TAG Heuer Asia Strategic Marketing Plan

TAG Heuer Hong Kong’s strategy is to serve the upscale sports watch market. It will capitalize on the timekeeping technology and brand values. There is an untapped potential market that desires high-quality, stylish goods, but want the watch to represent both success and individual achievements from competitiveness.

It is TAG HeuerHong Kong’s intention to gain market share in the Hong Kong upscale watch market. The immediate goal is to build brand image and brand equity through marketing. To accomplish this, TAG Heuer will allocate majority of its budget to advertising and public relations activities.

The initial product lines will be modern, simple watches, targeting both male and female. The pricing strategy will be based upon using prestige pricing.

The upscale watch market in Hong Kong is in a growth period, so now is an ideal time for establishing a clear positioning. After successfully establish a clear positioning, TAG Heuer will enter the China market. Upon successfully building the Hong Kong market and entering the China market, TAG Heuer will realize its initial investment and allocation of resources to the maximum potential.

I. SITUATION ANALYSIS

SWOT Analysis

Strengths

First sports watchmaker

TAG Heuer is already an established brand in the West and some Asian countries. TAG Heuer Hong Kong can leverage on its international brand awareness

Strong positioning as The Prestige Sports Watch in the West

Commitment to invest in its local marketing and advertising campaigns despite the economic recession

Subsidiary in Hong Kong to control brand guardianship and build closer relationships with customers

Weaknesses

No clear positioning in Hong Kong – lack of differentiation from competitors

Hong Kong consumers do not perceive how the attributes of sports can also demonstrate personal status and achievements

Weak distribution of product knowledge due to limited advertisement channels

Lack of advertising and PR strategies in Hong Kong

Opportunities

Asians are brand-conscious individuals to show personal status and achievements

The TAG Heuer brand and product have the potential to grow due to the lack of awareness in Hong Kong

Enter into the China market after establishing strong position in Hong Kong

Cultivate a stronger relationship with retailers and consumers to encourage sales

Create a more integrated marketing communication campaign

Threats

Popularity of replicas in the Asian market

Competitive market with many international brands available to consumers

Asians can be very brand-fickle

Consumer Analysis

Since TAG Heuer is a product of the West, we must first understand the cross-cultural consumer behavior. The Chinese culture is characterized by Confucianism, which includes certain doctrines that lead to the importance of ‘face’. Chinese tend to meet the expectations of others than acting in accordance with one’s own desires. This in turn leads to the importance of social belonging. Therefore, influencing the opinion leaders would definitely influence the market.

Although Chinese consumers are brand-conscious, they are also brand-fickle. Focusing on newness rather than brand values and identities, they tend to move from one brand to another after feverishly devouring one by mass adoption and mass rejection. This clearly shows the importance of fashion and how brand loyalty suffers due to this.

In terms of a watch, which is a personal accessory, Chinese consumers simply do not see it as an object that tells time. In fact, we should not focus on the physical purpose of a watch. In order to target the Chinese consumers, we must focus on the emotional purpose of a watch, meaning how a TAG Heuer symbolizes the consumers’ success, status and above all, ‘face’.

TAG Heuer has identified a unique target group who not only values ‘face’, but also competition. This group possesses the sports attribute of competition, which leads to personal achievements.

Competitive Analysis

The watch industry is enormous in Hong Kong. Competition is fierce. Although many of the upscale timepieces such as Rolex have strong brand equity, there is room in this market for TAG Heuer as brand loyalty is not high on consumers’ reasons for purchasing. Brands like Rolex also have a sports flavor to it, but it is still seen as the watch for ‘old money’, whereas TAG Heuer is preferred by ‘new money’.

II. PROBLEMS IDENTIFICATION

The major problem is the lack of brand equity in Hong Kong. TAG Heuer must confront this by establishing a clear positioning. After successfully achieving this, TAG Heuer will have a more stable ground in entering into the China market.

III. ASSUMPTIONS

The upscale watch market in Hong Kong is in a growth period, so now is an ideal time for repositioning of TAG Heuer

Ever-present market for watches because people will always need and buy watches

Potential watch buyers are willing to spend higher amounts on watches because of the enhanced image appeal

IV. MARKETING OBJECTIVE

Financial expectation – the breakeven analysis; TAG Heuer will be able to make a steady profit by the second year

To position the TAG Heuer brand as the distinct luxury sports watch in the Hong Kong market

To gain market share in the Hong Kong upscale watch market

To enter the China market upon establishing strong position in Hong Kong

V. TARGET MARKET

TAG Heuer Hong Kong has divided the market segmentation into the leading target market groups. The categorization reflects the differences in marketing strategy that will need to be used to target each different market.

Age 25-40

Men and women

Passion for design and fashion

Competitive personalities who aim to be successful in monetary wealth as well as personal achievements

International outlook

Avoidance group opposed to brands like Rolex (‘show off’s’)

VI. POSITIONING STRATEGY

Brand identity: The Luxury Sports Watch

o TAG Heuer is not just an expensive sports watch to symbolize success, but it is the sports watch of choice for those who thrive on competition

Untraditional yet draw inspiration from traditional heritage

o TAG Heuer is modern, yet it does not forget its roots

Brand values: prestige, performance, precision

o Prestige represents success

o Performance represents both product quality as well as the achievements of the consumers

Worldwide brand, local commitment

o TAG Heuer will be linked specifically to Chinese sports

VII. MARKETING MIX STRATEGY

TAG Heuer’s strategy is to serve niche markets of the entire watch market. It will capitalize on the innovation of timekeeping technology and the attributes and qualities that go beyond the domain of sport – competitiveness. There is an untapped market who wants a product to show not only monetary success, but personal quality of competitiveness as well. Our strategy will touch this market.

Product

Luxurious, high-quality sports watches

Modern, simple design

Attentive pre- and post-purchase customer care

Product life cycle – introduction/growth stage

Product line decision – male and female lines

Bundle of benefits – timekeeping, professional sports characteristics, symbol of success, personal quality of competitiveness

Price

Prestige pricing – high pricing to promote the quality and prestige concept
as purchasing motivators

Perceived Value = Perceived Worth – Perceived Price

TAG Heuer’s positioning will help enhance perceived worth

Product line pricing – adjust according to existing TAG watches

Place (Distribution)

Selective distribution

o Consumers are prepared to shop around for a particular watch brand

o Upscale department stores – Lane Crawford, Seibu, Sogo

o Local one-shop – David’s Watch in Central, etc.

o The TAG Shop – ideal location is The Landmark or Pacific Place

TAG Heuer Hong Kong Subsidiary

o Horizontal channel structure

o Direct distribution to retailers

o Enhance brand guardianship

o Periodic workshops/seminars for retailers

Promotional Mix

Advertising

Advertising Objectives

o To inform consumers that TAG Heuer is the luxury upscale sports watch for those who desire to show their success and thrive on competition

o To persuade consumers the differentiation from competitors and that TAG Heuer has benefits that are superior to competitors

o To remind consumers that they have made the right choice and encourage them to stay loyal to a brand

o To reassure retailers’ confidence in TAG Heuer brand

Advertising Budget

o Amount spent on advertising should be relevant to the potential sales impact of the campaign

o Require larger advertising budget to help build awareness and brand equity

Advertising Concept

o Meaningful, distinctive and believable

o Chinese element – starring celebrity Jet Li and Chinese martial arts sport

o This concept will later help TAG Heuer enter the China market

Advertising Media

o Reach, frequency, impact

o Upscale lifestyle publications

o Television

o Billboards

o MTR

o Internet

o Upscale event program guides

Sales Promotion

Limited edition models

o Available only in small quantities

o Limit its production of certain models from time to time

o Create a ‘premium’ demand and trend for collection of limited edition TAG timepieces by the consumers

o Satisfy the consumers who want to differentiate themselves from other TAG users

o Create friendly competition between customers (retailers)

Public Relations

Event sponsorships (as sponsors or organizers)

o Chinese oriented sports – kung fu, dragon boat, tai chi, etc.

o Consistent with TAG Heuer’s positioning

VIP events

o VIPs, customers, press

o Presence of Jet Li

o Product showcase

TV sponsorship

o World time related

o Competition related