In her book No logo: Taking Aim at the Brand Bullies, which is partly dedicated to brands and their consumer's society, Naomi Klein had rather deal with the lifestyle of Swatch than the product. According to her, " Swatch is not about watches, it is about the idea of time”, 1999.

Her position is in line with Kevin Lane Keller’s one, “A brand is more than a product”, 1998.

Indeed, at the end of the 1940’s, companies already had to admit brands are neither only a picture, nor a catchphrase, nor a mascot; but companies had to deal with brand identity or “corporate consciousness”. Besides, the branded world approach developed by theorists in the mid 1980’s assure corporations should first produce brands, then products in order to be on the same wavelength with their customers, who had rather buying brands than products.

My friend JVS had already deal with the reasons that had prompted the Swiss brand Swatch to its enormous success (see art. 3, SWATCH A FANTASTIC STORY) but one may wonder how Swatch permanently maintains its position through its branding strategy.

First, it should be borne in mind that Swatch is part of the Swatch Group (SG), the world’s largest watchmaking company. The SG has been successful in generating a worldwide brand identity thanks to the group’s powerful and efficient branding strategy. 



- BRAND ARCHITECTURE -

Several theorists have developed architecture models related to the management and the relationship of brands but we will focus on the theory of Dr. David A. Aaker’s, who did the conceptualization of “brand architecture”. 

There are:
  • The Branded House (also called a Monolithic architecture), where all products and/or services offered by the company are using the same corporate name (e.g. Virgin Group, which have kept the same name for beverages, mobiles, airlines, hotels, etc.).
  • The Endorsed Brands, where all products and/or services offered by the company are linked together and are using an endorsing parent brand (e.g. Ritz by Nabisco and Oreo by Nabisco).
  • And what matters most to us, the House of Brands (also called a Freestanding architecture), where all products and/or services are individually branded for their own target market.

Indeed, the SG is a House of Brands, in other words, the parent of a dozen freestanding brands.
As you can see in the table below, the eighteenth brands of the SG, such as Swatch, Tissot, Longines, Breguet or Omega are together targeting and covering all segments of the horology market, from the Basic Range to the Prestige and Luxury Range through the Middle and High Range.

Category
Brand
Acquisition date
Sales in million CHF
% of total watch sales
Selling price ranges (CHF)
Prestige and Luxury Range
Omega
1983
1 325
33,9
> 1 800
Blancpain
1992
115
2,9
> 10 000
Breguet
1999
305
7,8
> 10 000
Léon Hatot
1999
5
0,1
> 10 000
Jaquet Droz
2000
9
0,2
> 10 000
Glashütte Original
2000
60
1,5
> 10 000
Harry Winston
-
-
-
-
High Range
Longines
1983
380
9,7
900 to 3 000
Rado
1983
365
9,3
750 to 4 000
Union Glashütte
2000
-
-
-
Middle Range
Tissot
1983
395
10,1
300 to 900
Hamilton
1983

138
3,5
350 to 2 000
Certina
1983
Mido
1983
Balmain
1987
CK Watch
1997
150
3,8
150 to 1 500
Basic Range
Swatch
1983
640
16,4
< 70
Flik Flak
1987
-
-
-

The branding strategy of the SG enables firms to distinctly position brands on functional benefits and to target niche segments. In this way, brands are enjoying a high level of clarity and leverage whereas if these distinct brands were restricted to the same brand, they naturally won’t be as differentiated and as successful as they are today. Thus, although they are not part of the same category, Omega (direct competitor of Rolex) and Swatch (entry of level of the SG) alone are representing more than 50% of the group’s total watch sales. 

Unlike the Swiss company, Ice Watch has no portfolio yet.
The Belgian company can neither rely on the strength, nor on the expertise and experience of its group. Indeed, Ice Watch counts a lot on its communication (including product placement particularly, but we will deal with that later). 



- BRAND MANAGEMENT -

Swatch does neither apply a differentiation strategy, nor a low cost strategy (Porter) but an “hybrid” one’s, which gathers both low cost of production and high differentiation. Beyond this strategy, Swatch took advantage of its expertise to develop new products.

In line with its motto “Always new, always different”, Swatch knows no border and has developed concentric and conglomerate diversification through new products in different industries: watch-making, fashion, electronics and even automobile!

To name but a few, Swatch has launched in the early 1980s the Maxi Swatch, which is the modern version of a wall clock (line extension: expansion of an existing product line by differentiating the nature’s product level), the sunglasses Swatch-Eyes (brand extension: expansion of the brand itself into new market), and the Smart, product of the collaboration between the Swatch Group and Mercedes-Benz (co-branding: new category).


While Swatch has tried different diversification strategies, Ice Watch just started to sell its own sunglasses, Ice-Watch Eyewear (brand extension) in 2013. As colorful as their watches, we wish them to outperform the original Swatch-Eyes, which were withdrawn from the market in 1994 because of the inadequacy with Swatch (weak control of subcontractors and high risks of poor quality). 


LH.


Sources:

Naomi Klein, No logo: Taking Aim at the Brand Bullies, Vintage Canada, 2000 
Pierre-Yves Donzé, Histoire du Swatch Group, Collection Focus, Editions Presses Universitaires Suisses
http://www.swatchgroup.com/en/brands_and_companies/watches_and_jewelry
http://www.brandchannel.com/education_glossary.asphttp://distility.com/building-brand/what-is-brand-architecture/ 
http://equibrandconsulting.com/services/brand-consultant/brand-architecture/exampleshttp://www.meltystyle.fr/ice-watch-lunettes-de-soleil-rentree-2013-devoilees-a197707.html