In haze of financial crisis, mergers and acquisitions appear among luxury brands in the world.
Take an example, Hong Kong famous watch group Peace Mark Holdings declared liquidation suffering from bank deflation policy in financial crisis. Chowtaifook bought 120 international high-end watch sales stations and 200 mid-priced watch sales shops from Peace Mark . Chowtaifook formally entered high-end watch market, selling high-end watches like Rolex and Omega.
Back to the point, this article is going to sum up four tactics that famous watch brands adopt to protect themselves against the effects of financial crisis.
Cross-boundary management, Open Low-Prices Market
The cooperation between brand and brand or between brand and designer is called cross-boundary management in fashion circles. In another word, cross boundary management tries to create products that appeal customers from both sides through the combination of each other’s influence. It brings not only new value but also generous commercial profits. That is why big brands adopt cross-boundary management one after another in recent years.
Luxury brands, because of brand marketing, can not lower themselves to enter low-priced market directly. Thanks to cross-boundary management, those big designers who work for luxury brands can attract lots of customers in low-priced market. More and more brands launch one or more second lines to occupy mid-prices and low-priced markets. At moment of financial crisis, this strategy means more extensive customer base and higher profits.
Traditional marketing channels always involve high-priced commercial centers, lavish specialty stores and expensive advertisements which represent important percentage in luxury products cost amount. Electronic Commerce, well, opens up a new channel that makes it possible to market at lower cost.
Tag Heuer watches now can be ordered through its authorised online retailers tourneau and barmakian. Tag Heuer said that this initiated move made it the first luxury watch brand that provided on line secured shopping for its all luxury watch products. The joined retailers said it would greatly help Tag Heuer enlarge its business. As what LV North America President said, their electronic commerce plan would provide Tag Heuer customers with convenient on-line shopping whose security and service could compare with their favorite retailers.
Network Promotion and Network Public Relations
The power of network are still expanding. More and more people start to use network. Mainstream medias like print media and TV gradually face bottleneck after several decades development and suffer from influence-shrinking situation. Network, such a platform, is now at its now growth point and becomes an important method for product and brand promotion with increasing influence.
Network public relations emerge as network influence expansion required. It, propagates brand activities, commercial releasing and brand information in quicker speed and with lower cost to better. It becomes the important part of luxury goods marketing through intervening in those bad information and building up good brand reputation.
Rolex, Tudor and Vacheron Constantin made better achievement last year through lots of network promotions. Omega carried out full-range network public relations in sessions of 2008 Beijing Olympic to keep it leading status in China. Casio Oceanus gained quick exposure by network public relations that kept pace with its releasing..
Price Reduction and Discount Promotion
Luxury brands seldom use season or activity price reduction or discount promotion considering the brand images. The price reduction, in particular, may weaken brand base. Therefore, they carry out flexible discounts through retail to keep the sales volume instead.
LV, No.1 in term of luxury brand value, declared to reduce the retail prices by 7% in average in Japan market in November. 2008 in hope of boosting the sales.
Chanel, No.3 in term of luxury brand value, declared price reduction as early as October 2008. The prices of most of products were reduced by 7% to 10%
Versace and Chloe followed suit soon. It was first time that luxury brands gave up the rule that product price may only rise but not reduce.
It is estimated that the profit of luxury brands may suffer the first slide-down in recent years though the need of top-class brands still exist.
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