Andromeda

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GROUP 7: Andro meda (marketing strategy)

Marketing strategy is the major aspect which helps any company to stand out in the market. It is made to sum up all efforts that focus on achieving the goals and objectives of marketing. The strategy involves selection of the target market and then formulation of the marketing mix that fulfill the demand of the targeted consumer (Ferrell; 1998, p.7-22). A successful strategy helps a company to get a grip in the market and a weak strategy may cause the company to fail in a particular market. It may also need to reposition itself if the strategy is not working in right way.

Marketing strategy of Andromeda (group 7) in the competing market:

Andromeda is a luxury watch company that has been named after the beautiful ‘Andromeda Galaxy’. The company’s strategy is to relate their watches with stars as they are bright, unique and long lasting (http://www.galaxydynamics.org). By doing this the company is trying to make its product exclusive. The watch market has seen very steady growth over recent years. Even during the recent recession there was growth of about 22% in the watch market. The major markets where this growth was seen was Europe and Asia (Mintel; 2011). Andromeda came up with different product line; they introduced two different watches for men and two for women. They also gave the consumer the option to customize the watches as per their requirements. This is the part of the strategy which made the product exclusive and unique from the other competitors. The watches have been named after the stars they are related to (http://www.galaxydynamics.org). The primary problem with this new brand is that it has got only two watches for men and two for women. This may not be enough for a new luxury brand to enter a market and attract customers due to lack of variety.

The watch market is divided in four groups; Haute Horlogeric, Women jeweler, Prestige and High Range (http://www.worldwatchreport.com/2011). They are named in the order of their price range and specifications. There is a strong growth this sector in the United Kingdom as the market value is currently 1.4 billion and is expected to reach 1.6 billion in 2014 (Euromoniter; 2010). The target area was therefore decided to be the United Kingdom. However, the luxury brand target market area is very small and competitive. It may have been better strategy to focus on other markets such as China and other BRIC nations, which have a lot of potential to grow (Insight; 2006). It may be more successful to launch a luxury brand into these expanding markets. Andromeda is trying to put itself in the prestige segment because brands in the prestige segment with the same specification currently hold the large market share. In Europe the market share for prestige watches is around 65% (http://www.worldwatchreport.com/2010). Market research shows that for lots of people, a

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high quality watch is symbol of prestige. Andromeda’s strategy is therefore to produce a high range, excellent quality prestigious watch that will last.

This is a highly competitive market with well-known brands such as Omega, TAGheuer and Rolex existence (http://www.worldwatchreport.com/2011). To be a competitor in the market, the pricing of the product was decided to be around £800 to £2000 but this may increase depending on the customisation been done (for example the addition of precious stones). This is a highly competitive price within the prestige market, which is a strong selling point for the brand. Marketing segmentation is one of the major aspects of formation of a marketing strategy of any company, which uses the differences of consumers to classify the market. There are various ways in which the market is segmented; these are demography, lifestyle, geography, behavior and many others (Beane T. P. and D. M. Ennis; 1987). The target segment chosen was men and women around 30-45 in the AB social grade. This is because a survey shows that the people aged 25-54 with AB social grades tend to buy more watches (Mintel; 2010). However, the survey also shows that people aged 45-54 tend to spend more money, buying in the luxury market (Mintel; 2010) and this particular market segment was not targeted in the marketing strategy of Andromeda. The market has a good potential growth. There is also a growing importance of female luxury watches as a market segment. As the product is more focused towards fashion this is what the consumers have been looking for. While segmentation the importance of gifting an expensive luxury watch has also been taken into consideration, as approximately 43% of people prefer getting watch as a gift than buying it themselves. (Mintel; 2010). Many people also prefer giving watch as a gift (Mintel; 2010). Positioning is also one of the major aspects of the strategy. It’s basically creating positive image in the market where the product is introduced (Ferrell; 1998, p 106). Andromeda is trying to make its image as a fashion product with emotions attached to it.

The product concept of Andromeda is a unique design of watches with exclusive function, giving the consumer an extraordinary wearing experience. The product is either gold or platinum plated with different color precious stones in it which can be customized according to the requirement (as a survey say people aging 25-44 prefer wearing precious stones rather than customised jewelry (Mintel; 2010)). However, the flaw here is as per the description it is not sufficiently unique to stand out as an exclusive product and therefore more work needs to be done on the design concept.

The launch of the product will be done just prior to Christmas as lot of people in the United Kingdom prefers buying gifts during that period and occasions such as New Year and Valentine’s Day are very close to it (Mintel, 2011). As per the plan the launch party will be at Royal Observatory which is in London and not like other brand where they introduce product in a fashion week or any sort of high profile event like any luxury watch exhibition (Mintel, 2005),

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which seems a bit dull. The idea of launching Andromeda is far too different and a bit weird when it comes to a launch of a luxury brand that to when you relate it to fashion and it’s not so effective. Many guests will be invited from different background such as goldsmiths, luxury store managers, partners of large companies, the national press etc. As everything is related to stars so the promotional strategy is to make consumer feel special by naming the star on behalf of each consumer (http://www.astrometry.org/starnaming.php). This will be a very unique way to make the presence in the market and catch the eye of customer: it is something different which may make a consumer feel special. Promotional events such as forming a brand community, giving a membership to consumer and organising events where consumers and their friends will be invited is a good way to stay connected with consumer and create a good PR. The other promotional ways of donations to observatories and offering a scholarship to PhD students make no sense as they have no relation to a luxury watch brand. Social marketing would be a better option. People tend to spend so that they can contribute to a cause and also get the desired product (Kotler; 1971, p8-12).This creates a positive brand image in the society. The other ways of advertising can be through fashion magazines or sponsoring high profile events as what the other luxury brand do (Mintel;2005). Examples of this include TAGhuer sponsoring Golf tournaments (Jardine, 2003). E- Marketing may be one of the best ways to market the product as there are lots of people using social media at present. These reach out to consumers and can help assess consumer need and want by bilateral conversation. It can also help to increase the popularity of brand in the consumer (Mintel, 2005). The brand ambassadors are the one who personality represent the product specification. Stars such as Keira Knightley and Jude Law would be chosen as the brand ambassadors of the product. They are very popular and well known stars and therefore perfect to represent the brand. The tag line of any brand makes a huge difference. The tag line of apple IPhone is ‘If you don’t have an iPhone well you don’t have a IPhone’ has a different impact on consumers mind and it makes them feel as if they are missing something. However, for a luxury brand the statement should make you feel as if you will stand apart from crowd with the product. So the tag line Andromeda is ‘Be unique, feel exceptional, Shine with Andromeda’. The tag line is perfect as it relates to emotions and fashion which Andromeda was actually aiming at.

Andromeda’s (group 7) marketing strategy based on segmentation and positioning:

In 1956 segmentation was introduced for the first time by Wendell Smith. He explained it is finding the best possible market as a result of knowing the difference in requirements of market segment (Wendell Smith; 1956, p7). It is subdividing the market in different subset of consumers behaving in same way (Bennett, 1995, p165-166) Segmentation is dividing the consumer in groups with the same priority (Corstjens, 1995), which are measurable and can be

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differentiated from the other segments in the market. It is creating a good advertising strategy by knowing consumer and also finding new opportunities in a product line (Beane T. P. and D. M. Ennis; 1987). The useful segmentation contains characters such as measurability, accessibility and substantiality (Kotler, 1980). The information used to decide something should come from customer environmental analysis. This analysis can be done through conducting well designed research. Segmentation is also divided to two different approach i.e. multisegment and concentration approach. The market concentration approach is what is been used in this particular strategy where it focuses only on the single market segment (Ferrell; 1998, p94). Without segmentation a brand cannot enter the market. There are many ways in which the segmentation can be done in the market. Here are few of them which have been implemented in the strategy formation of Andromeda:

Geographical segmentation: Over here the market is geographically segmented. The needs and demands of the consumer change from place to place. They change according to region, country, population density or climate (Beane T. P. and D. M. Ennis; 1987). So the place where there is a good market for a particular product should be chosen. As the watch market in United Kingdom is of 1.4 billion and is expected to be around 1.6 billion till 2014.This is one of the major reasons of choosing the United Kingdom. This may restrict a brand as there is a fast growing market in China and the other BRIC nations. So if those market are targeted it may give stand to a new luxury brand (Insight; 2006). For doing this it should be named under a proper British brand or an American brand which has a physiological effect in BRIC nation when it is particularly a luxury product and people opt for it.

Demographic segmentation: Here consumers are placed on definite scales of measurement which are easily understood. The information can easily be interpreted and gathered. The segmentation totally depends on age, sex, size and type of family, race, nationality, region etc. (Beane, T. P. and D. M. Ennis; 1987). The buyer’s behavior is generally closely related to characteristics of household (sen; 1976). According to the strategy the target segment is man and women between the age group 30-45. The range of age in segment is very small as compared to Mintel 2010 report shows that people aged 45-54 tend to spent more on buying the luxury watch which is not considered wile segmenting the age in the strategy. So the age group which should be target is 25-54 years men women who prefer buying luxury watches (Mintel; 2010).

Lifestyle segmentation: It is also known as psychographic segmentation. This segmentation is generally used in a luxury brand as it basically focuses on the social levels i.e. profession, income level and value and interest of a buyer. It also depends on way of living and social class (Beane, T. P. and D. M. Ennis; 1987). People aged 45-54 tend to spent more on buying a luxury watch (Mintel, 2010). Wells (1976) said it is a quantitative attempt to place consumer on a

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psychological dimensions. So as per the designed strategy the consumer targeted are those from AB social grade who are interested in fashion.

The main segment attractiveness factors which are analyzed in strategy designing are growth of market, size and competitive intensity. It helped in recognizing the growing importance of the females in the luxury watch as they are much more conscious about the luxury product than men and any luxury product make them feel special and differ from the crowd. In general this is what women look for. There is a bit gap in the watch market. So the strategy is trying to cover the gap i.e. the luxury watches are much sober and not so fashionable. So to cover up the gap and gain the competitive advantage it is aiming at that particular segment. The approach which is decided to use to the target market is focused/ concentrated. It is a single market focus where a brand sticks to a particular segment with a same product line. They normally don’t prefer to come up with a product which doesn’t suit there segmentation been chosen (Ferrell; 1998, p.7-22). Positioning is also one of the major aspects of strategy designing. Positioning is what a brand do to the minds of consumer rather than what it does to product. Every company tries to place the product in first place in consumers mind when it comes to preference wile purchasing a particular type of product (Mitra & Batman, 1989). It is designing and setting up a particular type of image in consumers mind about the brand (Kotler, 1997). When the positioning is compared with the competitor positioning it is called comparative positioning. Then it becomes as being on top in minds of consumer when it comes to preference and capturing the market. It happens when the message reach consumer in more appropriate and simplified way. A good positioning strategy helps in strengthening the brand value and image in the market. If the positioning is done in a correct way it fills up the gap in the market and gives a comparative advantage to the brand (Mitra & Batman, 1989). The Andromeda’s positioning strategy was to achieve the mind of the target. They wanted to clarify there designs and offerings in consumers mind. They relate the product to the emotions and fashion. This is how they tried to target market segment and position.

Improvement which can be made in the strategy of Andromeda (group7):

The strategy of Andromeda was good till certain extent but when it comes to practicality. There were certain things which were missing when it comes to the formation of the strategy. As the launch of a new brand there should be no loop hole in the strategy and the strategy should be firm to make a stand in the market.

The product line of Andromeda was small as compared to the other brands where there were only 2 watches. This restricts a costumer and doesn’t give them options. While purchasing any high end product customer generally look for option, if there are no option consumer will

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generally move to some other brand (Kim, 2002; p229-250). To create the positioning as a luxurious watch company in the market strategy should be something unique where they product should be launched with special edition collection or something like that. As discussed earlier the market area need to be widen up. A luxury brand cannot be restricted to a particular area if it has to make a global presence as a Brand. So at a time a product need to be launched at different areas. As the product is launched throughout the globe the brand ambassador should be according to the well-known celebrities of that particular region. The best example for this is Gillette though it is not a luxury brand but it has lot of celebrities endorsing according to areas. Finally it’s the launch plan. As it is said ‘well beguine is half done’ the launch of a product should be much more attractive than what they have now. Launching a brand in an observatory is sad when it comes to launching the fashionable brand. This will be very unattractive and they may lose the initial market stand.

Conclusion:

The major factor while developing a marketing strategy for any company should contain; Capturing marketing insight, Connecting with customers, building strong brand, shaping the market offering, Delivering value, Communicating Value and Creating long term growth (Kotler, 2008,p28). There were lot of factors which were taken into consideration, but there were also few things which Andromeda skipped like creating a long term growth and the other things. The overall ideas were good but when it comes to practicality there were many things which were missing in the strategy of Andromeda.

Appendix:

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Segmentation :

United Kingdom watches market as per the figures given above :

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Segmentation graph: Age group, social grade .

This is the graph of positioning strategy of Andromeda :

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