Why do less known watch brands fail to become popular?

The simple answer is that marketing and good cash flow seems to be the key to success for any brand.  There are some watch experts that call a 15, 10 or even 5 year old brand, a brand with history. We know far too well that with even a small $40,000 investment, a new brand can be created; five or six models with high quality glossy boxes and some promotional equipment too. I have often mentioned the HTB brand (that would be Harry the Butcher) meaning that often individuals or companies with no experience, thanks to simple production and low cost assembling procedures, can make watches. It is, in fact, no coincidence that many new brands have sprung up, in recent years, just like mushrooms; the ‘clever ones’ have also built a company history.

Somewhat surprising is the so called history of these new, modern brands when we consider that several watch brands have 200 or even 300 years of history. To make matters a bit more confusing it is interesting to see many brands using a simple marketing technique, using the tagline “since x-year”.

Several brands like to show that they truly have a long, well established history and for this reason the since 1853, since 1888, since 1737 is strongly publicised by them. It is interesting to note that almost all of these companies have some history to hide and, in fact, the brand was acquired, it went out of business one or more times or, quite common in recent years, the brand name has been dormant for many years, bought and revived.

In this very big cluster of HTB watch brands we have many entrepreneurs that see an easy opportunity to make (big) money. In fact Harry (being a butcher) knows little about making, marketing and selling watches and also he (not many ‘she’ in this business, actually) has spent his $40,000 in stock with no money and no experience about marketing.

Only a few days ago a new (yet, another) brand has been presented to me. One model was advertised at $800 retail price when, I know for a fact, that it doesn’t cost more than $45 to make. I suppose, think big, is the philosophy of these new comers.

The clever (very questionable) marketing strategy that these companies follow is named distribution. Nothing new for any business to have distributors or agents, but many (almost all) watch manufacturers have coined a new terminology – named “distragent” (distributor/agent).

In fact all of these distragents are nothing but straightforward investors, lead to believe that they are the sole territory distributors (as agents will prove to be too costly to the manufacturers).

I need to point out that, in recent years, a few other industries are following this trend; market globalisation on one side with fewer risks and some greed on the other.

Recently a friend of mine who is a UK distributor for watches and jewellery, was asked to pay over $70,000 to purchase (stock) jewellery to resell to the UK market. Many watch manufacturers (unknown brands) have in place similar procedures; “buy stock at the rate of $20,000 / $35,000 per quarter” and you can become a “distragent”. I remember an American brand asking me, some 6 years ago, to purchase from them at the rate of $35,000 per order without offering any territory exclusivity.  To date, they are selling in UK but in very small quantities, while the brand has since been sold to a Swiss company.

While on one side, Harry is now making watches, on the other we have “distragents” that know nothing about the watch industry and, in many cases, know nothing about watches in general. “Distragents” just like to take on the challenge to make big money. Well, yes, it is a bit of a mess with the blind leading the blind.

With no money in the kitty for any adverting and/or marketing (in many cases both words unknown to both parties), what will (and does) often happen is that the brand fails with Harry going back to his butcher shop and the “investor” going back selling, probably, crisps or spare car parts.

A word of advice to the consumer. Thanks to a very clever man (Mr. Hayek – who has recently died) many watches (brands) have become a status of fashion and not precise and engineered timepieces. It is not really worth asking a lot of questions or doing much research when buying any watch below $100, but when a watch starts costing $200/$300 or much more it is really worth checking the true history of the brand, their manufacturing and quality control.

Why do less known watch brands fail to become popular?

In fact all of these distragents are nothing but straightforward investors, lead to believe that they are the sole territory distributors (as agents will prove to be too costly to the manufacturers).

I need to point out that, in recent years, a few other industries are following this trend; market globalisation on one side with fewer risks and some greed on the other.

Recently a friend of mine, who is a UK distributor for watches and jewellery, was asked to pay over $70,000 to purchase (stock) jewellery to resell to the UK market. Many watch manufacturers (unknown brands) have in place similar procedures; “buy stock at the rate of $20,000 / $35,000 per quarter” and you can become a “distragent”. I remember an American brand asking me, some 6 years ago, to purchase from them at the rate of $35,000 per order without offering any territory exclusivity.  To date, they are selling in UK but in very small quantities, while the brand has since been sold to a Swiss company.

While on one side, Harry is now making watches, on the other we have “distragents” that know nothing about the watch industry and, in many cases, know nothing about watches in general. “Distragents” just like to take on the challenge to make big money. Well, yes, it is a bit of a mess with the blind leading the blind.

With no money in the kitty for any adverting and/or marketing (in many cases both words unknown to both parties), what will (and does) often happen is that the brand fails with Harry going back to his butcher shop and the “investor” going back selling, probably, crisps or spare car parts.

A word of advice to the consumer. Thanks to a very clever man (Mr. Hayek – who has recently died) many watches (brands) have become a status of fashion and not precise and engineered timepieces. It is not really worth asking a lot of questions or doing much research when buying any watch below $100, but when a watch starts costing $200/$300 or much more it is really worth checking the true history of the brand, their manufacturing and their standards in quality control.

 

 

 

Consumers! Are they really stupid?

We all take for granted that we can run or walk up and down stairs or play sports. It actually all started when we were one year old and we took our first steps. We cannot really remember such an event and we are just keen to move on to new experiences.

Faster computers and new software are teaching us simpler (new) tasks while, really, taking away decision making and basic brain activities. In marketing, CRM has been created and new software for it, while the motor industry cannot work without DMS software. The fact is that, most people, when they search for a document, don’t know why they type *.doc. They probably don’t know what DOS is or what wildcards are – they are just running, forgetting that, once, they learned to walk.

This is the modern consumer, the one that will type *.doc without knowing why and that will use CRM and/or DMS software only because he/she has been told so when the “same basics” can be found still with older and simpler software/solutions (we have just not been taught on how to use them properly in the first place).

The consumer reads magazines, follows television and bill advertising and is up to date with all the latest products/models.

The object is – stop running and remember how to walk.

There is little brain engagement by the consumer when purchasing a watch and due to forgotten primitive skills many wouldn’t even know how to search and research on the Internet.

I have been told by many that watches are in the fashion industry and price paid and value perceived by the consumer are very much determined by their desire to obtain that product.

Why should anyone buy a £5,080 Breitling Navitimer when they can have the same (better, actually) watch, if they pay £1,350 for the CX Swiss Military Hurricane?

I suppose, it can come down, also, to simple stupidity.

To distinguish the clever ones from the stupid we could mention motorway service stations. A clever buyer will never buy a heavily discounted watch from a stranger at the car park of a motorway service station, would you? Many actually do and, in fact, in the late 90s, a brand became extremely successful. So much so that, for a few years, it was mentioned and sold all over UK. That was until the BBC made a program showing £499 retail on a particular model/brand, discounted by most vendors to around £99/£125, selling at service stations from £35+ when the actual cost of the watch was £7.

But, because I am clever, I will never buy a watch in a car park from a stranger.

Hence, because I am clever, dazzled by advertising, I will rely on shops or the Internet to purchase my next watch.

Clothes belong to the fashion industry but, most of us, before spending £800 on a suit or £500 on a coat, will do some shopping around.

Why do most buyers not question the price tag on a watch?

As well as stupidity we are also dealing with a lot of ignorance. As we forget how we have learned to walk we also have forgotten that old fashion craftsmanship in the watch industry is very much a thing of the past. We forget that the BBC has told us that the watch advertised for £499 was actually made for £7.

The £700 watch sold today by some “famous” brands, does not cost £7 to make, you are right, it costs £45. Perhaps, compared to the one mentioned above for £499, this £700 watch sounds like a bargain. It is not coincidental that, inclusive on the costs of the selling price, someone like Tiger Woods has been paid $20 million to endorse a brand or that the next 2012 London Olympics have received a very large sum of money to endorse and show to the world their “chosen” watch brand.

I have nothing against fashion, I buy expensive after shaves, shirts and ties, but, very rarely they are above £100. I would, however, indeed question a shirt or tie if the price tag was £700+ (and so would most of the consumers) – but never is the same done if we are talking about a watch.

The watch industry, especially in recent years, has been very clever at aiming at the stupidity and ignorance of their customers. The watch industry has been able to come up with some striking names and materials for their models, avoiding telling the customers the truth behind some of their operations. It has been so clever at imposing a fashion and status statement that the consumer sees nothing wrong in spending a few thousand pounds on a watch based mainly on the brand name and a few terms and statements. In reality, these terms and statements don’t mean much towards the quality and, finally, the price of the product.

Hurricane Chronograph by CX Swiss Military

There are several brands out there which adopt the Valjoux 7750 automatic chronograph movement for some of their automatic watches. The price range for this time pieces will go from £2,000 up to £6,000 (or even more) on COSC (chronometer) certified models. There are brands that charge less than £1,000 for a watch with a Valjoux 7750 movement, but to find out what really goes on and how they can afford to do it you will have to delve in the standards that the Federation of Swiss Watch Industry has set up.

What I would like to do is to talk about the Hurricane model, made by CX Swiss Military part of Montres Charmex S.A.

This watch is a Limited Edition model – 200 of each coloured dials, of which there are four different colours. Limited Edition brings costs up as the tooling is not done for thousands of watch cases but only for a limited series.

The watch was launched in Switzerland, with a Press Release in July 2010 to commemorate the 70th anniversary of the beginning of the Battle of Britain – (in September 1940 the more powerful Mk.IIa series 1 Hurricanes started entering service although only in small numbers). The watch was first presented to the public of Great Britain personally by Kevin Mitchell (Scottish agent for Montres Charmex) at the RAF Leuchars air show on 11th September 2010 while at the same time, Goldsmith magazine produced a full page article on their Aug-Sept issue.

The first thing that I like about this watch is – its size (47mm in diameter). It may have something to do with having a big wrist or just the fact that, with eyesight that is weakening all the time, I can actually see the time.

CX Swiss Military specialize in diver’s watches and they still hold the Guinness world record for deepest diver watch in the world – the 20,000 feet (there is a hint in the name about how deep it can go). As a lover of water resistant watches, I am pleased to know that this Harricane, a pilot’s watch, is also water resistant to 200m and, thanks to the CX pedigree, I am confident about its qualities.

The case is black and there is a good reason for it. The stainless steel has been treated with DLC which stands for Diamond-like Carbon. For example, a coating of only 2 μm thickness of ta-C increases the resistance of common (i.e. type 304) stainless steel against abrasive wear; changing its lifetime from one week to 85 years. Thus making the case harder, stronger, and slicker with a nice, very smooth finish.

The list of qualities for this watch is, actually, very long. The watch is anti-magnetic and for this it follows ISO 764 standards. The sapphire crystal is anti-reflective for a clearer reading of the dial. As the watch is a chronograph; there are pushers but these are marked in red so that the user will immediately know if it is water resistant or not.

The ETA 7750 Valjoux COSC movement is fitted with an Etachron regulator system (fine timing device/ 28.800 oscillations per hour – 25 jewels), a Glucydur balance bridge, a Nivaflex mainspring and an Incabloc shock-absorber.

Off the top of my head, I could mention at least half a dozen “commercial” brands that can offer similar watches for £3,500 – £4,500 but none of them have even half of the qualities of this watch.

The watch comes with a genuine Swiss made nanotech leather strap and the amazing part is that, for all of this technology and benefits, the watch is offered to the British market at only £1,350.