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Analytical Status Report for Bremont Watches

      Introduction

Bremont watches is a luxurious British brand that is motivated and subsequently themed based on the historical and current events in the aviation and automobile industry. The raid rise of this brand is attributed to the founders of the brand; Giles and Nick England (Stults 2012). These are two brothers who are passionate about airplanes and flying. In fact, the Bremont brand is a memoir of their flying adventure when their aircraft made an emergency landing in France on a farm owned by Antoine Bremont (English & English 2013). Owing to his legendary action of supporting the England brothers through the emergency, they decided to name their brand in his memory. The Bremont brand of watches has enjoyed consistent and significant growth in an industry that was fast declining. In spite of the current rivalry of luxury brands, the watches segment had not received much attention than it has received with the launch of Bremond brand. The reported growth and development of Bremont brand however leaves the question on its future (Barker 2013; Yelkur & Herbig 2006). In relation to this question, this business report presents a research as well as a critical analysis of Bremont brand. The second part of the report provides a strategic communications direction for the new watch, the DH-88.

      Part A: Research and Critical Analysis of Bremont Brand

      Global Industry Trends in the Luxury Watch Segment

Maillard (2016), an editor working with Europe Star offers a strategic outlook on the current and future trends within the luxury watch segment. His definition of luxury brand is complementary to Chernatony and McDonald (2013), who state that a luxury brand is any good where a rise in income generates a more than proportional increase in demand. Such goods are associated with characteristics such as high income elasticity of demand since an increase in wealth causes people to buy more of the luxury brand. In the same measure, a drop in income will trigger a drop in demand. The luxury goods market is made complex by the fact that a brand can lose its luxury value when it becomes too common thus being referred to as a normal or inferior good. The wealthy customers stop purchasing goods that lose their value. This implies that manufacturers and marketers of luxury brands have to be strategic and keen in positioning, and marketing their products (Kotler & Keller 2006). Luxury goods general have a value proposition that promises both quality and premium pricing to go with. According to Maillard, current trends across the luxury watches industry are shaped by three dominant trends; consolidation, diversification and globalization.

Consolidation refers to the growth in multinational companies owning multiple brands in various segments of luxury products. This trend drives customers into using a given brand since it offers a range of products. Globalization has led to market liberalization where existing brands are faced with intensive competition from other global luxury brands (Porter 2004). The third trend is caused by diversification where already established brands are being attracted to venture into other promising luxury brand industries. These three factors have increased the competitiveness of luxury brands industry. A complementary report shows that the luxury goods industry has been attracting a growing market size. Nonetheless, the increase in the market size and demand for luxury brands has not been felt in the luxury watches industry. This is evident with the diminishing sales reported by Swiss luxury watch manufacturers. This trend has been attributed to the negative publicity associating the use of luxury watches with corrupt politicians, tax fraudsters, drug barons, oil tycoons and high officials (Kapferer 2015). The rise in the standards of these watches have led to a shrinking market by locking out the affluent middle class. The future of the industry will thus be defined by the ability of manufacturers to lower prestigious prices to premium pricing.

      Analysis of Bremont Brand

This analysis will be facilitated by use of SWOT analysis of Bremont, PESTLE analysis and Porter’s five forces.

1. SWOT Analysis

SWOT is an acronym representing strengths, weaknesses, opportunities and threats. This tool for strategic analysis provides a simplified guide into understanding micro and macro environmental factors facing a business, project or a brand. In the case of Bremont watches, the analysis will consist:

Strengths – availability of market savvy founders who contribute in designing, engineering and manufacturing highly engineered watches. Secondly, the firm targets a niche markets through its branded watches such as pilot watches, submarine watch and military watches. The high quality of these timepieces have in turn created customer loyalty and commitment to the brand (Stults 2012). Third, the brand is highly differentiated and owns proprietary rights to some of its parts. Existing partnerships with established luxury brands. The brand has well targeted endorsements. Heine (2011) notes that the brand has a strong brand image (check figure 3) which contributes to its marketability.

Weaknesses – Bremont suffers from accusations on the lack of a British identity. Secondly, it lacks a division of duties since the two brothers are the administrators, engineers and marketers at the same time.

Opportunities – pursuing online sales through e-commerce. This will expose the product to a large customer base. Secondly, there are opportunities in advancing the use of social networking and other current approaches to marketing in order to create brand equity (Kotler & Keller 2006). Third, Bremont could pursue growth strategies such as brand extension, brand expansion and brand enterprises in order to improve its brand image and value.

Threats – intensive competition from already established Swiss luxury watch brands as supported by the three dominant trends; globalization, diversification and consolidation (Porter 2004). In addition, the diminishing market size across the luxury watch industry has threatened future profitability of the industry.

      Macro Market Analysis

1. PESTLE Analysis

This tool analyzes the external environment by identifying political, economic, social, technological, legal and environmental forces affecting a brand or a business.

Political – As supported by Swithinbank (2015), the growth of Bremont watches has been supported by its British-ness. This is a strength especially given that most watch manufacturers are based in Switzerland and they have a Swiss made label on their dials.  This implies that the government has been supportive of the growth of the industry in Britain. Equally, Britain has experiences a stable economic environment which promotes economic growth.

Economic factors – the recent exit of Britain from the European Union (Brexit) has rocked the country with economic uncertainty. However, customers still have more disposable income to spend on luxury products such as luxury watches.

Social – these factors encase consumer behavior, culture, lifestyle and other socially influenced factors that affect the marketability of a brand (Wong & Ahuvia 2008). Social factors such as increasing propensity to spend have been identified with the youths who are increasingly interested in the Bremont brand (Barber 2012). Other supportive factors include positive attitude towards fashion and luxury and youthful population around the UK.

Technological factors – these factors include the use of technology either to create barriers to entry, make purchases, marketing, and even transforming the value chain (Kotler & Keller 2006). The emergence of e-commerce promises sustainable growth of the Bremont brand. Likewise, rate of technological change in the luxury watches industry has triggered continued innovation and differentiation which contribute towards competitive advantages of Bremont.

Legal factors – legal factors dictate job related factors such as working hours, minimum wage, taxation, foreign direct investments and other legislations. The taxation legislations have been unfavorable to luxury watches industry because they are exorbitant (Banerjee & Dholakia 2012). Nonetheless, foreign direct investments have been eased to foster domestic production in Britain.

Environmental factors- there have emerged environmental challenges following industrial pollution leading to campaigns on proper waste and resource management in the luxury watches industry (Barber 2012). Companies in this industry are required to use energy and other factors of production sustainably in order to conserve the environment and natural resources.

1. Porter’s five forces

These five forces determine the attractiveness of a given industry. They include supplier power, consumer power, competitive rivalry, threat of substitutes, and threat of new entrants into the market (Porter 2004).

Threat of New Entrants - The threat of entering the luxury watches industry, both domestically and internationally is very high. This statement is justified by the low entry barriers, varied tastes among customers making it hard to achieve a strong brand preference, companies invest into PR as a marketing strategy making it easier to attract customers using premium pricing and through distribution (Banerjee & Dholakia 2012).

Bargaining Power of Consumers - The bargaining power is high because lovers of luxury watches are not risk takers. The industry has many brands where most are not established. The low brand equity contributes towards high bargaining power by customers (Buil et al, 2013). There are also already established brands entering the industry which increases competition.

Bargaining power of suppliers - Suppliers have a high bargaining power as a result of their reliance of autonomous suppliers such as Rolex-Swatch. Secondly, the bargaining power is high because of the high costs of manufacturing branded aviation relic airplane parts for the watches (Maillard 2016).

Threat of Substitute - The threat of substitute products is high because watches are accessories whose function has been embedded into mobile phones (Maillard 2016). Second, fewer people are dependent on watches since there are alternatives. Luxury watches therefore only act as fashion statements. This analysis positions Bremont brand into the brand value graph as illustrated in figure 1 (kindly check appendix).

      Part B: Strategic Communications Direction for New Watch, the DH-88

The new watch, DH-88 2016 limited edition is manufactured and marketed by Bremont Company. This timepiece targets a niche market consistent of air race enthusiasts. This watch as been inspired by the Havilland DH-88 Comet, Grosvenor House aircraft which amazed the world in 1934 air race. The watch is made to honor the two men who represented British in the air race and won. Inspired by these events, it is possible for Bremont to market this new product to the British customers and other global customers. The identification of a strategic communication direction would be enabled through a marketing analysis which will lead the process of positioning the brand, identifying its competitive advantages, analyze the current position of the brand, and formulate a fact based and value based USP (Porter 1998).

      Strategic Direction for the Watch and its Brand Position

Bremont is a young brand that has managed to establish itself as a luxury brand to a niche market. For instance, the current Bremont watch model targets a niche market composed of men and only one product line targeting women. The brand targets a market composed of youthful, energetic, masculine, and adventurous groups of customers fascinated with luxury brands and lifestyle (Wilson 2012). At the same time, the brand wants to exude its Britishness by creating affinity to British history exhibited during the air race where Britain pilots won.

      UK watch market exhibits the following characteristics.

• There has been a positive change in consumer preference for locally manufactured luxury watches
• The segment composed of mechanical watches has experienced rapid annual growth of 3% (Schiffman & Kanuk 2010)
• The UK market is dominated by Zeon Limited to which Bremont is the main competitor.

      Current Brand Position

The current marketing objectives for the new limited edition watches is to increase market share in the UK market, and trigger global awareness and brand equity and also, cement the reputation of Bremont as a premium luxury brand. Based on these objectives, the use of a new watch airplay is a strategic move towards creating awareness towards the product. It also works by cementing the loyalty of current customers affiliated to Bremont (Digital Luxury Group 2016). The current brand position can further be evaluated against the 4P’s of marketing which identify the marketing mix of a given brand.

      4P’s of the Marketing Mix

This marketing mix is composed of four elements; product, price, place and promotion. These elements interact within the market environment to give an eye view on the position of the brand within a given market. This interrelation is summarized in figure 2 (kindly check appendix).

Product - The product in question is the limited edition of the Bremont DH-88. This product uses a strong brand name associated with premium quality and pricing. It is highly functional, quality, safe and tested beyond endurance (Lamdin 2015). The brand is produced in limited editions, and engineered for modern gentlemen fascinated with military and aviation connotations.

Price - Bremont DH-88 attracts premium pricing which is lower than its competitors locally and internationally as evident in figure 1 (kindly check appendix). The product does not offer volume discounts or wholesale pricing because of its high end and luxurious nature.

Place and Distribution - The product can be sold through the physical stores located in Hong Kong, London and New York (Lamdin 2015). These are world renowned markets for luxury goods and thus, they will offer decent exposure for the limited edition. This brick and mortar approach can be backed by e-commerce platform in the near future to boost competitiveness (Gallagher & Faulkner 2012). In addition, it will reduce production costs.

Promotion - Bremont brand has heavily invested in marketing and promotions. Currently, it is approximated that luxury brands use 15% of their sales revenues to market their new product lines (Digital Luxury Group 2016). The same case is evident that Bremont which heavily relies on promotional strategies including; celebrity endorsement by sports elites and British celebrities, public relations and positive publicity through events sponsorship such as the umbrella vehicle, direct marketing, creating a sense of British nationalism, news coverage and customer engagement through social media (Heine 2011). This analysis identifies that Bremont’s new watch is likely to gain a competitive advantage because of its superior marketing mix. Already, its current brand position is strong.

      Formulation of a Fact-based and Value-based USP

USP is composed of unique selling propositions associated with a given brand. According to Haig (2014), selling propositions for luxury watches include adopting the vintage trend. This can be seen in the current strategic move by Bremont to design and manufacture a watch inspired by a 1934 air race. This watches are valued by youthful niche markets and this makes it a suitable USP. A second consideration for the USP include a strategic combination of simplicity, quality, durability and pricing (Porter 1998). These attributes are evident in premium watches such as Rolex, Omega, Cartier and Fitbit. It can also be integrated into Bremont in order to improve its market share not only in the UK but also globally.

      Conclusion

In conclusion, this report presents a research as well as a critical analysis of Bremont brand. This section is composed of an analysis of global industry trends in the luxury market in general and the luxury watch market in particular. It also contains a sub-section on the analysis of the Bremont brand using SWOT analysis. The third sub-section presents a macro market analysis using PESTLE and Porters five forces analysis. The second part of the report provides a strategic communications direction for the new watch, the DH-88. This section encases sub-sections including suggesting a strategic direction for the watch and its brand position. This is followed by an analysis of the UK watch market followed by a marketing mix analyzing the current brand position of Bremont. The last section formulates a fact-based and value based USP for Bremont’s DH-88.

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