任美娜

Markus Kubelka

Manuela Jäggi

Aurelie Liu-Boyer

Vien Yeung (杨文幸)

2

CONTENTS

EXECUTIVE SUMMARY .................................................................................................................... 3

1. INTRODUCTION ........................................................................................................................... 5

2. COMPANY BACKGROUND .......................................................................................................... 5

2.1. THE SWATCH GROUP .............................................................................................................................. 5

2.2. OMEGA INC. ............................................................................................................................................... 5

2.3. MISSION STATEMENT AND VISION OF OMEGA INC. ........................................................................... 5

3. GOAL ................................................................................................................................................. 6

4. SEGMENTATION AND TARGET MARKET.............................................................................. 6

5. PRODUCT POSITIONING ............................................................................................................ 7

6. INTERNAL ANALYSIS ................................................................................................................... 7

6.1. STRENGTHS ............................................................................................................................................... 7

6.2. WEAKNESSES ............................................................................................................................................ 9

7. EXTERNAL ANALYSIS ............................................................................................................... 10

7.1. CONSUMER .............................................................................................................................................. 10

7.2. COMPETITORS......................................................................................................................................... 11

7.3. CLIMATE .................................................................................................................................................. 12

8. SWOT-MATRIX ........................................................................................................................... 14

9. PRODUCTS ................................................................................................................................... 14

9.1. PACKAGING AND SERVICE ..................................................................................................................... 15

9.2. PRODUCT DECISION ANALYSIS ............................................................................................................ 15

10. PRICE ........................................................................................................................................... 16

11. PLACE .......................................................................................................................................... 17

12. PROMOTION ............................................................................................................................. 17

13. BUDGETING .............................................................................................................................. 20

14. CONTROLS ................................................................................................................................. 21

15. CONTINGENCY MEASURES ................................................................................................... 22

16. SOURCES .................................................................................................................................... 23

17. APPENDIX .................................................................................................................................. 25

3

Executive Summary

High-quality luxury watch manufacturer Omega will be releasing 2,022 units of a

new limited edition timepiece for the Beijing 2022 Winter Olympics. Omega benefits from

a strong presence that is supported by established distribution channels and a brand

image in China that is highly correlated with a sophisticated lifestyle and prestigious

social status sought by the wealthy. Nevertheless, Omega will have to face fierce

competition from other luxury watch brands such as Rolex and cannibalization from

other brands in The Swatch Group. However, Omega will distinguish the Seamaster XXIV

“Beijing 2022” from its competitors through the addition of fitness sensors and higher

precision. Increasing wealth outside of Tier-1 and Tier-2 cities will compensate for the

decreasing demand in luxury watches that has been triggered by governmental anti-

corruption policies and a trend towards low-end mechanical watches.

The final product will be available in two models: one for men and one for women.

Both models will be of Omega’s premium quality standard with features such as the

titanium case, professional diving features, and chronometer. Several details will differ

to provide sleekness and elegance to the users. Omega certified authentication cards will

accompany the Seamaster XXIV for international warranty and components certification.

Such an exclusive product comes with a premium price tag of ¥52,000 which allows our

production and marketing activities to break-even at roughly 1,100 units sold.

Since there is a limited number of units, we have chosen an exclusive distribution

strategy for the Seamaster XXIV. We will make it available physically only in the Beijing

Omega store to further increase the rarity of the product, but we expect the majority of

pre-orders to be made through the online channel. Omega’s presence within other Tier-

1 cities cannot be neglected. Hence, we will have the Seamaster XXIV displayed in

Shanghai and Guangzhou stores to generate more interest and provide potential

customers the ability to see the physical product before ordering it online if they cannot

visit a Beijing store.

Advertising activities will begin in September 2021 with an official teaser released

on Omega’s website and followed by more online advertising via China’s main social

networks Weibo and WeChat. Print ads will appear in early November sport, business,

and fashion magazines. These ads will feature Chinese celebrities to increase visibility

and awareness among our target audience. Finally TV ads are expected to be diffused in

4

December. The main official launch event should be held in January after which pre-

orders will start to ship.

Total cost of this new product, including production and marketing activities, will

add up to ¥24,950,000.00. Projected sales are expected to yield a ¥20,545,000.00 net

profit leading to a return on investment of 82%.

In order to verify the efficiency of all steps of the new launch, controls will be

present throughout the entire process. On top of quality controls, our team will also set

control measures on total sales volume and request a detailed customer profile analysis

to draw further conclusions on the marketing plan. As a plan remains a projection of the

future, we also agreed on how to react in case real performance misses our predictions.

Contingency plans will be taken as guidelines in this case.

5

1. Introduction

Omega SA is a high-quality watch producing company that belongs to the Swatch

group. Since the 1932 Los Angeles Olympics, Omega has been the official timekeeper for

all disciplines at the Olympic Games. Usually, they also produce a limited edition

timepiece for every Olympic Game such as the Omega Seamaster Olympia Beijing 2008

and the Omega Seamaster “Sochi 2014”. Since Beijing is likely to once again become the

site of the Olympic Games, our group decided to create a marketing plan for the Omega

Seamaster XXIV “Beijing 2022”.

2. Company Background

2.1. The Swatch Group

The Swatch Group is a market-listed holding company with 37 subsidiaries and

has locations in 50 countries. Company headquarters are in Neuenburg, Switzerland

while the administrative center is located in Biel, Switzerland. Their businesses are

divided into four different segments in terms of price. However, their core business is in

the watches and jewelry segment which represents about 97% of the company’s revenue

(annual business report, 2014). The Swatch Group is currently the biggest prefabricated

watch producer in the world.

2.2. Omega SA

Omega SA was founded in 1848 by Louis Brandt in Neuchatel, Switzerland and

now belongs to the Swatch Group. The Omega brand possess a global reputation of

precision, luxury, innovation and elegance. The symbol for Omega (Ω) is also the last

letter of the Greek alphabet and metaphorically stands for completion. With its industry

expertise and drive for perfection, Omega has unsurprisingly become the official

timekeeper for many world famous sporting events such as the Olympic Games. Over its

160 years, Omega SA has been a leading innovator in the industry with products such as

the “Moon watch,” the only watch to have ever been worn on the moon.

2.3. Mission Statement and Vision of Omega SA

To manufacture, distribute and service high-quality wristwatches

To continue the long tradition of excellence that the Omega name represents

6

To educate the younger market on the value of wristwatches

To create a social media strategy that will extend the message to a larger audience

and encourage users to interact with the brand

To Promote the purchase of wrist watches as a “reward” for key successes in a

young man’s life

“Our Vision is to strengthen our leading position in the industry by providing the most

advanced products to facilitate contemporary lifestyle.”

3. Goal

Over a seven month period, we want to sell 2,022 units of our Omega Seamaster

XXIV watches through an exclusive distribution method. We also wish to maintain and

build strong customer relationships while increasing our brand awareness. This goal will

be achieved through the launch of a target-oriented marketing campaign and the use of

our well-established network.

4. Segmentation and Target Market

Omega watches are classified as a premium-quality luxury product. After segmenting

the market (see 7.1. Consumer) we defined our target group with the following

characteristics:

Ω Very high income

Ω Well educated

Ω Aged 35+

Ω Seeking high quality products

Ω Place value on innovative products based on technology and timeless design

Ω Prestige is of great importance to them

Ω Interested in sports, especially the Olympic Games

Ω Health-minded and would therefore appreciate the additional fitness sensors

Ω Brand loyal

Ω Interested in culture

Ω Have a positive attitude towards China

7

Ω Great social network

Ω High self-esteem

As a result, the targeting strategy is concentrated marketing since we focus on a very

specific group of buyers. This strategy allows Omega the ability to concentrate its

resources on this unique target market by developing a highly directed marketing mix.

5. Product Positioning

We want to position the Omega Seamaster XXIV as a luxury product in line with

the reputation that Omega has earned as a strong luxury brand. Omega SA does not only

sell a watch, it sells emotional connections and a unique lifestyle.

The positioning statement goes as follows:

“To people who value high-end luxury products of high quality and uppermost

precision. The Omega Seamaster XXIV “Beijing 2022” stands for exclusivity and the

pioneering spirit. Wearing the Omega Seamaster XXIV goes far beyond simple watch

ownership, it is a commitment to a prestigious lifestyle.”

6. Internal analysis

The following paragraph focuses on the internal environment and thereby the first

two C’s (company and complementors) of Omega SA. Since the Swatch Group LTD. is the

holding company, this analysis also considers their importance.

6.1. Strengths

The Swatch Group has a very strong financial position. Although a consolidated

financial statement is the only source available to the public, it is known that Omega is

the leading watch brand with the greatest market shares in China. In 2014, the net-sales

of the Swatch group in greater China reached a remarkable 3,224 million Swiss Francs.

Additionally, the net-income reached a satisfying result with 1,416 million Swiss Francs.

The Swatch Group also has the leading position in watches with a retail value share of

28% in 2013. In 2014, the Swatch Group increased its marketing investments

8

significantly, including in China, with an impact of over 3 percentage points on the

operating margin. That same year, The Swatch Group also invested 44 million Swiss

Francs in intangible assets.

Another strength that Omega possesses is its strong media presence. The brand is

known for its participation in the Olympics, Golf, and other prestigious sports events

throughout the year. In addition, Omega acts as the official time-keeper at a variety of

sports events which signals Omega’s USP in precision, quality, and public confidence. In

order to ensure quality and product reliability, the Swatch Group Quality Management

team monitors the whole production process.

In addition, Omega’s status as a “Swiss” watchmaker further substantiates its

claim to high quality products. At the Olympic Winter Games in Sochi, Omega served as

the official time-keeper for the 26th time at the Games. Partnerships with socially

responsible organizations (GoodPlanet Foundation, Orbis International) also help to

reinforce public confidence. Omega backed these marketing activities with well thought

out advertising, a dynamic web and social media presence, and a focus on public relations.

Another important aspect within Omega’s media presence are its brand ambassadors.

These include celebrities such as actors George Clooney and Nicole Kidman, 22-time

Olympic champion Michael Phelps, astronaut Dr. Buzz Aldrin. However, there most

notable ambassador is undoubtedly James Bond who has worn an Omega watch since the

movie Golden Eye in 1995.

Since 2013, Omega has focused on creating anti-magnetic to eliminate

inaccuracies caused by magnetism in mechanical watches. Omega’s new anti-magnetic

Master Co-Axial calibers and the Speedmaster Dark Side of the Moon are just two of

several breakthrough innovations that were released in 2014. With continuous progress

and rewarding investments in research and development, Omega is able to attract a new

demographic. When it comes innovation, The Swatch Group is largely autonomous. By

founding the Nikolas G. Hayek Watchmaking Schools, The Swatch Group created its own

source of talents. As a result, they are able to build up their own human capital ensure

that their unique knowledge and skills on watch making are passed on.

Another one of Omega’s strengths is its worldwide presence. At present, China

represents the greatest market for Omega watches. However, the United States and other

Asian countries have been shown to have growing markets in the watch industry. The

9

Swatch Group, and Omega specifically, are well aware of this trend. In fact, Omega’s

official website, omegawatches.com, is currently available in 12 different languages. Last

year, the website experienced a significant increase in traffic and reached its all-time high.

Most visitors were from China, Japan, South Korea, Latin America, Russia and the United

States. As a result of its worldwide presence, Omega was also able to gain a better

understanding of foreign markets and their differences between each other in regards to

target groups, advertising strategies, legal aspects, etc. This knowledge will be an

advantage when it comes to the launch of the Omega Seamaster XXIV. This worldwide

presence yields another advantage in the form of an accessible global distribution

network. In some countries, The Swatch Group does not have a distribution subsidiary.

As a result, the Head Office in Switzerland will check and select specific retail dealers in

these countries to represent the company. In China, there are retail dealers in Shanghai

and Hong Kong.

6.2. Weaknesses

The current plan is to have the Omega Seamaster XXIV include fitness sensors that

will track health indicators such as heart rate and distance traveled. One major weakness

that comes with implementing this new feature is that Omega SA will have to buy this

technology from an external provider.

Another possible weakness is the positioning of the brand since Omega is not

drastically differentiated from its competitors. Furthermore, Omega SA faces significant

competition. The traditional competitors such as Rolex and other luxury watch brands

are still present. However, Omega SA products also face the possibility of cannibalization

from other luxury watches from The Swatch Group such as Blanc Pain and Harry Winston

Due to a growth in competition, there are only a limited amount of market shares that

can be acquired. Furthermore, Omega SA is confronted with a heavy reliance on

authorized distributers who also sell other watch brands.

On one hand, Omegas brand ambassadors are important to the brand’s reputation

and are a key part of its marketing strategy. Consequently, Omega has come to have a

heavy reliance on its brand ambassadors. Time is also a critical factor in the launch of the

Omega Seamaster XXIV. Firstly, there is a time constraint for the marketing campaign and

the selling of the product since everything has to be realized before the end of the Olympic

10

Games. Secondly, the new watch has a short product life cycle as most people want to buy

this watch before the end of the Olympics, after which the demand will likely drop.

7. External Analysis

The external analysis will now deal with the remaining three C’s (consumer,

competitors, and climate) in order to give a clear and concise image of the current

situation in the Chinese market.

7.1. Consumer

Since the high-end watch market targets the higher income brackets of the

Chinese market, it is important to understand the location and behavior of this specific

demographic segment and its sub-segments.

China’s upper class has been growing continuously over the past decade which

has been reflected in the exploding demand for luxury products. The demand for “high

watches” in China increased about 75% from 2009 to 2014 (Passport 2015, Watches in

China, Table 6) and reached an all-time-high in 2014 with a value growth of 6%. China’s

wealthy are geographically distributed across Tier-1 (e.g. Beijing, Shanghai), Tier-2, and

other cities. Each of these clusters accounts for roughly one third of the entire consumer

base with Tier-1 cities making up only 25%. By analyzing consumer attitude across

different cities, it was shown that the inhabitants of the four largest cities in China tend

to be more conservative in their attitudes towards saving and the importance of family

life. These conservative attitudes emphasizes the fact that Omega should look beyond

China’s most famous cities like and evaluate up-and-coming cities like Chengdu and

Wenzhou as potential markets.

From a psychological point of view, McKinsey divides China’s wealth among seven

different segments with the “Luxuriant” and the “Flashy” segments being of particular

importance. Both segments are prepared to spend considerably on luxury products and

are very brand-conscious. The “Luxuriant” are particularly concerned with quality of

family life, health, and environment. They are described as being sophisticated and low-

key. For them, quality is more important than a luxurious brand image. On the other hand,

the “Flashy” focus primarily on brands since they seek social status and prestige from a

11

product. Combined, these segments make up a total of 44% of China’s wealthy

consumers.

Omega’s products are able to attract both of these segments due to their

established brand image from various celebrity endorsements and achievements (first

watch on the moon, Olympic time keeper, etc.). The prices of their watches clearly

indicate luxury. On the other hand, the brand is known for its unique quality and enjoys

the benefits of being a Swiss watch manufacturer, the most recognized watchmaker

nation in the world.

7.2. Competitors

Omega has a very strong position in the Chinese market and is currently the

market leader among local brand names. According to Euromonitor, Omega had a market

share of 8.4% in 2013 (although it sank by 0.7% compared to the previous year). With

almost half of Omega’s market share, Rolex is the closest competitor at 4.6% and is closely

followed by Tissot’s 4.4% and Cartier’s with 3.7%. Tissot is the only competitor that has

had a continuous increase in market share since 2010.

In terms of product portfolio, comparable watch manufacturers differ mostly in

brand image. Design and status play a much more important role in mechanical Swiss

watches since their functionality is fairly similar. However, accuracy oftentimes acts as a

distinguishing factor. As a result, Omega has a unique opportunity to differentiate itself

from the rest of the mechanical watch market by utilizing the growing trend of fitness

trackers and integrating this technology into the proposed Omega Seamaster XXIV

“Beijing 2022”. The potential downside to this tactic is that it places the Omega Seamaster

XXIV in a competitive position with the new Apple Watch Edition since both watches

combine luxury with advanced functionality. Although no current market share for the

Apple Watch Edition could be found, it has been a huge success. In fact, it sold out within

1 hour after opening up for pre-order.

Future competition from the entrance of more high-priced, luxury smart watches

is also anticipated. Omega will be well advised to position itself against Smart Watches in

a way that shows Omega products are a lasting investment with technology that will not

be obsolete within two years.

Counterfeit products also need to be considered as competition for luxury watches

since the Chinese counterfeit market is well-known for its size and importance. However,

12

when considering watches with a value in excess of ¥30,000, it is unlikely that an

individual capable of expending such an amount for a watch would actually consider

buying a counterfeit item.

7.3. Climate

The current situation of the Chinese market will be evaluated by applying the

PESTLE framework. This framework includes political, economic, sociological,

technological, legal, and environmental data that may have influence on the watch

industry in China.

Political/Legal

In 2013, sales of high-end mechanical/analogue watches in China declined

severely as the government’s ongoing anti-corruption movement intensified the control

of gifting to authorities. Accordingly, spending on high-end watches declined for fear that

these purchase would draw unwanted attention from anti-bribery forces. The value sales

growth also declined from 11% in 2012 to 2% in 2013. State-owned, private, and

multinational companies all restricted spending on gifting. However, in the next year, a

gradual recovery occurred as consumers regained confidence in buying luxury watches

when high-end watch makers lowered prices and improved aftersales services.

Economic

The economic growth of China seems to have reached its peak in 2014 when

growth targets were missed and a 24-year low in growth occurred. This slowdown also

had an effect on high-end watches. The average price per unit declined while consumers

increasingly switched from higher to lower priced watches. However, high-priced

mechanical watches experienced a less severe downturn than high-priced quartz

watches. The mechanical watch market is projected to grow between 6%-8% per year in

value and between 7%-9% per year in volume over the next four years. Despite the recent

trends, high-priced watches are also projected to have similar growth figures.

Social

Watches have always been an important status symbol around the world,

especially for men. Since China is well known to have a particular interest in status

13

symbols and foreign brands, Omega enjoys a particular benefit in the Chinese market

where their product portrays success and high social status. Ever since China joined the

WTO in 2001, import tariffs have become smaller and foreign watches have become more

affordable on the local Chinese market. However, with the increases in luxury tax, more

and more Chinese people have been avoiding this increased price tag by going to Hong

Kong and other foreign countries to buy luxury watches at drastically lower prices.

Technological

From a technological perspective, mechanical chronometers in the high-end

segment can be very different in terms of internal mechanism which is associated with

more accurate time and a higher price. Omega (and its parent company Swatch) have

always been innovators in the watch industry and continue to push the boundaries by

creating new materials and reducing the amount of parts needed for a mechanical watch

to function. Although it would appear that smart watches are destined to be the biggest

competitor for regular quartz and mechanical watches, some sources indicate that

wearable devices are, on average, abandoned only 6 months after purchase. They also

state that smart watches lack innovation and user friendliness. How Apple will reshape

this industry, both in the lower (Apple Watch/Apple Watch Sport) and higher price

segment (Apple Watch Edition), remains to be seen. Overall, technological progress and

innovation remains strong in both the traditional Swiss watch industry and the rising

smart watch industry. A combination of both may hold potential for success.

Environmental

No clear evidence could be found that any environmental factors could have a

noteworthy impact on the current Chinese watch industry. However, with the advent of

corporate social responsibility and the Chinese government’s interest in reducing

pollution, there may be stricter regulations on the usage of certain watch materials and

the emission of production facilities.

14

8. SWOT-Matrix

Strengths Weaknesses Strong financial position

Technology for activity tracking not

available internally

Media presence Positioning

Precision, quality Limited market shares available

Innovative Human Capital

(Nikolas G. Hayes Watchmaker School)

Reliance on authorized distributers

Worldwide Presence Reliance on brand ambassadors

Global distribution network Short product life cycle

Opportunities Threats Differentiation using fitness tracker Luxury smart watches

High industry growth and growth of

Chinese middle- and upper-class

Decline in corporate gifting due to

governmental regulations

Increasing wealth outside of Tier-1 and

Tier-2 cities

Customers switching to lower-priced

watches

Opportunity to use special Olympic

edition to justify premium price

Consumer resistance towards fusion of

mechanical watch and fitness tracker

9. Products

The Omega Seamaster XXIV “Beijing 2022” for Men

Inspired by the iconic Seamaster 300, the Seamaster XXIV is a continuation of the

long-standing partnership between Omega and the Olympics. Its namesake is derived

from the fact that the Beijing 2022 Winter Olympics will be the 24th Olympiad. This must-

have commemorative piece sports a 45 mm symmetrical titanium case with a matching

bracelet. The black timeface is visible through a scratch-resistant anti-reflective crystal.

Its unidirectional rotating diving bezel possesses a matte black ceramic ring and

chromium nitride diver’s scale. A date window appears at the 3 o’clock position with a

helium escape valve at 10 o’clock and power is provided through the Master Co-Axial

caliber 8400. For a more modern audience, the Seamaster XXIV also comes with state-of-

the-art fitness sensors that track the user’s heartbeat, calorie intake, and distance

covered. This information can then be previewed from any mobile device, tablet, or

15

computer with Bluetooth capabilities. Lastly, the inside also houses Omega’s official

premium chronometer.

In honor of the 2022 Winter Olympics in Beijing, the Seamaster XXIV possesses a

small seconds counter at 11 o’clock, a 12 hours recorder at 9 o’clock, and a chronograph

30-minute recorder at 5 o’clock. The positioning of these recorders represents the

locations of the three event cities: Zhangjiakou, Yanqing, and Beijing. The index markers

and hands are filled with jade Super-Luminova and the caseback is embossed with the

“Beijing 2022” Olympic emblem.

With a water resistance of 30 bar (300 meters/1000 feet), a resistance to magnetic

fields greater than 15,000 gauss, and Omega’s highest quality standards, the Seamaster

XXIV is prepared to equip adventurers and athletes of land, sea, and ice.

The Omega Seamaster XXIV “Beijing 2022” for Women

This timepiece shares the same Omega premium quality and professional diving

features as the Men’s model but sports several aesthetic differences. The titanium case

is 37.5 mm with a white leather wristband. One of the most striking features is the ice

blue mother-of-pearl dial.

9.1. Packaging and Service

All watches come in the classic red leather Omega box with white suede interior.

The packages also contain a certificate of authenticity, red hardcover instructions

manual, and three cards. The cards are for the international warranty, chronometer

certification, and pictogram. Lasting quality is further ensured with a 4 year warranty.

9.2. Product Decision Analysis

The Model

In order to attract our highly affluent target audience, this timepiece had to be

modeled off of one of the higher Omega models. Furthermore, in the spirit of the

Olympics, the watch should be adaptable to a variety of environments that any athlete

may visit. As a result, the Seamaster 300 was chosen as the model. This iconic watch is

one of Omega’s best offerings and is the most environmentally versatile.

The Seamaster’s primary competitor is Rolex’s Submariner. There is no contest;

in the market for diver watches, the Seamaster and the Submariner are in a league of their

16

own. Both timepieces have nearly equivalent specifications and performance although

the Submariner is often regarded as having a slight edge. As a result, for the Seamaster

XXIV series, we decided to include a brand new feature with the fitness sensors which

further coincided with the athletic Olympic theme.

The Design

With Beijing as the host city and a Chinese audience, we wanted to incorporate

pieces of the Olympics and China into the Seamaster XXIV. We realized this endeavor

through the positioning of the recorders, the jade Super-Luminova, and the embossed

caseback. We took the Olympic theme a few steps forward with the women’s watch by

using a mother-of-pearl dial that is reminiscent of an ice rink. Furthermore, we decided

to exclude a digital face for the fitness sensors in order to preserve the timeless

appearance of these watches.

With all of these characteristics, we have an attractive Seamaster XXIV series that

is as much a status symbol as it is pragmatic. These features, along with the powerful

Omega brand, differentiate the Seamaster XXIV from its competitors and will appeal to

our target audience.

10. Price

Since these timepieces are of the highest quality, they are sold at a premium price.

The Seamaster XXIV “Beijing 2022” for Men has a price tag of ¥52,500. The Seamaster

XXIV “Beijing 2022” for Women will be sold at ¥52,500 as well. The premium price serves

as a signal for exclusivity and the highest quality. Furthermore, we decided to set the price

for this Olympic Limited Edition higher than “normal” Omega watches to stress the

prestige of this product. Additionally, the price elasticity for the Seamaster XXIV is

inelastic because it is a specialty product. Therefore customers have low price sensitivity

and high brand loyalty. The price ¥52,500 will allow the watch to break-even at roughly

1,100 units sold and is based on variable costs of ¥30,000 and fixed costs of ¥24,950,000.

If all 2,022 can be sold, the profit is calculated to be over ¥20.5 million and the ROI would

be as high as 82% (see 13. Budgeting).

17

11. Place

Since the Seamaster XXIV is a luxury item with a limited production of 2,022 units,

we will implement an exclusive distribution strategy which will further contribute to its

rare image. Hence, the Seamaster XXIV will be further positioned as an exclusive,

premium timepiece. As such, we have chosen to restrict its distribution to the online

website and Beijing Omega stores; we will notably not be distributing the Seamaster XXIV

in Shanghai and Guangzhou. We predict that a majority of our sales will be made through

the online website during the initial 1,011 unit pre-order launch and consequently during

the Games. Our target audience has a high income and especially enjoys watching the

Olympics and other sporting events. As a result, this individual will likely be physically

present at the Games which makes the Beijing stores convenient to them. For those who

will not be in Beijing, the online option is more convenient. However, we will have display

models of the Seamaster XXIV in several Omega Shanghai and Guangzhou stores leading

up to the Olympics in order to generate more interest.

For the Seamaster XXIV, we will also be using as direct of a distribution channel.

During the pre-order period, the initial 1,011 watches will be stored in our own

warehouses until delivery one month before the opening ceremony. After the first

deliveries, some of the remaining watches will be transported to the Omega stores. At

these stores, our sales staff will speaker directly with our customers and attempt to make

further sales.

12. Promotion

Timeline

Date Event

September 2021 Teaser on www.omegawatches.com

October 2021 Beijing 2022 microsite, pre-order begins

November 2021 Social media and print ads, display models

December 2021 TV ads, billboards

January 2022 Exclusive Beijing launch party, pre-orders delivered

18

February 2022 Sales team

March 2022+ Campaign scale-back

September 2021

Our 6 month marketing campaign begins in September when a 1.5 minute teaser

trailer will be posted on www.omegawatches.com. The theme of this video is “precision.”

It will rapidly play footage from the 1932-2020 Olympics in which timing was of the

utmost importance. If possible, an Omega clock will be in the background of the footage.

Eventually, the previous Olympic watches will appear alongside their respective

Olympiad with the final scene showing a heavily shadowed Seamaster XXIV. This video

will appear on the homepage and have two countdowns below it: one for pre-ordering

and the other for the opening ceremonies. The goal of the teaser will be to generate

interest from Omega loyalists and watch enthusiasts.

October 2021

This month is primarily about pre-ordering and the opening of the Beijing 2022

microsite. The homepage of www.omegawatches.com will contain a pre-order link that

redirects the user to the Winter Olympic/White Tiger themed microsite. On the microsite,

the user will be able to view images of the Seamaster XXIV, product description, and

specifications. Most importantly, users will have the option to pre-order the watch. The

goal is to attract the innovators.

November 2021

November is when social media content and print ads will be released. Our social

media efforts will be focused primarily on Weibo and WeChat since they are China’s

largest social media platforms. The print ads will appear in sports, men’s, business

magazines and would preferably feature Chinese Winter Olympic athletes (e.g. Shen Xue

and Zhao Hongbo). However, they may also feature other Chinese celebrities such as Fan

Bingbing and Yao Ming. Since social media and print ads are significantly cheaper than

other forms of promotion, they will be sustainable until the end of the Olympics.

Furthermore, display models will be present in Beijing, Shanghai, and Guangzhou Omega

stores. The early adopter should begin to take interest at this stage.

19

December 2021

The TV ads for the Seamaster XXIV will begin to appear in December. Our athletic

brand ambassadors from the print ads will be used again for the TV ads. The focus of

these ads would be “lifestyle.” Essentially, the athlete would be first shown wearing their

watch during a physical activity (e.g. speed skating) and then analyzing the results from

the fitness sensors. The next scene would then show the athlete in an upscale setting such

as a rooftop house party. These ads would play during the commercial breaks of the

Olympic Trials since our target audience will likely be watching. Most of the early

adopters will likely join at this point.

January 2022

For once, people will begin arriving in Beijing for Chinese New Year instead of

leaving. As a result, it is an opportune time to have the official launch party of the

Seamaster XXIV. The press and media, celebrities, athletes, and a multitude of other high-

profile individuals would be invited to this event. However, loyal Omega customers

would be invited as well. . The watch itself will finally be, for the very first time, physically

present at this event. Attendees will be able to bid on the watch and the winner becomes

the recipient of the very first Seamaster XXIV since the pre-orders have yet to ship. The

watch sold at this auction will likely be the biggest return we will receive on a single unit.

Another important event in January is the delivery of the pre-ordered watches.

The purpose of having the deliveries one month ahead of the Olympics is to drastically

increase awareness. The innovators and early adopters who pre-ordered are most likely

highly influential and visible. As a result, it is in our best interest to have these individuals

wearing the watches in public slightly before and during the height of Olympic interest.

Overall, these two events will attract the early majority.

February 2022

The Beijing 2022 Olympics have finally started and it is primarily up to our sales

team to make the sale. All of our print, social media, and TV ads have now been released

and will continue playing throughout the Games. The primary difference is that Olympic

interest has now reached its highest point, and a large number of our target audience will

20

now be able to see the Seamaster XXIV for themselves at Omega stores. This stage is when

the late majority will enter.

March 2022+

After 6 months of planning and implementation, the marketing campaign is now

coming to a close. By this time, all 2,022 units of the watches have hopefully been sold in

which case all ads and social media feeds will be quickly shut down. However, if there are

still a few units remaining, the campaign will gradually be phased out. Due to their high

cost, the TV ads will be stopped one week after the closing ceremonies. The ads and social

media feeds will have another month to run before being discontinued as well. If we have

crossed the breakeven point, we may even sell the remaining units at a discounted price.

At this final stage, the laggards will be the ones making the purchases.

13. Budgeting

Cost factor Timing Price RMB

Production

Infrastructure for production 1.5 years pre-Olympics ¥8,000,000.00

Labor costs 1.5 years pre-Olympics ¥6,000,000.00

Acquiring and implementing

technology for fitness tracker

1.5 years pre-Olympics ¥8,000,000.00

Marketing

Homepage and microsite 5 months pre-Olympics ¥50,000.00

Advertising: Print Ads and Social

Media

4 months pre-Olympics ¥250,000.00

Advertising: TV Ads 2 months pre-Olympics ¥1,000,000.00

Brand Ambassadors

Launch Event

4 months pre-Olympics

to mid-Olympics

1 month pre-Olympics

¥795,000.00

¥300,000.00

Sales Team mid-Olympics ¥100,000.00

Total ¥24,950,000.00

21

Price ¥52,500.00

Variable costs ¥30,000.00

Total units 2022

Gross profit per unit ¥22,500.00

Gross profit margin per unit 57%

Breakeven Volume 1109

Total profit with projected sales ¥20,545,000.00

ROI 82%

14. Controls

As previously mentioned, limited edition products highly related to the Olympic

Games have a main drawback in terms of sales profitability due to their very short

lifetime. Control measures are necessary to track the efficiency of the marketing strategy.

The Seamaster XXIV was especially designed for the Beijing 2022 Winter Olympic Games

and so pre-sales will start six months before the opening ceremony. The timeline of our

controls will cover the launch of advertising activities a year before the release of the

Seamaster XXIV planned in January 2022, the 6 month pre-sale period, sales volumes

during the games, and the market situation during the following 3 months after the

Olympics.

Controls will mainly focus on two variables as key performance indicators: the

number of orders realized through each marketing channel (online media,

advertisements, publicity etc.) and the customer profile. On one hand, sales volume

enables the evaluation of the efficiency of promotion and selling strategies. We aim at a

4% gross margin increase compared to the last model that was released for Rio 2016 and

will go through a traditional break-even analysis to draw profitability conclusions.

Moreover, as only 2,022 units of the Seamaster XXIV will be produced, our main objective

22

is to complete 50% orders during the pre-sale period and reach sold-out within 6 months

after the Olympics.

The consumer profile also contributes in evaluating the efficiency of our targeting

strategy. Marketing teams can obtain information concerning customer loyalty among

returning customers or see if the marketing campaign has reached new buyers. Market

share analysis will be conducted at this stage.

We will also be monitoring customer-service communications and customer

satisfaction as pre-sale and post-purchase controls in order to maintain the brand image

of Omega. The customer awareness level will serve as our control variable during the

marketing campaign. Surveys can be conducted to measure the awareness even though

we will be primarily targeting the very niche market of luxury sport watches.

15. Contingency measures

This marketing plan is just that, a plan. Plans do not always work out and we have

to be ready to deal with the possibility that this new collection of Olympic watches with

fitness sensors may not reach the projections outlined in this plan. We also have to

prepare ourselves for overwhelming success.

Omega will be the official timekeeper for the 2022 Winter Olympics so our group

does not need to worry about competitors releasing Olympics themed watches as we

have the exclusivity. Nevertheless, if profit margins miss our prediction due to an

insufficient sales volume, we will not inject more spending on advertising since there are

no guaranteed effect for on-the-spot strategies. However, if low profit margins are caused

by factors that cause the production cost to fluctuate, we will utilize our bargaining power

to reduce these changes and aim at break-even point. Such a large-scale project cannot

afford negative profits.

23

16. Sources

Ω "Annual Report 2014." Financial Reports and Development – The Swatch Group.

Web. 25 May 2015.

<http://www.swatchgroup.com/en/investor_relations/annual_and_half_year_re

ports>.

Ω "Swatch Group – Swiss Mechanical Watch Movements by Swiss Watchmakers -

Swatch Group." Swatch Group – Swiss Mechanical Watch Movements by Swiss

Watchmakers - Swatch Group. Web. 25 May 2015.

<http://www.swatchgroup.com>

Ω "Swiss Luxury Watch Manufacturer." OMEGA Watches. Web. 25 May 2015.

<http://www.omegawatches.com>

Ω "Watches in China." Watches in China. Web. 25 May 2015.

<http://www.euromonitor.com/watches-in-china/report>

Ω "Swatch Group Ltd in Personal Goods." Swatch Company Profile. Web. 25 May

2015. <http://www.euromonitor.com/swatch-group-ltd-in-personal-

goods/report>.

Ω "Understanding China's Wealthy." Understanding China's Wealthy. Web. 25 May

2015.

<http://www.mckinsey.com/insights/marketing_sales/understanding_chinas_w

ealthy>

Ω "The High-tech World of Old-world Watches." The Economist. The Economist

Newspaper, 7 June 2014. Web. 25 May 2015.

<http://www.economist.com/news/technology-quarterly/21603232-horology-

mechanical-watches-are-leaving-their-digital-cousins-dust>

Ω “Apple Watch Edition Sold Out in China.” Business Insider. Web. 25 May 2015.

<http://uk.businessinsider.com/apple-watch-edition-sold-out-in-china-2015-

4?r=US>

Ω “Foreign brands replace Chinese watches as status symbols.” People. Web. 25

May 2015.

<http://en.people.cn/200604/05/eng20060405_256207.html>

Ω "China's 2014 Economic Growth Misses Target, Hits 24-year Low." Reuters.

Thomson Reuters, 20 Jan. 2015. Web. 25 May 2015.

24

<http://www.reuters.com/article/2015/01/20/us-china-economy-

idUSKBN0KT04920150120>

Ω Gautschi, K. “The Swiss Luxury Watchmaking Industry.” HEC Lausanne. Web. 25

May 2015.

<http://www.hec.unil.ch/cms_irm/Gautschi.pdf>

Ω “Going for Gold: Five Strategies to win at Sports Marketing.” Nielsen. Nielsen

Global, November 2014. Web. 25 May 2015.

<http://www.nielsen.com/content/dam/nielsenglobal/apac/docs/reports/201

4/Nielsen-Sports-Sponsorship-Whitepaper-November-2014.pdf>

25

17. Appendix

17.1. Product Segmentation Swatch Group

Prestige and luxury segment

•Breguet•Harry Winston•Blancpain•Glashütte Original•Jaquet Droz•Léon Hatot•Omega

High Range

•Longines•Rado•Union Glashütte

Middle Range

•Tissot•Balmain•Certina•Mido•Hamilton•Calvin Klein Watches + Jewelry

Basic Range

•Swatch•Flic Flac

26

17.2. Product Images

Men’s

Women’s

Back

Dark

27

17.3 Example Print Ad (London 2012)

28

17.4. Competitive Analysis

Five Forces

Industry: Luxury Watches in China

Force Threat to Profits Explanation

Internal Rivalry High Luxury watch manufacturers have generally the same

target markets and so have to compete directly with

each other (especially Rolex and Omega). However,

they are unlikely to engage in price competition since

their products are considered luxury items.

Entry Low New entrants would not have the brand recognition

that incumbents have which is crucial to having a

succesful luxury item. They also may not be familiar

with the new regulations and policies.

Supplier Power Low With an exclusive and direct distribution channel,

there are few intermediaries. Hence, the manufacturer

has the channel power.

Buyer Power Medium As these are luxury goods, they are inelastic and so

prices stay the same. However, since many of these

watches are sold at the same store, consumers have

easy access to a competitor’s prducts. There are also

low switching costs.

Subsitutes High There’s a trend towards lower-end watches. Most

electronic devices, such as cell phones also, come

with their own clocks.

Conclusion: This industry is an okay one to be in, but it is not preferable.

29

Product Segmentation

5%

24%

71%

Watch Segment Market Shares

High-End (¥4200+)

Mid-End (¥600-¥4200)

Low-End (Under ¥600)