Omega SA is a Swiss luxury watchmaker based in Biel, Switzerland, and is one of the most famous luxury watch brands worldwide. The company is owned by Swatch Group Limited, a manufacturer of watches and jewelry. Omega SA manufactures watches for ladies and gents and emphasizes sophisticated designs and precise production. Omega SA portfolio series consists of; constellation, sea master, speed master, and De-Ville. The Omega Brand was originally established as a family business in La Chaux de Fonds, 1848 by Louis Brandt. After his demise, his two sons Louis Paul and Cesar built the modest business to be a leading watch manufacturer. The brothers are credited with milestones such as the first mass production of the company’s caliber, the Labrador, the innovation of the first minute repeating timepiece, and the 19-line Omega caliber. The brand has made a footprint in the precision timekeeping industry synonymous with excellence and innovation. The brand has also been involved in historical events as it was such as NASA’s space program in 1965 and was used by the allied forces during world war two (Donzé 2020). The brand is the official timekeeper of the Olympic games since 1932 and is also influential in the show business world having been worn by James Bond in the spy movie franchise.
New Product Development Process
Companies remain relevant in the marketplace by developing new products in the face of maturing products. Therefore, companies must understand markets and consumers to develop products that deliver superior value to customers. The new products incorporate the user’s needs and the business objectives of the organization. The new product development process is the creation of an original product idea to market within an organization with the intent to sell to consumers. There are eight steps involved in a company’s new product development project. Idea generation is the process of searching for new product ideas based on customer wants and needs. Solving customer problems is key in navigating the brainstorming session where raw and unproven ideas are shortlisted. Ideas are generated internally through research and development, and externally through crowdsourcing and customer reviews (Kotler and Keller 2015). Omega SA’s new product development is geared towards the sports fraternity hence will involve the use of sports personalities to help in identifying factors key to athletes regarding timekeeping.
The next process, idea screening, filters good ideas from the vast ideas generated to reduce the number of new products being worked on at any one time. Companies retain ideas that will increase value to customers relative to a cost-benefit analysis. The next step, concept development, and testing is the process of developing the idea into a detailed product concept and test it with a sample population to determine its viability regarding consumer appeal. Concept development involves designing the end product from the ideas generated. The detailed product is thus presented to consumers for testing. Testing occurs after the exposure to the product through questions presented in the value proposition evaluation. The questionnaire is aimed at a focus group to determine consumer appeal and value of the concept. The main aim of consumer testing is to know the consumer reaction towards the product.
Market strategy development refers to the process of designing an initial marketing strategy for the product generated from the product concept. Market strategy aim is to facilitate segmentation of the product’s market thus incorporates focus groups, market share, price, distribution, marketing budget, projected sales, and profit markups. Business analysis involves reviewing sales, costs, and projected profits for the new product to determine its feasibility regarding company goals (Kotler and Keller 2015). Product development involves developing a product concept into a physical prototype, a task performed by the research and development unit. The prototypes undergo tests internally and outsourced quality control to determine satisfaction regarding consumer requirements. The process also involves engagements with key players in the market niche such as athletes and golfers to find out their experience with the product. Test marketing refers to the introduction of a new product in a realistic market setup. Test marketing determines whether the product will undergo large scale production or not. Commercialization is where the newly developed product is introduced into the market. Production and distribution of the product are done on a large-scale basis.
The essay’s product strategy mix is the development of athleisure aesthetic watches that are versatile in their styling and complement outdoor activities. The watch is designed primarily with Omega’s stable of athletes in mind to offer maximum comfort and resistance during sports activities. The product is based on the versatile sport-lifestyle watch, the Omega Seamaster Aqua Terra is designed for less weight and comfort. Omega sea master design is based on the original watch produced for the British Royal Navy during world war two.
The product is designed based on ergonomics regarding comfort thus incorporates new base material and new movements. Less weight is desirable while practicing sports thus the product weighs less than 55 grams making it less intrusive to the athlete. This has been achieved by using less material on the dial and removal of the date display on the watch. However, the lightness of the product does not compromise accuracy and precision. The lightness of the product is also enhanced by the use of an innovative alloy, gamma titanium as the base material for the case. Gamma titanium is commonly used in the aeronautical industry. The alloy is prized for its lightness, corrosive resistant properties, hardness, and anti-magnetic properties.
The Omega brand revolutionized the watchmaking industry with the incorporation of Co-Axial Escapement in its watches and the new product will have the same features. By equipping the sports watch with Co-Axial escapement, the product requires less servicing which can damage the watch as it reduces the mechanical constraints inside the movement. Co-Axial escapement aims to improve watch durability and accuracy by reducing the need for lubrication and hence servicing. The product offers more time between servicing an added advantage for clients.
The product is also shock resistant and can withstand a force of around 5,000 grams relative to the force of gravity at the earth’s surface. This makes the watch adaptable for active sports use in golf and sailing. The product is also water-resistant. The product’s movement is also made from titanium which adds to its lightness and reduces friction between components. The product movement has been tested and certified twice authenticating its quality and precision through third parties. First, the product’s movements have been tested by the Official Swiss Chronometer Control (COSC). The watch also has a Master Chronometer certification, approved by the Swiss Federal Institute of Metrology (METAS) which sets the highest standards in the watch business regarding precision (Donzé 2020). Quality assurance is through testing the watch and its movements through eight rigorous tests to gauge its precision.
Magnetism is the bane of mechanical timepiece accuracy that exists today. Magnets cause the watches to slow down and even stop. Everyday items such as mobile phones, laptops, and automatic doors subject a watch to magnetic fields that can affect its performance through permanent deviations of up to several minutes a day. To prevent this deviation, the movements have been lined with antimagnetic material such as gamma titanium with the capability of withstanding the highest magnetic fields. The watch is set to resist magnetic fields up to 15,000 gausses. The brand prides itself in innovative techniques thus the watch incorporates a crown that controls the movement. The crown recedes into the watch when not in use to prevent intrusion on the player’s hand. The player sets the time by gently pushing the crown where it pops. The watch is worn on lightweight fabric straps which enhances comfort thus alluding to the sense of fashion and sport.
Distribution refers to the flow of materials and information from production to end-user consumption. A distribution strategy’s main objective is to effectively manage supply chain activities to maximize customer value while sustaining a competitive advantage (Meredith and Shafer 2019). Distribution incorporates delivery and logistics, where customer order is received, and the delivery of goods is planned. Logistics involves coordinating warehouse facilities, receipt of orders, transportation of orders, and setting up a payment system to receive the funds.
Order taking is central between the parties in a supply chain and entails the details of the specification, price, payment methods, and delivery options to the consumer (Meredith and Shafer 2019). The process affects lead times since it gauges the reaction time between order placement and order delivery. Omega has 155 brick and mortar stores worldwide which are responsible for order taking and delivery of products. The company is also seeking to embrace the use of e-commerce that seeks to cut out the third party and exclusively deal in the direct-to-consumer distribution method. The incorporation of direct distribution through e-commerce stems from the increase in online sales in the brand’s largest market, China. In 2019, online sales for luxury watches in China hit the $ 7.5 billion mark influencing Omega to ramp up online distribution. This method will reduce the lead time but eliminate discounts since the consumer buys directly from the brand.
Warehouse design and management cover the storage facilities, requirements for storage of products, and activities’ automation. The significant decisions include warehouses’ location, the number of warehouses, and the building’s design and layout. Omega brands are stored in warehouses where oxygen is reduced to levels equivalent to 4,000 meters above sea level. The storage function overcomes shortages in quantities when customers place an order.
Transportation affects the price, timing, and condition of products as it involves the physical transfer of goods. The choice of transportation affects customer satisfaction due to routes chosen, fuel expenditure, and urgency consideration (Meredith and Shafer 2019). Omega drives a competitive advantage by opting for transportation that reduces shipping costs and is fast such as freight. Material handling and packaging ensure the effectiveness of the actual distribution of products. Packaging ensures minimal damage during material handling. The distribution strategy also includes information systems that involve linking up of chain partners to analyze data points collected to strengthen the logistical decision-making process.
Omega Brand has enacted global supply chain management as an essential pillar in its business model by outsourcing distributors. Outsourcing is a critical practice in global supply chain management practices where companies choose between global and local distributors. Impact on outsourcing is the ability to distribute products on a just-in-time basis thus eliminating long lead times in the supply chain. Omega has over 200 agents and 10,000 retail outlets worldwide (Donzé 2020). The outlets are established strategically in high-status areas and airports and store luxury watches for easy accessibility to consumers. The retail outlets also act as the point of reference regarding repairs and servicing.
Omega brand uses a value-based pricing strategy where the company sets prices based on the consumer’s perceived value of the product (Kotler and Keller 2015). The perceived value of a watch depends on the person donning it. Omega brand watches are associated with high quality as they raise the social status of the person wearing the branded products. The premium watches are worn by famous personalities thus ooze quality and a high social class thus fetch higher prices. Omega brands have been worn by presidents such as John F. Kennedy and royalty such as Prince Willian thus cultivating a social hierarchy effect. The value of the watch increases as people associate the product with a certain social class.
Omega targets high-end clients thus have adopted a premium pricing policy. The clients are aware of their high prices but are eager to wear quality timepieces. Omega brand watches are Swiss-made which is regarded as the epitome of quality in watchmaking thus enhancing its reputation as a manufacturer of the finest watches in the world. The company is also branded as a premium brand of luxury watches due to its continuity in operation for 170 years cementing its quality feature perception. Swiss-made watches are priced at a higher price than watches made in other countries thus Omega watches are bound to be costly. The consumer pays for the intricate engineering and design that goes into the manufacture of the watch’s complicated mechanism. The exclusive watches are also costly to produce thus the price automatically rakes up.
Integrated Marketing Communication Strategy
Integrated marketing communication is an approach by companies to brand and coordinate their promotion efforts. Firms have to utilize different channels to contact the customer regarding the product to gain a market share. Omega brand uses different methods of marketing such as advertising, public relations, and digital media to create brand awareness. Advertising is made through print marketing. Print marketing involves advertising through high-profile magazines tailored for a niche market such as wealthy readers and reputable personnel.
Digital media integrates social media platforms and websites to promote a product or a service. Examples of social media platforms used are YouTube, Instagram, and Facebook. The message is relayed by the use of audio, graphics, text, and video. The ease of internet connection translates into ease of accessibility of the information to the public. However, the digital platform is saturated with young people thus the company uses well-known lifestyle and fashion influencers with a massive following to push their ads to have a greater market reach. Omega brand promotes its products through its website in form of pictures and descriptions regarding the projects.
Omega brand uses public relations to market its products primarily through celebrity endorsements (Kotler and Keller 2015). Omega brand is the pioneer of celebrity endorsements in the luxury watch business. The company chooses brand ambassadors who are mostly leaders in their fields such as fashion, sports, and performing arts. The new product launched is a sports flagship project thus the company should choose a major player in the field such as Rory Mcllroy as the brand ambassador. Omega also ensures product placement during landmark events such as games and anniversaries. Omega brand is the official timekeeper of the Olympic games timing competitions such as athletics, swimming, bobsleigh, golf, and sailing. The company uses this platform to promote its products through engagements ensuring the brand awareness. The company holds five-star events and gives public releases to promote its products and create brand visibility for example during the Apollo II mission anniversary which is attended by many celebrities and influential personalities. The company promotion strategy for the Omega Seamaster Aqua Terra is through athletes and male actors. The sales of the product ramp-up when athletes wear the product as it creates a buzz due to the positive brand reputation.
Omega SA brand is a reputable premium watch brand with a distinguished horological history. The watches are wearable arts of work as they combine impressive craftsmanship with a stylish aesthetic. The company’s pioneering spirit has been enhanced by its achievements in anti-magnetism and its master chronometer certification further increasing the brand’s product market value. The company invests heavily in marketing to increase its brand awareness and increase its market share. In 2019, the company realized a turnover of about $2 billion, second only to Rolex luxury watch company. Omega brand product development and marketing teams are highly accredited due to their innovative technology and shrewd marketing practices.