Chapter 10: Product Concepts

TAG Heuer, a global brand, known across the world for their sports wristwatches, have a variety of items aside from watches, including cell phones, leather jackets, and sunglasses. As stated in earlier in my blog, TAG Heuer can only be found at certain locations, at TAG Heuer boutiques and at Authorized Dealers, such as Lord & Taylor and Tourneau.

This is one of the reasons TAG Heuer is considered a speciality product. For a company that sells over 1 million watches a year, there are not as many Authorized Dealers as you would think. TAG Heuer has a reputation to maintain, and AD's are selected after being deemed "worthy" of carrying their product.

When going through the consumer decision making process, especially for an item that will run over $1,000, people are very selective and go through their process before making a luxury purchase.

The general consensus is that TAG Heuer is the powerhouse in the sports watch industry. In my opinion, there is no question, with the vast amount of product available in that category. Though TAG Heuer specializes in sports wristwatches, they have a variety of product lines to suit an individuals needs.

The Formula 1: A sports watch starting at $1,100, inspired by Formula 1 racing. The watch features a coated Titanium-carbide rotating bezel - offered in different dial colors - rubber strap or bracelet - for both Men and Women.

The Aquaracer: A watch designed by divers for divers, water resistant from 300M to 500M. From $1,700 - many different variations available - for both Men and Women.

The Link: What TAG Heuer called the "Elegant Sports Watch". The collection consists of watches that are verstaile, ones that can be worn with both business and casual attire. Starting at $2,000 - many different variations available - for both Men and Women.

The Monaco: The First Square Waterproof Sports Chronograph watch, made famous by Steve McQueen. One of TAG Heuer's most unique and popular watches, among sports and watch entusiasts. Starting at $3,000 - many different variations available - for both Men and Women.

The Golf: A less popular line of watches made by TAG Heuer. Promoted heavily when Tiger Woods first signed on with TAG. Only one titanium model currently in production, at $1,900.

The SLR: A watch created through a relationship between TAG Heuer and McLaren Mercedes-Benz. Very sporty chronograph watches, for the racing car enthusiast. Starting at $4,500 - many different variations available - for Men only.

The Carerra: What TAG calls "the contemporary sports watch inspired by motor racing". Starting at $2,000 - many different variations available - for both Men and Women.

The Grand Carerra: TAG Heuer's most exclusive line of watches. For the person who wants a higher-end sports wristwatch. In this line you will see watches ranging from $4,300 to over $20,000.

Of course, all of these watches come with TAG Heuer's International Repair Guarantee.

Chapter 18: Sales Promotion and Personal Selling

Advertising is the key to introducing and exposing a product to the public, and while sales promotion can do the same, though its goal is short-term and direct - sell now!

We all open up the paper Sunday morning and see tons of coupons inside. We see coupons for cereal, electronics, and supplies. What is scarcely available are coupons for luxury items, especially luxury timepieces. The fact is, stores such as Saks Fifth Ave, Bloomingdales, and Lord & Taylor have sales, almost on a weekly basis. Inventory turnover is crucial to stores, such as those, whose inventory is completely different from one season to the next. Of course, there are always those "exceptions". The fine print below excluding exclusive designers and ultra high-end product, almost always including luxury timepieces.

Walk into a TAG Heuer or any other watch boutique and they all have one thing in common(besides watches) - They do NOT discount. Most high-end companies believe discounting de-values their product. The belief is that the consumer has no reason to believe they are buying a product priced at $5,000, if the watch is consistently being discounted for 50% off. The consumer feels the product is $2,500 and not $5,000, tarnishing the integrity of the product.

Only a year ago, you would see a TAG Heuer selling for up to 40% off - that is until TAG Heuer lowered their discounts to dealers and implemented a new rule stating that dealers are forbidden to sell any of their active product for more than 25% off.

TAG Heuer watches, depending on the model, can generally be purchased for 20% off at a local Authorized Dealer. While TAG might prefer 0%, I am sure they have come to accept the fact that discounts are a part of the shopping experience and generally a help in exposing their product to consumers who might not have bought a timepiece from their company otherwise.

While there are no venues that offer timepiece personal shopping, I highly recommend stores such as Tourneau to view over 100 brands on display. While their salespersons have a bad reputation, they have a couple of veterans willing to help out a new consumer. Most look for the quick commission, but some believe in relationship selling. They not only look to make the sale, but make you into a client of theirs for the future. They will guide you throughout the store in helping you pick the right timepiece.

Chapter 17: Advertising and Public Relations

While not the biggest advertiser in the U.S., TAG Heuer consistently ranks in the top 5 Swiss Watch advertisers every year. In 2010, TAG Heuer ranked 3rd in the Swiss Watch Industry and 4th overall, with only Rolex, Breitling, and Bulova ahead of them. Their advertising strategy could not be more different.

TAG Heuer, without question, has had the most brand ambassadors within the watch industry over the years and their main objective is generally to promote their brand through watch advertisements. TAG Heuer is known for product advertising, focusing on a specific series of watches in each and every ad. While most throw in a picture of their product and promote it solely , TAG is known for their somewhat unique advertising campaigns.

Take a look at the following pictures:

Here you see two different, but similar advertisements with the slogan "What are you made of?"

The advertisement on the left features Uma Thurman with a straight-on picture of the TAG Heuer Link Diamonds and the other featuring Brad Pitt with the TAG Heuer Carrera Tachymetre.

This advertisement can mean something different to everyone, but I see something in common here - two successful actors wearing a TAG Heuer. They are successful in their industry and they wear a TAG Heuer. What do you do and what are you made out of?

This advertising campaign has been running since 2002, featuring celebrities and sports icons such as Tiger Woods, Lewis Hamilton, Steve McQueen, Jeff Gordon and Leonardo DiCaprio, among many others. TAG Heuer states that the advertising campaign's key concepts are "sports inspiration, avant-garde watchmaking, sophistication and identification".

These advertisements feature people some of us admire. We see Leonardo DiCaprio holding the watch in his hand, and want to be just like him. What I love about these ads is the simplicity of them. They promote their product gently, without throwing an oversized picture of the product and their logo and expecting you to just go out and buy it. They know that in using this particular advertising appeal, they are reeling us in, in using someone we might look up to or want to be like.

Aside from this particular advertising campaign, you might see an ad such as this:

The advertisement speaks for itself. It tells the consumer that they've been in business for 150 years, while showing the advancements that have been made from 1860-2010, starting with the traditional(and popular at the time) pocket watch and ending with a current TAG Heuer Carrera model.

While different companies use different mediums to promote their product, you will find TAG Heuer advertising in newspapers, magazines, online, and in outdoor media. Specifically, you will find TAG Heuer advertisements in newspapers such as the Wall Street Journal, in many sports and luxury lifestyle magazines such as GQ and Robb Report, as well as in a big billboard while driving your car down I-95.

Advertising is why TAG Heuer is one of the most well known wristwatch companies. Without the constant reminder of who they are, or the promotion of newer products, they would've never been able to sell the amount(1,000,000+ annually) that they have, year in and and year out. With a great marketing team behind them, they are a force in the industry and will be one for many years to come.

Chapter 15: Retailing

TAG Heuer is one of the most heavily traded Swiss timepiece companies, with distribution spanning over 6 of the 7 continents. As a member of the powerhouse conglomerate, LVMH, location of where their items are sold is vital to the company's future and name. The location must go through a rigorous process before being deemed worthy of carrying their luxury line of wristwatches.

Where can you find TAG Heuer watches? TAG Heuer watches are sold through Department Stores and Specialty Stores. In New York City, for example, you can find TAG Heuer being sold at Bloomingdales, a chain of luxury department stores, Wempe Jewelers, an Independent chain of Jewelry and Watch stores, and Tourneau, a Specialty Watch store carrying over 100 watch brands; among others. These stores are considered ADs or "Authorized Dealers" of TAG Heuer. TAG does not currently have Authorized Dealers to sell their product online, although it is fine for the ADs to sell or show product through their store website - all others selling their product are doing so without the permission of TAG Heuer. TAG Heuer is also sold through their company boutiques. Currently there is 1 in the U.S., located in Las Vegas, NV.

Buying a TAG Heuer watch can be a different experience in each and every location. On Saturday, I decided to visit the Tourneau location in Columbus Circle, to get a firsthand feel as a new consumer interested in TAG Heuer.

I was greeted by a salesman named Adam. He seemed very knowledgeable in watches, in general, but not so interested in TAG Heuer. I started out by asking him to try on the Grand Carrera Calibre 17, which retails at $8,000. Adam was very friendly as I looked at the watch and we began chatting about watches as well as a future cruise my girlfriend and I are taking this winter, which just so happened to be at a place Adam resided in for 3 years. After about 5 minutes, I then asked him if he could take out another watch, the same watch with a mixture of gold and steel. I proceeded by asking which watch he thought looked better as well as which watch he felt suited me the most. He gave his opinions, which were a little biased, but appreciated. There was no question the original watch suited me, but as a middle aged man, his tastes were geared towards the yellow gold. I then proceeded to the IWC section of the store, where he began showing these watches enthusiastically. A sign this was a brand he liked and one he had knowledge in. After trying on a couple, I thanked him and walked around the store for another 2-3 minutes looking at the displays and cleanliness of the store. Needless to say, the store itself got my approval although I felt the salesman could have educated me a little more in guiding me through the process of buying a watch from the name brand I originally came in to look at.

Watch companies are actually aware of such behavior, hence the openings of many brand boutiques on Madision Ave, such as Vacheron Constantin, Hublot, IWC, FP Journe, as well as many others who have opened up a base in Midtown over the last 10 years. They feel their brands are not being sold or pushed properly when among so many others, which is one of the reasons why they prefer stores dedicated to their brand solely. If you go to a brand boutique, they want to educate you and impress you with every intricate detail, that even if you have no interest in buying their product, you will at the end of the day. Although there are no current plans to open a TAG Heuer Flagship Boutique in NY, I'll be expecting their arrival over the next 5 years.

Chapter 6: Consumer Decision Making

With the average TAG Heuer exceeding $1,000, extensive research is conducted before purchasing a timepiece from the company. For my 24th birthday, I decided to buy a sports timepiece that I could wear on a daily basis. Here I'll describe in detail my personal process before making my final decision to buy my present.

Before buying my TAG Heuer Aquaracer, I not only examined the watch carefully in person, I weighed my options.

1. Do I need the watch?

The answer to that was quite simple - No.

A luxury item is never a necessity, but generally a want.

2. Do I want the watch?

Absolutely. My goal was to find a sporty timepiece that I felt was the best bang for the buck, while still buying a product of high reputation and quality.

3. Are there any other watches I can look at?

With my price range approximately $3,000 - $4,000, I knew I had options. I surfed the web to see what those options were. I came back with product from Ball and IWC as possible contenders.

I then asked myself another series of questions.

1. Am I willing to spend $3,000 - $4,000 on a Ball watch?

While in existence for 120 years, they have little recognition within the watch community. My thinking was that if I spend that much money on a product, I'd like to feel like the product reflects the price.

2. Do I like the IWC enough or in this case is it purely the name brand that appeals?

IWC, a watch ranging from $3,000 to over $100,000, has much more recognition than Ball, not as recognized as TAG Heuer, but a product generally categorized as "expensive", and a name brand very well known within the watch community - classified as one of the best. Their Mark XVI was the perfect blend of sporty and classy.

3. Which watch looks the price?

The Ball watch was eliminated, with the final contenders being the TAG Heuer Aquaracer 500M and the IWC Mark XVI. The TAG Heuer Aquaracer 500M variation I wanted consisted of an integrated rose gold bezel, and that became the answer for me. I went back and fourth and without solely looking at the name on the dial, the decision had been made.

Now that I had essentially chosen the product I'm about to purchase, I needed to know from an outside source if the decision I am making is the right one. Is the product worth $3,650(price at the time, now $3,850)? I began looking at nonmarketing-controlled information sources. At the time, I found reviews of the watch on watch blogs as well as watch message boards. These unbiased opinions helped finalize the deal for me. I purchased the watch after 2 months of researching and pondering and have enjoyed it ever since. I have used the same process when buying any product exceeding $500, and have been 100% satisfied each and every time!