Value Proposition of Swatch


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1.      Introduction

Customer Perceived Value (CPV) of a product can be defined as the customer’s evaluation of the benefits and costs of a particular product when compared to other similar products (Eggert, 2015).CPV has a significant role in understanding if a product will succeed in the market as it determines the likeliness of a customer buying product, by believing that the product satisfies their needs (Marciuska, 2013). Several companies invest a lot of time and money in understanding how the customers would perceive their product and accordingly design and market the same (Ritter, 2012).

This report analysis the customer perceived value of Swatch, which is an internationally recognized Swiss watch maker comparing it to another leading brand Titan Company Ltd. Using the Sanchez et al (2006): perceived Value

\, we identify and evaluate the customer perceived value for Swatch. The same is them compared to the customer perceived value of Titan Company Ltd. Depending on the analysis make a new value proposition is produced and an implementation plan for the same is proposed.

2.      Understanding how the customer values watches

Customer perceived value is determined by how a customer sees a product in terms of the benefits gained and the cost incurred (Lapierre, 2015). To evaluate the CPV of Swatch it is important to understand how the customer’s value watches itself in the first place. A keen analysis is made on the same using Sheth et al (1991) “five Values” conceptual framework and

2.1 Applying Sheth et al (1991) “five Values” conceptual framework to understand the CPV of watches

According to the conceptual framework, there are five consumption values that affect a consumer’s choice.


Figure 1: Sheth et al (1991) “five Values” conceptual framework

2.1.1 Functional Value:

Functional value relates to the functions and services a product offers to a customer. This value can be considered as the primary value for purchase. The kind of the features offered by one product compared to another where the price stands constant has a great influence on the customer’s choice.

In case of Watches, the features a watch provides is what attracts a customer. Every watch has to do the basic function of displaying time. But when a watch is provided with additional features such as displaying multiple time zones, has a look that is extremely stylish and a very comfortable strap, the customers lean towards purchasing the same. With the advent of smart watches, the features provided by a watch have moved to a completely advanced level (Turnham, 2015. Watches with inbuilt fitness tracker, Bluetooth technology to link with smart phones and so on, improving either the features of the watches or to build on the elegance of the watch have a great influence on the choice of the customer.

2.1.2 Emotional Value

Emotional value of the product is its ability to arouse feelings when using the product them (Oakley, 2015). This in particular is very peculiar watches. Watches are one of the few pieces of accessories that are worn every single day and are often gifted. It is common to see watches being gifted to loved ones or as a remembrance in case of retirements. Unlike many other accessories watches tend to have a lot of emotional value, especially when gifted.

2.1.3 Social Value

Social value usually involves visible products (Page, 2015). Watches have a tendency to make a social mark. It is not uncommon to see leaders all around the world were signature watches as a symbolic reference. Omega for example has been featured as the 007 watch worn by Daniel Craig in Specter. Expensive and elegant watches in particular have a significant social value reflecting the class of the person wearing it (Motta, 2013).

2.1.4 Conditional Value

Conditional value of a product is based on situations and circumstances. A watch is a basic requirement to any kind of clothing as it adds a sense of style. Also, professionals like doctors, scientists and professors tend to invest in a well featured watch as they are used regularly in their everyday life.

2.1.5 Epistemic value

It is the value created when a product induces curiosity and novelty. A watch with inbuilt features that are used to more than just show time have epistemic value. The smart watches for one are highly technically in nature and keep imbibing interesting features increasing their epistemic value (Patel, 2013).

2.2 Applying Holbrook model for CVP

  Extrinsic Intrinsic
Self – Oriented Active Efficiency (Convenience)

A watch shows time with a flick of the wrist

Bands can be changed according to the comfort of the user

Additional features such as an inbuilt Bluetooth connected to smartphones can alert users.

Play (Fun)

Smart watches induce curiosity providing several features.

In built fitness trackers are a great hit in the watch industry

Reactive Excellence (Quality)

High Quality watches that support efficient pre and post-sales support are highly desired by a customer

When a watch is of high quality a customer wouldn’t mind paying a higher price


Aesthetics (beauty)

Elegant watches and vintage watches attract customers due to their simple design and high fashion look

Watches plated with gold and studded with diamonds are custom made by several customers to give them a stylish finish

Other-Oriented Active Status (Success, Impressions)

The status of a person can be easily determined based on the watch they wear.

Watches have been a symbol of social class for a long period now

Especially for men, watches are the first piece of accessories usually noticed.

A man who wears a Rolex is considered successful and makes an excellent impression

Ethics (Virtue, Justice)

Craftsmanship’s ethics play a huge role while purchasing a limited edition watch as the authenticity of it is questioned by the customer

Copied designs are resented by customers and companies that provide watches that are copied usually lose their reputation

Reactive Esteem (Reputation, Materialism)

Esteem is directly linked to social status.

Purchasing watches of high brands is one way to effecting a customer’s esteem

Spirituality (Faith)

This concept goes hand in hand with the emotional attachment customers have with a watch when specially the watch is gifted or passed as an heirloom

1.      Evaluating the existing value proposition of Swatch

The existing value proposition of Swatch can be analyzed using Sanchez et al (2006): perceived Value.


Figure 2: Adopted from: Sanchez et al (2006, p.406)

3.1 Functional value of Swatch:

Swatch launched in 1983 is a watch subsidiary of Swatch Group. It designs, manufactures and sells wrist watches. The company purely concentrates on manufacturing watches and has several kind of watches sold. They have several product designs and are famous for the varied variety they offer. From elegant to erratic, and pocket friendly to expensive they have watches available for all age groups and occasions. The material used in the products are also varied (Lim, 2015). They offer 10 types of brands that include, leather, metal, silicon, Velcro, rubber, plastic, textile, aluminum, stainless steel and mixed material and also have automatic, mechanical and quartz watches. One of the biggest pro for Swatch is that their watches are designed by several renowned designers and they can customize a watch as per the demand of the user. They are internationally available in 15 countries (Desrochers, 2013).

3.2 Functional value of Personnel:

As mentioned earlier the watches at Swatch are designed by renowned craftsman like Antoni Miralda, Cisco Jemenez, Fafi etc., and are extremely unique and stylish. The watches can be viewed on their online website that is very user friendly and easy to search in. The website also suggests the closest the store based on the product selected and the area searched in for. Stores of the Swatch are convenient and have extremely polite and friendly representatives. The representatives are patient and good at explaining how each of their watches are designed and help the customer choose an appropriate watch according to their needs (Pitzer, 2013).

3.3 Functional value of Product:

The quality of Swatch watches are exemplary. Each product comes with a warranty to help the user with after sales support. The look of the product varies which each of its collections. They have elegant collections such as Swatch Originals, Irony and Skin which are very classic. They also have a product line called Novelties with theme based watches such as Pop, Africana and Beach Swing. Special watches are designed event wise and are also made available to the customer (Gera, 2014).

Swatch watches are usually analog and simple. Rather than carrying too many dial Swatch watches do only their primary function with well-designed bands and dial colors.

3.4 Functional value of Price:

Swatch watches are available from a price range of 185 RM to 1000 RM and are very pocket friendly with a wide variety of options and a very appreciable customer service both pre and post sales. The quality of the product depends on the price.

3.5 Social Value

Since Swatch watches are more of an offbeat collection than the very elegant category they usually attract the more extrovert crowd. They do have elegant pieces but the variety is limited. The people who use these watches have a definite style and can carry them as a fashion statement (Smith, 2014). They have simple functionality yet are very exuberant making them an eye catch.

3.6 Emotional Value

Swatch watches are extremely comfortable and inexpensive making them one of the top choices for teenagers as their first watch forming an emotional bond. The Company’s personnel are also very friendly and connect to the customers at a personal level offering them suggestions and helping them choose products that fulfill the demands of the consumer (Fleury, 2015). The watches are reliable and the company offers an amicable post-sales support increasing the consumer loyalty.

1.      Evaluating Swatch existing value proposition in comparison to its leading competitor Titan.

Value Proposition Swatch Titan Winner
Global Presence Majorly present in Europe and south Asia in about 15 countries Global presence in about 32 countries Titan
Reputation (Osterwalder, 2015) Renowned company  since its inception in 1983 Though established in 1987, the company has grown quickly with a varied product range and high quality products.

It is the fifth largest wrist watch manufacturer in the world

Product Focus The company majorly focuses on wrist watches but also produces sunglasses The company has a varied variety of products available along with wrist watches, such as belts, wallets jewelry and so on. Swatch as the focus is more on the watch products
Product variety The products are very exuberant and have very limited classical pieces. The products vary from extremely elegant pieces such as their Nebula collection to funky models of their fast track collection Titan
Price Pocket friendly.

The costliest watch is about 1000 RM

The company produces extremely cheap watches 50 RM 10000RM Titan
Store personnel Friendly and supportive. Concentrate helping the customer choose an appropriate piece. Very professional and excellent at explaining the various features of each of their products Swatch – The personnel connect to the customers at a friendly level rather than being professional
Post-Sales Support (Mitreva, 2014) Swatch offers an easy post-sales support. In some countries door pick up and door deliveries are offered as well. They charge very little for post-sales support They offer in stores repair center that takes care of any issues to the watches. Batteries are replaced for free. However out of warranty charges are high due to the quality of the product Swatch –  As the post-sales cost incurred in minimum
Quality Good quality watches Exemplary quality Titan
Design (Messmer, 2013) Varied designs and trendy watches They have excellent selection of classic watches. Depending of the customer need

From the above analysis it is clear that Titan stands out most of the value propositions. However, Swatch is recommended when looking out for stylish, out-of-box watches.

2.      New value proposition and implementation of the plan

Swatch has all the value propositions of Titan, however it that these propositions are not as good and as efficient as those of Titan. The primary place where Swatch has to step up its game is in designing new products in its Swatch Originals collections that are elegant and classy and attract high class customer. Chronographic watches though present are not every attractive. Investment has to be made into designing watches that can compete with the Nebula and octane range of titan watches. Swatch has numerous designers and hence need to use them to create watches that can be worn at high society parties. Vintage designs is one other place Swatch can concentrate on to develop their customer base.


The prices of Swatch watches are very nominal. Titan though offers watches at RM10000 they also have watches that are as cheap as RM50 that are of the same quality. Titan does not compromise on quality and yet delivery cheap watches. This strategy needs to be adopted by Swatch to come up with products that are cheaper but still maintain the quality standards of Swatch.

The one place Swatch should not change is their trendy set of watches which are very funky. The company here should invest in marketing these watches to beat the competition of titan fast track group.

Swatch lacks the global presence of Titan. This could be seen as a back step. However, once sales improve in the existing countries expansion would become easier. To increase sales, Swatch would have to concentrate.

5.1 Value proposition to be developed

  • A special budget needs to be allocated for designing classical watches in Swatch
  • Designers need to be hired to design watches that look elegant and eternal and yet be priced as low as possible
  • High quality material has to be chosen and procured to manufacture watches
  • Several designs with limited quantity have to be manufactured
  • Once the high quality, optimally priced, elegant watches are designed investment has to be made in marketing the same (Yin, 2012).
  • Sales with the theme as one of a kind watch has to be marketed

1.      Conclusion

The customer perceived value of Swatch is identified and analyzed to understand where and how it lacks the customer perceived value of its key competitor Titan. A clear comparison and contrast has been drawn between both the companies to understand the key value proposition area where work needs to be done. A new proposition to develop innovative elegant designs has been proposed and the steps to inculcate the design of the same has been detailed. A marketing plan to sell the new design as a limited quantity piece has been developed to escalate sales, helping customers perceive Swatch Elegant collection as limited and one of a kind.

2.      References

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Fleury, E. and Bisig, M., Eta Sa Manufacture Horlogere Suisse, 2015. Exterior element for a wristwatch. U.S. Patent 8,964,512.

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Gera, S., 2014. Consumer attitude and purchase behavior towards foreign brands. International Journal of Research in Finance and Marketing, 4(1), pp.74-87.

Lapierre, J. and Giroux, V.P., 2015. Customer-Perceived Value Heterogeneity. In Proceedings of the 2000 Academy of Marketing Science (AMS) Annual Conference (pp. 393-393). Springer International Publishing.

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Messmer, S. and Muniz, S., ZD Luxury Watches and Accessories, Ltd., 2013. Watch. U.S. Patent D684,486.

Mitreva, E., Taskov, N. and Barishic, D., 2014. Post-Sale Customer Support Methodology in the TQM System. Iliria International Review–2014/1, 1(27), pp.74-86.

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Osterwalder, A., Pigneur, Y., Bernarda, G. and Smith, A., 2015. Value Proposition Design: How to Create Products and Services Customers Want. John Wiley & Sons.

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