years.

Retail Price Range

Titan USD10 - USD 2000 70% market share of the non Swiss watch segment

Tag Heuer USD 1000 to USD 4000 20% of Swiss watch market, 10% of international brands

Omega USD 2000 to USD 6000 20% of Swiss watch market, 10% of international brands

Longines USD 600 to USD 4000 5% of Swiss watch market

Casio USD 50 to USD 100 30% of International watch brands market

Seiko USD 300 to USD 600 10% of international watch brands market

Citizen USD 200 to USD 400 20% of international watch brands market

Rolex USD 4000 to USD 10000 20% of Swiss watch market and 10% of international watch market

Audemars Piguet, USD 4000 and above Collectively approx 10% of the Swiss watch market

Breitling and Breguet

Among the Swiss watches, the leading brands are Rolex, Omega and Tag Heuer. These brands have been in India for close to

20 years, and are now considered Indian. Omega and Tag Heuer have modified their advertising to the extent that they

have almost no international messages. They use Indian brand ambassadors, and even have their messages in local

languages. The attached annexure gives some details of the advertising budgets of various international brands in India.

Obviously, Frederique Constant's publicity budget is limited and it is a challenge to stretch the budget.

It is obvious that the Indian market is driven by advertising. Indian consumers have a great need to buy what their peers can

recognize, and therefore the brands that advertise the most normally sell the most. One needs to understand that a large

percentage of premium and luxury purchases in India are made as gifts for various occasions, and not for personal use. In

this situation, the purchaser wants the gift to be recognized for its value, and this has a direct correlation to brand

awareness.

It is into this scenario that Frederique Constant entered India in Dec 2009 to try and convince the Indian watch trade to accept

this new brand. Actually the brand was not new to the retailers, since it had been in the country earlier, but it had to be re-built

since it had been away for a long time. After convincing Watches of Switzerland in Mumbai to accept the brand, the process

of brand management started, and a few months later, Retail Interface Pvt. Ltd. was appointed as India Representatives for

Top 10 Brands in India (as per retailer feedback):

Frederique Constant in India:


the brand. It was a slow process but with a lot of persistence, the brand is today on display at the best retailers in 23 POS

(Points of Sale) in 8 metro cities. The attached annexure gives the names and locations of these POS. Talks are in progress

for another 10 POS to be opened in the coming year.

Following shows current situation for Points of Sale in India:

8 Metro Cities - 45 POS

25 State capitals - 50 POS

100 other towns - 100 POS (unlikely to be selling Swiss watches)

Frederique Constant is currently present in Metro Cities only in 23 POS with plans to grow to 30 POS in 2014 and 40

POS in 2015. Current POS are:

MUMBAI

Ethos Summit, CR2 Mall, Nariman Point

The Collective, Palladium, Phoenix Mills

Popley La Classique, Grand Hyatt, Sanatacruz

Watches of Switzerland, Linking Rd, Bandra

Swiss Boulevard, Atria Mall, Worli

Helios, Linking Road, Khar

DELHI

Ethos Summit, Select Citywalk, Saket

The Collective, Ambience Mall, Vasant Kunj

Ethos, Ambience Mall, Gurgaon

Ethos , Terminal 3, IG International Airport

BANGALORE

Ethos Summit, UB City

Zimson Time, Mantri Mall

Ethos, Orion Mall, Malleswaram

Ethos, BIAL

CHENNAI

Zimson, Express Avenue Mall, Royapettah

HYDERABAD

Ethos, Inorbit Mall, Madhapur

CHANDIGARH

Ethos, Sector 8C

KOCHI

Swiss Watch Boutique, Lulu Mall

Ahmedabad

The Golden Time - CG Road

The Golden Time - Satellite

Chennai

Helvetica - Phoenix Market City

Ethos - The Forum Mall

Surat

The Golden Time

POS in India:


Collection:

Frederique Constant India Strategy:

The LIME Challenge:

Mentor:

It is a challenge to collect money. Retailers in India keep holding money as their cash flow is mostly committed to the larger

and stronger brands. This is also a function of Frederique Constant's limited marketing spend. With higher advertising

spend, sales will improve, and retailers are more than willing to pay. Rolex for example collects money in advance.

It was a conscious decision to use influence and innovation rather than money to attract attention in the market. The overall

strategy was to address the India Corporate Sector. This is a significant segment of the consumer base, and no other watch

brand is specifically addressing this segment. Business executives in India have a high purchasing power, and are very

brand conscious. The Frederique Constant ranges of classical timepieces are ideally suited for office and business

situations. Following this, the tactical initiatives are:

1. To develop a Swiss watch for India - this was unprecedented, and for the first time there is a watch made in

Switzerland with indexes written in the Hindi Devanagiri script.

2. To sponsor some high visibility events - these were the Chevrolet Golf Challenge which attracts participants for the

Indian companies, and The Frederique Constant Polo Cup, which attracted a very exclusive segment of owners of

large corporations, and even members of some of India's royal families. Polo in India is sponsored by Jaeger-

LeCoultre, Longines, Omega and Tag Heuer. Very significantly, all these brands sponsor polo in Delhi and Mumbai.

The India Polo Association has recently declared Bangalore as a center for polo, and has circulated an invitation to

brands based in the city to become title sponsors for 5 years.

3. To make advertising conditional with PR - every newspaper and magazine was advised that Frederique Constant will

advertise with them only if they first published a significant amount of PR content. This resulted in a dual visibility for

the brand, and also gave the brand an exclusivity which attracted the discerning corporate customers.

4. Advertising in leading corporate magazines - The magazines chosen were Fortune, Outlook, Robb's Report,

MensWorld, and Elle. All leading publications in India, read by corporate executives.

5. Retailer involvement in marketing- Retailers were advised of the publications in which the advertising would be done

and their recommendations were also taken for local advertising.

6. POS promotions - Nicole Faria was taken to inaugurate new POS in Hyderabad and Mumbai and also for the finals of

the polo tournament in Bangalore.

7. Advertising in leading newspapers - These were selected based on the rates offered and the coverage in the local

markets.

8. Service Center - Frederique Constant has a service center located in Bangalore which is currently adequate for the

volume of service needed. The plan is to have another service center in Delhi which will be operational in a few

months.

1. Do a SWOT for Frederique Constant as an International Watch brand in the highly segmented Indian market and

state its current positioning and brand equity..

2. Is there merit in Frederique Constant's clear segmentation strategy to focus on the corporate sector? What

attributes should Frederique Constant emphasise to build its brand equity in this sector?

3. The luxury watch industry is dependent on high budget advertising campaigns,promotions and personalities.

What other options can you recommend to Frederique Constant?

4. Frederique Constant's objective was to develop a Swiss watch for India - this was unprecedented, and for the

first time there is a watch made in Switzerland with indexes written in the Hindi Devanagiri script. How best

could this initiative be leveraged.

Mr. Arun Dsilva, India Representative [email protected]


Annexure Section:

BRANDWISE ADVERTISING SPENDS IN 2012

(Rs 1 Cr = Chf 180000)

Brand Spends (Rs Cr)

ROLEX 30.0

Omega 27.5

Tag Heur 16.5

Hublot 6.5

Breguet 5.0

Breitling 4.4

Raymond Weil 3.8

Louis Vitton 2.0

Harry Winston 2.0

Ulysse Nardin 15.0

Piaget 2.0

Vacheron Constantin 2.0

Blancpain 1.0

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LIME 5 case Study Frederique Constant_updated.pdf

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