MBA Luxury Brand Management

MBA Luxury Brand Management
Class of 2016-2017

Tuesday, August 18, 2015

Managing a Watch Brand: How to catch a non-watch aficionado’s attention in a couple of minutes

By Marcos de Anchorena, MBA in International Luxury Brand Management 2014-2015, Argentina

In less than ten minutes our professor for “Managing A Watch Brand,” Jérôme Auzanneau (who has worked in the luxury sector for over 20 years for companies such as Rolls-Royce and Audemars Piguet), was able to attract everyone’s attention in a way I’ve hardly seen since the beginning of the MBA.  As watches are my main topic of interest; I’ve tried to share, with mixed amounts of success, as much as I could with my colleagues during our year at ESSEC.

So, how did he mange to do it? The answer is simple…by the expression of a completely honest point of view, through the display of an almost theatrical posture and the creation of a short group exercise. He was able to demonstrate to the students how much they did not know about watches and the industry in general. Questions such as “Which are the top reputable haute horlogerie brands?” or “How many watches are produced by Rolex or Cartier?” were met with diverse answers and hooked students for the following four sessions.

In order to explain what makes Swiss watches so special, we were driven through the history of watchmaking, the quartz crisis and how it impacted the entire Swiss industry as well as the financial information regarding export figures for the last years. We also had the possibility to extensively discuss watch complications, discover the lesser well-known options and their specific functionalities.

To play a bit outside the technical specifications, Jérôme introduced a whole section on how watch brands advertise and make use of celebrities to endorse their products.  It was funny to see how advertising pieces from brands that play in completely different competitive environments make use of similar resources. In general, it’s all about focusing on technical performance and promoting sports in a very similar way. But if we compare the ads with the messages that the brands want to deliver, we realize that the brands are not doing enough to communicate their design skills and technical creativity.

After this first approach it was time to go into the real business to understand what makes this industry so special. Jérôme described the following key features to explain the Swiss watch phenomena:

·         Built by few
·         Growing, vertically-integrating companies
·         Geographically concentrated
·         High quality
·         Suiting all tastes in materials
·         Preferences for mechanical movements
·         Highly valuable products
·         High export orientation
·         Outperforming other Swiss Exports
·         Sold to the World
·         Leading export nation in terms of value

Later, we went into defining what should be considered in a luxury watch, which brands belong to Haute Horlogerie and where to establish the frontier between them and mass-produced timepieces. This last question was not so easy to answer and an interesting discussion about which criteria should be used and whether or not Rolex should be included in this category took place. What was the answer? They’re the “Gate Keepers” of Haute Horlogerie!

After reviewing a series of videos revealing the craftsmanship of the highly skilled Swiss watchmakers, we were able to conclude that the high value of Swiss timepieces is directly linked to the value of the human factor in production. The main takeaway: “Machines just do not produce love” and customers want to buy products with a heart.

The last part of the market insights was what every MBA student waits for… the description of main groups and how our possible future employers are organized.

But there was still more… for the last session we were invited to visit the Breguet Museum in Place Vendôme where we were offered an exclusive look at the archives of the brand and discovered historical timepieces such as: one of Marie Antoinette’s pocket watches, a couple of tourbillons created by Mr. Louis Abraham Breguet himself and some interesting chronometers that Breguet produced in the 60’s for the French Marine Nationale Aeronautique Navale.

It’s amazing how with this short 4 lesson course Jérôme was able to offer the MBA Luxe students an in-depth review of the Swiss watchmaking industry, the history of watchmaking, what defines an haute horlogerie watch, how it is made, what explains the price point and why people are ready to spend that much on a timepiece.