The luxury watches market could also been segmented according to geographic regions. Indeed, people from different regions have not the same purchase's behaviour face to this particular market, because of the local specificities as culture or purchase power. The different area could be London, South, Anglia/Midlands, South West/Wales, Yorkshire/North East, North West, and Scotland. Most of the luxury watches are bought either by a person for themselves or for another person (gift). The unit price of a luxury watch would deter much gift buying, except by the seriously wealthy or on a very special occasion.
One typical example is the 'important' birthday, or wedding anniversaries that, in the latter case, help to promote sales from the late spring onwards. Decision Making Unit: In this market, the influencer is the person who hopes to receive a watch as a gift. For example, it could be a woman who incites her husband to buy one for a special event. The customer, who buys the product, can do it for themselves or for another people. It could be the husband in our previous example. The consumer is the one who uses the product. In our example, it would be the woman.
(In fact, the consumer is often the influencer). Duration of decision-making process: We can distinguish people who do not take care of the price and who make an impulsive purchase (those for which the decision making process is quick); and other people (the majority) who think about spending such money in a luxury watch for a long time. Length of buying process: There is a minority of people who are interested in such product. But those who are really interested have already taken the price in consideration and thus buy it relatively quickly. Consumption process:
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Regarding to their high price, luxury watches are an investment for a lot of people, and that is why it is in average bought once in one's life. B-Extend of Demand: Size of market, recent trends: The market for luxury watches in the UK is worth i?? 360 million in 2001 (520,000 units), which represents a value growth of 36% in current terms of 1996. This is a slightly higher growth rate than that seen in the wider market for watches (27%) and therefore luxury watches have increased their total share in that period (to 2. 8% of volume and 54. 6% of value).
As this table shows, the UK market for luxury watches is estimated to have grown by 27% since 1996, both in volume and real value terms, although at current prices value growth is still higher. This makes the increase in average price paid still more striking, and this has been a consequence of consumers trading up from the entry level, both between brands and within the same make. According to a Mintel analysis, the luxury watches sector will outstrip sales of mainstream watches, with luxury watches increasing by 23% at current prices, which represents growth of 13% at real prices.
The younger customers are significant since levels of aspiration are at their highest among 15-24s, and this augurs well for long-term future growth. Consumers in the UK are showing greater discernment in the matters of design, style and quality, and are accordingly more prepared to pay for products that demonstrate those qualities. There seems every reason to forecast continued healthy growth for the market. Moreover, the democratisation of this luxury market is helping to promote gift purchase to male and female buyers alike. So we can expect to see continued growth in the market.
Current market shares: This table provides information about luxury watch sales as a proportion of total watch sales in the UK, and shows the relationship of the luxury watch sector to the total market. In volume terms, therefore, the luxury market constitutes a niche sector accounting for less than 3% of volume sales. By value, however, luxury watches are of supreme importance to the total market, accounting for over half of sales since 1996 C-Nature of competition: The market of luxury watches has evolved since a lot of large groups has taken smaller jeweller over to become more competitive.
For example, the main acquisitions since then have been: LVMH's takeover of TAG Heuer, Ebel, Zenith and Chaumet in 1999. The market is now concentrated into 9 main groups witch detain half of the market share, and control together 18 prestigious brands. All of the major groups have stated that they are in the market for further acquisitions, although the LMH group represented probably the last major opportunity since all the larger remaining independents have thus far made clear their determination to remain independent. The other half of the market is hold by a lot of small company.
The following table provides information about the largest groups and their market share. We can see that the age class that consider buying the more is 15-24. But in average, people under 35 years old have not the means to turn their aspirations to ownership into reality. So we can exclude these people. 45-54 is the age band where there is the more luxury watches owner. But this class do not enough consider buying a luxury watch. Indeed, regarding to this table, interest in luxury falls off sharply among the over-45s. We can also note that there is a big difference in the percentage of owners between the 35-44 and the 45-54.
This means that it is especially at these ages that people buy luxury watches. Regarding to this table, the most interesting age brand is 35-44. They are more likely on average to have the means to purchase luxury watches than younger aspiring buyers. Consequently, the most interesting age bracket is 35-44, because as said below, they will buy watches above all, and regarding this table, a good percentage of them consider buying some. As a result in targeting the 35-44 age brackets, we can be confident about our product to gain market share.
As regards to the family life cycle, we can exclude of our target pre-family and post family people, as we focus on the 35-44 years old people. Consequently we will target families, and empty nester (no family people). Moreover, empty nesters do not have to spend money for their children, and can use their income to buy products for them, as luxury watches. Families have got young children (under 16 years old), who are at an age where they do not cost too much money to their parents; and as they are two people working, they are two people earning money. The objectives are something that can be achieved by advertising.
"To get high sales" from the launch of the new brand is not an advertising objective, though it is, obviously, something to which our advertising can and should contribute. Objectives are usually the more specific interpretations of the role statement, including where possible specific targets, measurable by specific research. In our case, for the luxury watches market, our idyllically objective is to create a desire for our watch. First we want to reach the objective concerning awareness in our advertising. We want people to discover our watch, and our brand. Our product must be known by everyone in the UK market.
People even if they do not consume this product should have already heard about it, and know how high quality our watch is. In a long term our objectives will be to create a loyalty toward our product and our brand. Our potential customers are those who are already interested by luxury watches; but we want also to attract new customer, as jewel lovers, who have to become aware (thanks to our advertising) that our gold and black diamond watch is also a jewel. In the luxury watches market, people usually purchase a model of watch regarding the brand that manufactures it.
If we want our watch to be bought, people have to perceive our brand both as a luxury and high quality one, and the objective is to build a luxury brand image around our product. Furthermore, some people buy such kind of luxury watches in order to show that they have got a lot of money, more than because they like the watch. We can persuade this people that wearing our watch may be a real sign of richness. We also want to give a personality to our product so that women can identify with black diamonds (which are in new trend), in order to be fashionable.
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