Market Analysis
Company: EMWATCH INC. is a manufacturer and seller of multifunctional wristwatches. Its product is based on integrative technologies that enable the watch to support multiple functions such as camera, mp3 players and cell phone in addition to providing the traditional function of a watch – telling time. The company relies on the uniqueness of its product to compete in the mid-range wristwatch market. The design of the product as well as its marketing strategy is developed personally by the company’s top management. The company’s mission and vision statements focus on adapting state of the art technology for their products and always giving customer service top priority. The company’s USP is its feature laden product that is being sold at prices much lesser than that of competitors, allowing consumers access to the functions of several devices in one product at a fraction of the price. With the global wrist watch industry having growing by 22% between the years 2009 and 2010 , the company is seeking to promote its product in the market and increase its market share.
Customers : EMWATCH market consists of tech savvy consumers of all ages, male as well as female, across geographies. These customer have disposable income which they prefer to spend on the latest technological gadgets. The target audience belongs to the middle class that seeks to buy high end products but can be influenced by competitive prices. EMWATCH will appeal to such customers who would opt for a watch that offers much more than the traditional time telling function.
Competitors: The global wristwatch industry has several manufacturers offering a vast range of products catering to a varied audience. EMWATCH falls under the middle segment of watches, wherein products range between $50 and $299 in price. The major competitors for EMWATCH will be Japanese watch manufacturers Casio and Swiss watch giant Swatch. Casio manufactures technology based watches with a sporty design that appeals to the urban youth. Its target market segment is middle class men and women, similar to that of EMWATCH . The main product competing against EMWATCH is Casio’s GShock, BabyG, Edifice and Pathfinder range that contain several features in addition to time telling. Other Japanese manufacturers offering similar products are Seiko and Citizen. Japanese watch manufacturers also focus on competitive pricing in order to gain a bigger market shared when compared to their more expensive Swiss counterparts. Swatch offers a watch that has dial features a calendar displaying the day of the month, scratch-resistant dial window protects from daily wear and tear, adjustable wristband, quartz movement and is water resistant up to 100 feet (30 meters). They sell this watch for $199 dollars. Swatch caters to the upper middle class segment who, in addition to technology, prefer fashionable designs and are brand conscious . EMWATCH is only $75 dollars and comes with accessories. A ten year warranty is also included as part of the product servicing. Competing watches only offer a two year warranty.
Conditions: The middle wristwatch market is highly competitive with several industry leaders vying for a greater market share. Most prominent competitors of EMWATCH such as Casio and Swatch have been competing in the market for several decades and have hence built a steady consumer base and brand image. The following is a SWOT analysis of the key conditions under which EMWATCH will be competing in the market.
Strengths
Uniqueness of product: EMWATCH contains most features that can be found on a modern cell phone
Competitive pricing: The watch is priced much lower than the products of its competitors. This will be a major selling point as consumers will get great value for money
Promotional pricing: The companies various schemes such as regular discounted sales and payments on monthly installment plans further improves it competitiveness
Warranty: The EMWATCH is covered under a 10 year warranty whereas its competitors offer only 2 years.
Weakness
New product: In an industry saturated with competitors with tremendous repute, EMWATCH will struggle as a new market entrant
Small organization: Compared to its rivals, EMWATCH is a very small company which will reflect poorly on its supply chain, operations, cost of production, financial stability and marketing initiatives
Substitution: The features that the EMWATCH offers are already available as part of most cell phones today. Hence, although the product may be unique in the wristwatch market, its features are commonly available in cell phones, a device that almost every urban consumer will own
Usability: Considering the small size of the product, consumers will find it difficult to use features such as internet surfing, while the images appearing in the screen will be very small
Compatibility: The EMWATCH will need to be compatible with a host of technological accessorize, often from different brands. This would include data transfer devices such as USB drives and SD cards
Opportunity
Technological demand: Consumers are always on the lookout for fresh technology and convenience. EMWATCH can tap into this growth by innovating I product offering regularly
Wider market segment: Consumers of all demographics are interested in and use technology today. Hence, the scope for the EMWATCH will not be limited to a particular age group or gender
Social marketing: Modern day marketing greatly utilizes social networking. If EMWATCH can generate a positive buss from its initial consumers, the demand could easily rise as goodwill is built through word of mouth
Threat
Technological adoption: The features being offered through EMWATCH can easily be reproduced by its competitors. Considering the market presence and efficiencies in production, operation and supply chain of pre-existing companies, this could spell disaster for EMWATCH if it has not attained a reasonable customer base
Brand consciousness: Consumers in the wristwatch market tend to be brand conscious and only purchase reputed brands, even if it means paying more for a product with fewer features
Service centers: Consumers would prefer to have local service centers where they can take their watches for maintenance and repair. Considering that EMWATCH has very limited global presence, this would greatly inhibit its reach
Market Segmentation
Segmentation Criteria: The EMWATCH is a technology based product and hence the first consideration when defining its market segment would be the ability of consumers to use technological devices. Secondly, the EMWATCH relies greatly on the pricing of its products to motivate consumers to buy their products instead of rivals. Hence, the market segment would need to be price conscious in order to be influenced by cost effectiveness of EMWATCH.
Segments: Considering the segmentation criteria mentioned above, the EMWATCH’s target audience would be middle class urban consumers. This segment would have disposable income but it would be limited and hence they would consider the price of products before making purchases. The consumer base would be mainly urban, ranging from teenagers to middle aged persons as these are more likely to be aware of and know how to use the technological features of the EMWATCH. Gender will not impact the segmentation of the watch as it has been designed keeping in mind the preferences of both men as well as women.
Attractiveness Analysis: The middle wristwatch market is moderately attractive. As the global demand for watches is witnessing a surge after consumers had virtually stopped using watches for over a decade , there is scope for EMWATCH to find a footing among consumers. Based on the experiences that consumers have after buying the product, the company could develop a brand name enough to consider expanding its operations and product offerings. However, this would take time and, in the mean time, the revenues generated and market share captured will be minimal. The highly competitive nature of the market gives way to several risks which moderate the attractiveness of this market.
Target Market:
Geographic: The EMWATCH targets to most countries that is around the world. These are some of the countries that the target to. Afghanistan, Belgium, Brazil, Argentina, Canada, Aruba, Australia, China, Cuba, Demark, Egypt, France, Finland, Germany, Ghana, Greece, India, Ireland, Italy. It is able to reach all over the world as its products are being sold through the internet offering global delivery. However, the company would want to focus on countries with larger middle class populations. This would include Asian countries such as India as well as Eastern Europe and North Africa.
Demographic: It targets to the young adults and middle aged individuals who are between the ages of 15 to 55. It targets middle class individuals. The watch satisfies their needs and wants. These potential customers are people that need to have the features that the watch offers such as being able to take photos of their friends or coworkers at certain functions, relaxing on the train and listening to music. Having the luxury to browse the web or make an important phone call. It also targets business people who have conference meetings to attend. They can use the watch to recorded meetings. They can use the recorder to record important upcoming dates.
Psychographic: EWATCH basis the consumers psychological, personal traits, lifestyles or values. They use the VALS segmentation model to marketers to individual consumers by their life orientation, occupations, innovation, self expressions and their attitudes and social change. An example of how EMWATCH customized to the customers culture is to produce different styles of the watch to draw attention to different customs. EMWATCH designs the band for the colors of their country.
Product Positioning
The EMWATCH has positioned itself in the market as the most efficient timepiece ever built.
A lifetime warrantee has been placed on all parts, with a guarantee that the parts will last for at least 40 years. If the parts do not last 40 years they are replaced free of charge and EMWATCH will pay for the postage. The steel look runs throughout the entire watch, beginning at the silver toned dial and sub dials and continuing to the case and bracelet. The delicately molded look adds sophistication and class. Significant product features include its stainless steel case, silver dial, stainless steel band, and quartz movement, and sapphire, scratch resistant crystal. In short, EMWATCH positions itself as the right combination of looks, technology, reliability and cost effectiveness.
Impact on the Consumer
Perception: Watches have been traditionally used as mere time telling devices. Once the cell phone became commonly used by people around the world, they simply used its time/date display to see the time. As a result, the demand for watches gradually declined. Today, watches have found renewed demand among consumers who see them as classic fashion statements . Watches are generally not associated with technology.
Learning and Memory: The consumer targeted by EMWATCH are tech-savvy individuals who quickly adapt to technological advancements. They are fast learners and not only do they learn how to use new technology fast, they also demand further innovation constantly.
Motivation, Personality, and Emotion: The target audience of EMWATCH is motivated by value for money as well as feature rich products. They are urban dwellers and have modern perceptions of technology and its application to traditional products such as watches and phones. Belonging to the middle class, these consumers yearn to own high end products that will showcase an elevated social standing.
Consumer Attitude Assessment: While these consumers demand value for money, they are also biased towards established brands. This can be attributed to the fact that most of these brands such as Swatch and Casio already have a social value attached to them. As a result, these consumers may choose to buy competitor products, even if they are priced higher. This would especially be true if the consumer owns a cell phone with features similar to those of EMWATCH.
Consumer Decision Process
Product: The EMWATCH is a multifunctional watch with a built in camera, mp3 player, voice recorder and command, alarm, calculator, and internet access. It has a touch screen, and gives the customer the ability to change its face by clicking on an analog face on it. It also has a built in flashlight on the side. The watch is available in silver, copper, gold, black, blue, purple, brown, orange, red and green. Consumers can accessorize it with leather straps and necklaces in silver, copper, gold, and cubic zircon. It can be worn on the wrist or around the neck. Accessories such as headphones, Bluetooth earpiece, cables for photos, and a battery charger are also included. It is powered by movement too and so requires less frequent charging and is eco-friendly.
Place: EMWATCH has its own product website – www.Emwatch.com. Watches are exported to anywhere in the world after purchase from the website. It also available at electronic stores and hypermarkets including Best Buy, Staples, Target, B&H photo and jewelry stores depending on the models’ appeal to the store specifications.
Promotion: The product is offered regularly on discounted prices. Free accessories mp3 music download is also offered. Risk-free 30 day trials periods are offered to let customers try the product. If they decide to keep EMWATCH then the company provides a $20.00 a month payment plan for those who will qualify based on the credit history rating. The product is promoted through catalogues where famous models and celebrities wear EMWATCH. Advertising through TV, radio, billboards, social networking sites and sports events is undertaken to build brand awareness. There is a main product information, promo video, catalog and ordering website. Finally, professional sales representatives will be hired for promotional presentations and sales in the electronics stores.
Price : The watches sell at $75 dollars each. On discounted sale it is priced at $50.00. Models that are being phased out sell for as little as $30.
Service : The company offers financing options for the more expensive models and big orders. EMWATCH is environmentally friendly and recycled product. If customers need to dispose of EMWATCH after many years of use, they can mail it to the company for proper disposal of the battery and other potentially harmful components. EMWATCH INC. also takes back other watches customers don’t need for recycling purposes with a purchase of a new watch with a discount, for qualified models only.
Market Plan Assessment
Competitor Response: Rival companies may seek to add similar features to their products if EMWATCH begins to gain a noticeable market share.
Anticipated Results and Contingencies: EMWATCH’s R&D team consistently works to monitor and address developments in the technological field as well as in the market environment. Should any flaw be found, EMWATCH offers recalls and technical support. The legal department ensures that all patents and ownership is protected so that the product may not be replicated without the company’s consent. Should any other problems come to light, EMWATCH implements a customer support team that will assuage any complaints or concerns to ensure the success of EMWATCH. CNET and other electronic reviews will be scrutinized, and consumer reports will be examined to ensure quality and performance.
Forecast the future.: EMWATCH wholesale business should continue to benefit from sales of updated watch styles and from the expected launches of the new Holiday and Coltrane collections. Further growth in the company's brands in targeted international markets should also offer some downside protection against potential weakening in U.S. consumer spending. The favorable outlook for the company and the 12-month target price of $24, EMWATCH shares are attractive at current levels. The stock carries Standard & Poor's highest investment recommendation of 5 STARS, or strong buy.
RECOMMENDATION: EMWATCH should proceed with its marketing plans, albeit very carefully addressing market risks.
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