Victorinox Swiss Army watch carries a premium, thanks to its Swiss heritage. It does not compete in the luxury segment and being ‘bespoke’ is not what Victorinox is about. The brand stands for functionality and quality rather than being a mere collector’s item. In an exclusive interview Debraj Sengupta, CMO and Country Head talks about the journey of the brand and their future expansion plans.
While the brand, Vicctorinox, always had a strong equity for its knives and cutlery products, somehow the awareness about the brand’s watches among the consumers and trade was abysmally low. The brand faced stiff competition from well-entrenched Swiss majors such as the Swatch group and LVMH. But on the sheer dint of quality product line and a dedicated team of professionals, the brand has been able to bridge its own niche in the competitive watch segment in the country.
Entry Barriers: A typical watch store in India is less than 1000 sq.ft., in area. The retailers therefore cannot accommodate too many brands. They have to select from brands that are well-known and easier to sell. Visibility and proximity to renowned brands at reputed watch stores is the key factor for attaining success. It creates awareness as well as lends credibility to a new watch brand.
Strong brands occupy a larger space in the store. The retailer accommodates its fixtures such as floor counters, window displays and back walls. This results in shortage of space, thus creating an entry barrier for the new entrant. Most watch
MBO retailers are known to invest in established brands as they ensure faster rotation. The investment ranges from Rs10 lakhs to Rs50 lakhs or even higher for brands such as Rolex. Watch MBOs are therefore a bit hesitant to stock and invest in new and relatively unknown brands. From the year 2010 and onwards the Victorinox India; team headed by Debraj Sengupta, CMO and Country Head for Victorinox watches, have brought about a successful turnaround to their watches division.
Globally, Victorinox has adopted a conservative approach to business. The management is never in a hurry to chase numbers or gain market share. The company philosophy is to build strong relationships with its distributors and retailers.
Identifying a niche in the market
The biggest strength of Victorinox, lies in its unique product line and honest pricing. The bulk of the brand’s watches are centered around Rs 25,000 to Rs 60,000. In the premium range it occupies a sweet spot, the only other Swiss brand that falls in this category is Tissot. This gives the brand an advantage over other Swiss brands such as Rado and Longines, as they are priced higher. Victorinox is hence an affordable option and has the potential to become the first choice for a consumer buying a Swiss watch for the first time. In a fiercely competitive market the emphasis of most brands is to increase their turnover by selling more watches. This, sell more watches strategy puts a pressure on the retailer to resort to discounting and price cutting thereby reducing his earnings. The negligible presence of Victorinox watches meant little or no pressure to resort to price cutting.
Therefore, in order to encash upon these opportunities, the following steps were undertaken: has improved the visibility further.
- Creating awareness about the brand: educating retailers on the USP and the opportunity.
- Lucrative commercial terms:
- Victorinox offered a higher gross margin to the trade than competing brands. A dealer gets 5 per cent higher commission on each Victorinox watch sold. Initially, as part of its entry strategy, Victorinox offered goods on consignment basis to all its authorized retailers. This helped the brand grab precious shelf space in a retailer’s store.
- The next step was to increase consumer awareness, by communicating the brand’s values. This was achieved by adopting an India specific approach to advertising and brand building. Working on a modest marketing budget, the media plan was tweaked to include advertisements in prominent newspapers and lifestyle magazines. To improve visibility at the retail level, aesthetically designed counters, towers and LED displays were provided free of charge to each store. The company also resorted to outdoor advertising by taking up billboards at strategic locations in specific markets.
Installing glow sign boards at high traffic areas such as airports ensured visibility and awareness of Victorinox watches. This was followed up by organizing and sponsoring events to generate PR mileage and positive word of mouth publicity. Product reviews in newspapers and lifestyle magazines also helped in inducing trials.
Creating a strong emotional connect with customers:
For any brand to succeed in the market, it has to strike an emotional chord with the consumer. The presence at renowned shops alone is not sufficient. It therefore becomes imperative to attract and engage a customer by different means. The company implements different customer outreach initiatives for brand building, promotions and to generate a positive PR for Victorinox watches. This is done either by organizing events or sponsoring them. Each event is looked upon as an opportunity for the brand to communicate its values, tell its story and listen to consumers.
According to Sengupta, “It took some time and a lot of convincing (from our side) for the Swiss to approve the business plan. However, they were pleasantly surprised when we delivered results faster than their expectations. We soon became the blue eyed boys of the management.”
Most Swiss watch brands operating in India follow the international policy of branding and advertising. “I see very little India adaption or innovation in their marketing. This sets us apart from them, and gives us the opportunity to innovate and adapt to the Indian market environment. Our marketing is based on a two-way interaction with new customers. We communicate with each and every new consumer who buys a VSA,” says, Sengupta.
Giving an example, Sengupta, states, “There is also a tendency prevalent among young Indian consumers to buy pair watches. Moreover, two tone metal straps are very popular here. We therefore decided to capitalize on this learning by creating India specific art works for print advertising. Most international brands stick to a common advertising artwork. When we advertised pair watches with steel gold bracelets, the sales really picked up big time.”
He further adds, “In our quest to maintain a dialog with India’s youth we have been sponsoring events such as Business Standard quiz. It is a platform where students from 200 B-schools compete with those in industry and hopefully, learn. We have also adopted a ‘Catch Them Young Strategy’ to create an aspiration about Victorinox products among young consumers, so that once they do start earning, Victorinox remains their first choice. In his concluding remarks,
Sengupta, adds, “We are very strong in the online space and have created an Indian specific page on Facebook. By adopting Search Engine Optimization (SEO) technique on Google, we ensure that Victorinox gets a top of the mind recall.”