Cartier (Hong Kong) Limited - case study.
Cartier (Hong Kong) Limited
CONTENTS
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COMPANY PROFILE 1
2 MARKETING FRAMEWORKS 2
2.1 SITUATION ANALYSIS 2
2.2 INDUSTRY ANALYSIS 4
2.3 PORTFOLIO ANALYSIS 5
2.4 MARKETING MIX ANALYSIS 6
2.5 S.W.O.T ANALYSIS 8
3 THE CUSTOMER & MARKET SEGMENTATION 9
3.1 PRODUCT ANALYSIS 9
3.2 CUSTOMER ANALYSIS 10
4 CONCLUSION 14
APPENDICES
Appendix A The History Of Cartier
Appendix B P.E.S.T Analysis
Appendix C Porter's Five Forces
Appendix D SWOT Analysis
COMPANY PROFILE
For more than 150 years, Cartier has been a creative force in the design and manufacture of exceptional jewellery, watches and accessories (eyewear classifies as accessories). Imagination, craft, audacity, and inventiveness have characterized its creations from the start - and excellence has always been its goal.
Cartier is one of the leading names in the world of jewellery and luxury watchmaking. Once memorably hailed as "The jewellery of kings, and the king of jewellers" by King Edward VII. Cartier remains today one of the world's best-known luxury brands, a byword for quality and style
The Richemont Group owns Cartier. The Richemont Group has a unique portfolio of some of the world's most famous luxury product brands that design, manufacture, market and distribute a broad range of products: jewelry, watches, pens, leather goods, perfumes, lighters, clothes and accessories for men and women (Appendix A).
The primary objective of the Richemont Group is to ensure that all its brands enjoy long-term growth in terms of turnover and profits and to safeguard and promote their reputation and integrity. Protecting the brands is one of the group's priorities. It has no intention of seeking short-term profits at the expense of long-term success.
This paper reviews the marketing strategies emplaced by Cartier's Eyewear Division in Hong Kong. Historically, the eyewear division has contributed very little to Company revenues however the products, including both sun and optical glasses, complete the Cartier accessory range so therefore are given the marketing attention afforded to all products. The current aim of the team is to increase market share and become market leader. To do this, Cartier must look for ways to increase sales in an extremely competitive market segment.
2 MARKETING FRAMEWORKS
2.1 SITUATION ANALYSIS
2.1.1 Macro Environment: P.E.S.T Analysis
The external factors that are beyond Cartier's control, that affect its planning and performance are examined via the P.E.S.T.L.E analysis in Appendix B. The conclusions drawn from the analysis are summarised below:
Political
* The relaxing of foreign investment laws in China will eventually lead to improved standard of living, greater individual wealth and therefore significant marketing challenges and sales opportunities for Cartier eyewear.
Economic
* Cartier has enjoyed significant success in Hong Kong because of the Country's extremely high standard of living, low tax rate and higher than average wage base compared to the rest of the region;
* Since the de-pegging of the Thai Baht triggered the Asian economic crisis in 1997, the bust of the tech sector in 2000 and the depression in the local housing market, Cartier must jump significant marketing hurdles to increase eyewear sales; and
* Talk of the de-pegging of the HK dollar from the US dollar adds further instability to the local economic climate and in turn, to the success of Cartier's eyewear division locally.
Socio-Cultural
* At the risk of being stereotypical, in Hong Kong your success as a person is measured by the quality of your material possessions;
* The population of Hong Kong is 96% Chinese and wear gold as a symbol of success (therefore many optical frames should feature gold); and
* The society is very 'label' conscious therefore the Cartier logo should be highly visible on the frame;
Technological
* While maintaining distinctively Cartier, conservative yet contemporary designs, technology could be used to integrate new, expensive materials (to maintain exclusivity) such as titanium and platinum into the glasses frames;
* New lens materials could be developed providing Cartier with an avenue to market specific models and designs to specific age groups;
* The advances made in optical science could be reflected in modernised shopfittings, tailored to the 'expectations' of the younger target customer; and
* Equally, the new technology could be marketed with an emphasis placed on durability of the new input materials in the frames and quality of the lenses.
2.1.2 Micro environment: 3 C's Analysis
Company
With over 150 years experience designing, manufacturing and selling designer jewellery and accessories and with a client base that includes Royalty and Celebrities, Cartier definitely retains the skills needed to market fashion eyewear. However, unlike jewellery design where individual designs the quality of stones and metals is often immediately apparent and virtually sell themselves, differentiation from competitors in the eyewear sector is much more difficult. Eyewear is a much more competitive market and the marketing implication is that the Cartier brand is not immediately synonymous with the sector therefore gaining market share is extremely difficult, meaning product augmentation is required (see Section 3.1: Product Analysis).
Competition
Cartier's premium pricing of its eyewear is essentially a growth limiting strategy because the price excludes the majority of the public from purchasing. In this case, raising the price to improve margin is not an option, nor is reducing manufacturing costs by using cheaper, low quality inputs (poor quality product), therefore Cartier must diversify into a greater range of eyewear and attract a wider cross section of customers. Cartier could consider manufacturing the eyewear from a lower cost base such as China, however their typical customer would no doubt reject paying premium prices for mainland goods (or similar).
Product diversification is somewhat of a conundrum for Cartier because they then run the risk of attracting a consumer type that may not fit the mould of the model Cartier customer. Either way, Cartier faces intense competition from rival fashion houses such as Gucci, plus the problem of forgery, therefore must devise marketing strategies in an attempt to increase market share.
Customers
The typical Cartier customer seeks individuality, style and performance from their eyewear. Most of Cartier's competitors compete across all product ranges from sport glasses to spectacles. Therefore, when faced with a purchasing decision, how does Cartier attract the consumer to their product? Cartier can get some leverage off its brand name but rarely will this be the sole determining factor in the purchase of eyewear. Marketing can play a huge role convincing the consumer before they get to the POS, that Cartier is the 'right' choice to make. The pre-sale marketing and the quality of the product at must symbolise the customers 'ideal' self in order to help them 'cut through' the 'Psychological Noise' at the POS and purchase the Cartier product.
2.2 INDUSTRY ANALYSIS
The Porter's Five Forces flow chart is contained in Appendix B with the main points summarised below:
2.2.1 Porter's Five Forces
Threat of Intense Segment Rivalry - HIGH
The eyewear industry is extremely competitive given the high number of competitors and avenues for distribution plus the difficulty in differentiating the product. Cartier compounds their competitive disadvantage by restricting sales by limiting their distribution channels. Cartier attempts to differentiate itself from its competitors through POS / After sales service, product quality, purchase experience and exclusivity through limited purchase avenues.
Threat ...
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2.2 INDUSTRY ANALYSIS
The Porter's Five Forces flow chart is contained in Appendix B with the main points summarised below:
2.2.1 Porter's Five Forces
Threat of Intense Segment Rivalry - HIGH
The eyewear industry is extremely competitive given the high number of competitors and avenues for distribution plus the difficulty in differentiating the product. Cartier compounds their competitive disadvantage by restricting sales by limiting their distribution channels. Cartier attempts to differentiate itself from its competitors through POS / After sales service, product quality, purchase experience and exclusivity through limited purchase avenues.
Threat of New Entrants - LOW
Cartier faces little threat from potential entrants given the economies of scale Cartier enjoys, its proven and established brand name and the relative maturity and loyalty of its customer base (30-65 yrs old target market). The major advantage Cartier enjoys over its competitors is reputation for quality and style. This has been built, nurtured and importantly, reinforced through marketing for over 150 years, effectively building a barrier to new entrants that might enter and try to erode Cartier customer loyalty.
Threat of Substitutes - HIGH
The threat of substitutes is very high as the luxury eyewear market is saturated with alternative products by competitors such as Gucci, Oroton and Dunhill. Cartier must know its customer inside out to keep abreast of changing customer preferences with respect to style, season, service etc.
For example, ongoing customer research could filter down into the design of a successful new line of spectacle frame, which becomes the season's new trend - the more research and resources that are directed at understanding customer preferences and style, the greater the chance of achieving increasing revenues and therefore market share.
Bargaining Power of Buyers - MEDIUM
Cartier would ever differentiate on price because this would be against everything the label stands for and is perceived by. Specifically product, positioning, physical evidence, people and place would be compromised by a price reduction strategy. Cartier faces significant competition in the eyewear market and given the relative immaturity of the segment, the majority of buyers are yet to establish a firm loyalty with the product so are more likely to be influenced by price at the POS. However, the loyalty of the customer to the Cartier brand (regardless of the product) somewhat balances the threat of buyers purchasing competing eyewear, therefore the threat is rated as Medium.
Bargaining Power of Suppliers - LOW
Threat of suppliers is minimal given Cartier has long history with supply chain management. Many avenues are actually controlled by Cartier therefore the supply is basically governed internally.
2.3 PORTFOLIO ANALYSIS
2.3.1 BCG Growth-Share Matrix
Cartier currently holds minimal market share in the eyewear sector and given the market is completely saturated with similar products, future growth opportunities appear limited. The combination of these two factors suggests Cartier's eyewear business is a Dog (see Matrix over page).
At present, primarily attributable to market competition, the capital outlay for marketing the eyewear far exceeds the revenue the eyewear products generate. Therefore, the eyewear sector is a 'loss leader'. All revenues must be reinvested to help maintain market share, which basically means the eyewear division is not self-sufficient and is detracting from the Company's profit. There appears to be little scope for an increased growth rate in the market, therefore Cartier must improve market share to transform its eyewear division into a Cash Cow.
2.4 MARKETING MIX ANALYSIS
2.4.1 P's Analysis
Cartier differentiate themselves using a combination of Positioning and Service marketing techniques; Positioning with respect to Product and Promotion and Service with respect to their Staff.
Promotion
Cartier's customers purchase predominantly through loyalty to the brand. The Cartier brand is synonymous with quality and performance so customers have very little reason to switch products. The "Cartier" brand features highly in marketing campaigns and on the actual product instilling confidence in the consumer pre and post sale.
Cartier's eyewear is advertised through different media channels enabling maximum target coverage. Importantly, the advertising campaigns reflect Cartier's image of style and sophistication and are deliberately consistent so as to not confuse the intended audience.
At the POS, the display of the product is consistent with the themes portrayed in the external marketing avenues providing the customer with a seamless transition from seeing advertising to seeing the product. Where the product is sold in department stores selling many brands of eyewear, significant attempts are made to differentiate Cartier eyewear from the competitors through the use of positioning and props.
People
Cartier's people are the customer's link between advertising and the product. It is vitally important for the sales staff to reinforce the 'subliminal' messages portrayed in the advertising (style, timeless, sophisticated etc.) and comfort and guide the customer to the purchase. Staff delivery, knowledge and performance is a direct reflection of the Cartier image therefore significant resources are devoted to staff training. Cartier's people attempt to build personal relationships with customers to try further nurture brand loyalty.
Product
Cartier has the expertise in both the design and manufacture processes to achieve differentiation on product. Expansion of Cartier's target market to 30 to 65 year olds permitted the design of more modern looking frames and the use of different shades of lens. The modern lines and colours attracted a younger more active market segment that presented new marketing opportunities for Cartier in Hong Kong. No longer were campaigns based solely around conservatives in evening wear etc. but now featured young, attractive, active people. The new designs coupled with the Cartier brand ensured the eyewear would demand attention at the POS
2.5 S.W.O.T ANALYSIS
The marketing tools used in Sections 2.1 to 2.5 have highlighted internal and external positives and negatives associated with Cartier's Eyewear Division in Hong Kong and these have been summarised below (see Appendix D for full SWOT Analysis):
Strengths
* Cartier has the capacity (economies of scale) and experience to supply prestigious, high quality products to an international market.
Weaknesses
* Cartier must frequently communicate with the 'decision-maker' to avoid an information deficit. This task requires the allocation of resources and costs that are not necessarily immediately transferred into revenue through constant or repeat sales; and
* Need to ensure that "culture difference" issues are addressed to suit the needs and demands of Hong Kong customers.
Opportunities
* The success of Hong Kong over the past century is well recognised by people in China. When marketing to the affluent individual in China, Cartier can leverage off peoples perception that those who wear Cartier eyewear are stylish and successful and are representative of the elitist society in Hong Kong.
Threats
* Cartier needs to focus on differentiating itself from the competitors in order to win market share; and
* Cartier must lobby government, probably in partnership with other Hong Kong retailers and manufacturers, to strictly police and penalise the import / manufacture of forged Cartier products, especially eyewear given numerous health and safety issues related to the use of poor lenses. Further, the policing of forgery would also help protect Cartiers 'exclusive' pricing policy. The more fake products there are on the streets, the more people are seen sporting the eyewear and the less prestigious the Brand becomes.
3 THE CUSTOMER & MARKET SEGMENTATION
3.1 PRODUCT ANALYSIS
Core product/benefit:
Optical frames and sunglasses. Therefore the main 'core' benefits are visual aid and solar protection.
Actual Product:
Classical-Elegant designs. This is to give the wearer the 'feel-good' benefit of having an eyewear to reflect the image they wish to portray. Another benefit could be that the eyewear does not have to be replaced (not worn again, due to it being "last season's")...The wearer can have a collection of Cartier eyewear that can be worn over the years.
Distinctive designs and identification through visual inserts of the "Cartier" logo onto each frame, and in the nose pads. Again, this gives the user the feel-good benefit as they associate this with perceived high quality and prestige expected from all Cartier products. The eyewear, with its visible Cartier logo, saves the wearer from having to verbally tell people of their success.
Each is manufactured using a unique technique, following strict criteria to maintain its high quality, and each frame bears a "CE" tag, which signifies that it complies with European Standards. Each also bears an identification number to indicate its authenticity. Though the feel-good benefit is again the primary benefit, another benefit could be a well-made eyewear that will retain its initial characteristics better.
High quality lenses are used, and are treated on the inner side to reduce glare. This is to provide the wearer with comfort and protection.
High quality materials are also used for its frames. This gives the wearer more comfort, and makes the frames more resistant to damage, thus, the owner benefits from not having to replace the damaged ones more often.
All frames and glasses come with a stylish Cartier case ('core' benefit) - establishing the total image and value package desired by its customers - from a marketing standpoint, creating favourable buyers' perceptions - and in line with Cartier's positioning and communication of its product quality.
Augmented Product:
Friendly, knowledgeable sales staffs are present to give 'point of sale' service that is a source of Cartier's differentiation and advantage.
Guarantees given on all eyewear. The owners will benefit from peace-of-mind in knowing that faulty eyewear will be replaced unconditionally. Cartier's website provides care instructions for eyewear, among other things.
As observed above, not all features of the Cartier eyewear are tangible. Consumers tend to see products as a complex bundle of benefits that satisfy their needs. Therefore, marketers must firstly identify the 'core' consumer needs the product will satisfy. They must then design the 'actual' product and find ways to 'augment' it in order to create the bundle of benefits that will best satisfy consumers.
Cartier is seen to compete at the product augmentation level. Sales staffs go that extra mile to make their customers feel special. This is a known and expected benefit/service when customers shop for Cartier eyewear. This of course costs Cartier money to provide such service and therefore is added and reflected in their premium prices. However, as a 'specialty product' (unique or branded product), true Cartier customers normally are prepared to invest the time/effort to buy it, and not normally compare it with a competitor's product. For these customers, price is not as much of an issue as the benefits they will derive out of owning a Cartier product - how it will make them feel.
3.2 CUSTOMER ANALYSIS
To be successful at promoting their products, Cartier must understand their buyers' behaviour, which is influenced by the characteristics of its buyers, as well as their decision process - this will influence their perception and reaction to Cartier's marketing mix. The overall evaluation and choice of brand are determined by the following factors:
* Cultural;
* Social;
* Personal; and
* Psychological.
Framework 1 - Consumer Buying Roles for Cartier eyewear
Since the eyewear is an individually consumed item, as opposed to a family consumed item such as a car, it will affect the following roles, and thus the focus of Cartier's marketing program:
* Initiator: Normally, it will be the user of the eyewear; however it could be the spouse;
* Influencer: Definitely it will come from the family members, but primarily from the spouse.
* Decider: This will likely to be the user, since it has got to feel good on their face. However, opinion can come from family members /friends.
* Buyer: Usually the buyer must be the user, since they must try on the eyewear for fit and comfort. However, the buyer could be any family member once the trial and selection of the model has already been made.
* User: This will be person who bought it for a particular need, unless it can be shared like a pair of sunglasses.
Framework 2 - Types of Purchase Situations:
Cartier eyewear could be considered to be neither 'low involvement' (routine response behavior, low problem solving required) nor 'high involvement' (extensive problem solving and information gathering required), but rather somewhere in between. Cartier customers are often loyal to its brand. New customers often compare this to other brands perceived as able to provide similar level of benefits sought after by these customers.
Framework 3 - Stages in the Buying Process:
The buying process starts long before and continues after the purchase. Therefore, it encourages marketers to focus on the entire buying process, rather than just the purchase decision .
* Problem Recognition: By understanding its customers' motivations/drive in buying its products (is it out of necessity, or it is an accessory or fashion and success statement), Cartier can identify such stimuli, and design marketing campaigns, which involve such stimuli to provoke interest in their products.
* Information Search: Customers tend to engage in more information search about products they do not buy on a regular basis. For Cartier eyewear, it is considered that customer do want to know that extra about its quality and other details. This being the case, Cartier must understand where the customers get the information from and its relative importance and influence to the overall buying decision, so as to communicate to its target audience effectively. Normally customers get most of that information from the commercial media sources, where the marketers have and can control.
* Evaluation of Alternatives: Marketers need to answer the "How does the consumer choose among the alternative brands?" question. Sometimes, consumers evaluate and use logic in their choice among brands; at other times they do not rely on anything more than impulse or intuition. However, by assuming that consumers see a product as a bundle of attributes/features that can deliver the desired benefits and satisfy their needs, Cartier can focus on the features that are considered to be the most important to its customers. Cartier could try to understand the weighting the consumers are likely to place on each features. Cartier should then combine (or stress) as many of the important features into its eyewear as it can - providing as many ideal features desirable in an eyewear by its target audience as is feasible, so as to influence their choice decisions.
* Purchase Decision: The purchase decision will normally be based on the most preferred brand and product choice. However, there are two factors which can cause the 'purchase intent' not to turn into a 'purchase decision'. The first factor is the 'attitudes of others', where another influential person, such as a close friend or family member, has a different and opposing view to the choice made. Another factor is the 'unexpected situational factors', where certain unexpected events can lead the consumer to change their choice, for e.g. affordability has decreased or the voicing of a disappointed owner of the same product. It all boils down to consumers having uncertainties and avoiding the risk of purchasing a product that does not live up to their perceived values and expectations. Cartier might try to respond with information to support and reduce this uncertainty among its target customers by giving assurances that addresses these concerns e.g. through such things as warranties.
* Post-purchase Behaviour: The buying process does not stop at the buying decision stage. Customer satisfaction (whether the product fell short, met, or exceeded their expectations) is vital to Cartier, not only for repeated business and reputation, but also verbal recommendations from satisfied customers and their endorsement of its products. On average, a dissatisfied customer will likely not to ever buy again but also tell 11 people about their bad experience; whereas a satisfied customer is likely to tell only 3 people (they are trying to reduce their post-purchase dissonance). Therefore, it is important that the promise that Cartier makes about the features (and the potential benefits of its eyewear) be not only truthful, but also non-exaggerated. People are more likely to buy again if their expectations were exceeded. Since it usually cost more to attract new customers (through the need to advertise to raise awareness), meeting and exceeding customers' expectations is absolutely vital. Cartier might have a system in place that proactively gauges and measure customer satisfaction, so as to address complaints and rectify any areas that are damaging to the overall Cartier business.
Based on the above consumer information, Cartier Eyeware targets that top segment of the market whose members are defined by the following common features:
* Desire for an image statement that mirrors and exhibits their success;
* Need for an eyewear piece whose manufacturer and whose possession carry a history of prestige and elitism;
* Appetite for a timeless but exclusive design that signifies the ultimate in style and does not easily go out of fashion;
* Age range from 35-65 age (mature users);
* High-earners able to spend between USD2000 and USD20000 in a pair of glasses.
This segmentation seems to be the same in the different markets where Cartier Eyewear operates in South-East Asia. Besides, the customers in this segment like to remain loyal to a brand than consistently supplies them with the first three requirements above.
4 CONCLUSION
The first Cartier jewellery workshop was opened in Paris in 1847. The Company expended to London in 1902 producing Art Deco jewellery using abstract and geometric forms. It was here that the first Cartier watch was crafted. By 1909, Cartier opened its first shop in New York.
By the 1920's, the Company was designing and manufacturing neck chains, rings and more using a plethora of precious metals and jewels. Forty years later, the jewellery was winning design awards and being purchased by royalty and celebrities. Product lines diversified into cigarette lighters and just about anything else that could be encrusted with jewels or pinned to a suit or blouse. The 1970's saw the dawn of the Cartier Boutiuque, which now also sold pens a line of leather goods for business, travel and personal use and in the early 1980's, perfumes and eyewear. In the same decade, the Cartier Foundation for Contemporary Art was established and jewellery and accessories continued to be diversified into many different models and branded under different names with most products having individual styling to create its own personality such as the shape of a perfume bottle.
The 150th anniversary of the Company was commemorated with limited edition pieces and the release of new lines of products, including men's fragrances. Today, Cartier is controlled by the Richemont Group and is recognised as one of the leading designers of contemporary jewellery in the world. The brand is synonymous with style, fashion, elegance and prestige. Products can be purchased in most major cities of the world through Cartier Boutiques, registered stockists and Duty Free Stores.
The Richmont Group Controls
Founded in:
Baume & Mercier
830 in Geneva
Cartier
847 in Paris
Chloe
952 in Paris
Alfred Dunhill
893 in London
Hackett
983 in London
Lancel
876 in Paris
Mont Blanc
908 in Hamburg
Officine Panerai
930 in Florence
Piaget
874 in Geneva
James Purdey & Sons
814 in London
Jaeger-LeCoultre
833 in the Joux Valley
Vacheron Constantin
755 in Geneva,
Van Cleef & Arpels
906 in New York
IWC
868 in Schaffouse
A. Lange & Söhne
845 in Glashutte
Montegrappa
912 in Bassano del Grappa
Old England
867 in Paris
Shangai Tang
994 in Hong Kong
Political
With the relaxing of foreign investment laws in China, as more money is invested in Mainland businesses, the standard of living will improve and individual wealth will soon expand exponentially. Cartier must be ready to market to the new and old money in China drawing on its experience and success in similar developing markets while at the same time, addressing the nuisances of the Chinese market. Similar situations are expected for most of the developing nations of Asia over the next decade, which will allow Cartier to market the quality and the prestige of their eyewear to previously unsuitable consumer groups. As consumers begin to understand the protection that can be provided by suitable eyewear and as more people begin to travel on holiday, the desire and demand for sunglasses / eyewear in these developing economies should also increase.
Economic
The currency markets and more specifically currency exchange rates have a significant bearing on the affordability of luxury goods. Historically, Cartier has enjoyed significant success in Hong Kong because of the Country's extremely high standard of living and higher than average wage base compared to the rest of the region and low tax rate. People earn lots of money and in turn spend it just as quickly. The times are changing however, and since the de-pegging of the Thai Baht triggered the Asian economic crisis in 1997, Hong Kong and most of Asia (with the exception of China) has never fully recovered. The bust of the tech sector in 2000 and the depression in the local housing market further compounded the situation. In the short term, there appears to be little light at the end of the tunnel for the economy and in turn increased sales of Cartier eyewear.
The core of extremely affluent Cartier customers in Hong Kong will continue to provide sales but the lack of sales growth will be concerning. As the financial situation is similar throughout the region, few prospects are immediately evident off shore. Talk of the de-pegging of the HK dollar from the US dollar adds further instability to the local economic climate and in turn, to the success of Cartier's eyewear division locally.
Socio-Cultural
At the risk of being stereotypical, Asian society is very materialistic and probably more than anywhere in the world, your success as a person is measured by the quality of your material possessions. Cartier has an excellent opportunity to increase eyewear sales by leverage off this socio-cultural idiosyncrasy and marketing to society's 'ideal self'. Key socio-cultural traits that could be targeted in a marketing campaign are:
* The population of Hong Kong is 96% Chinese and they adore gold as a status symbol (therefore many optical frames should feature gold);
* The society is very 'label' conscious therefore the Cartier logo should be highly visible on the frame;
* Affluence is associated with having free time to pursue leisure activities therefore sunglasses and tinted spectacles should be adorned by models playing 'elitist' sports such as golf and sailing, sports that are common pursuits in Hong Kong and require significant capital outlay to participate;
*
Technological
Technology could help Cartier develop strong loyalty among its younger customer base, such as the 30 to 45 year age bracket. While maintaining distinctively Cartier, conservative yet contemporary designs, technology could be used to integrate new, expensive materials (to maintain exclusivity) such as titanium and platinum into the glasses frames, giving the product a more modern look compared to the finish provided by standard materials. New lens materials could be developed providing Cartier with an avenue to market specific models and designs to specific age groups. This would need to be done delicately to avoid eroding the classic elegance and styling associated with a Cartier product. The advances made in optical science could be reflected in modernised shopfittings, tailored to the 'expectations' of the younger target customer. The fittings would need to reflect the modern styling and technology behind the product but still convey the style and sophistication of the Cartier brand.
Equally, the new technology could be marketed by extremely knowledgeable sales persons, to all customers, with emphasis placed on durability of the new materials in the frames and quality of the lenses. So rather than simply purchasing the brand name, post-sale, the customer is made to feel they have made an improvement to their health and lifestyle through the purchase of the eyewear.
Strengths
* Competent People - Cartier dedicates tremendous effort in developing and training its people. Possess the most knowledgeable and experienced staff within the market
* Global Network - Cartier operates in almost every country across the globe. Their widespread distribution networks enable the company to provide customers with the full range of products. Furthermore, its after sales service shops are located everywhere, which is easily accessible to all customers. This gives the customers them advantage over some of its competitors as it gives the customers the feeling of quality assurance (all their customers are being well looked after).
* Diversify Products' Collection - Cartier has assembled a collection of exquisite products. The comprehensive range includes timepieces, jewelry, leather and eyewear collections and fine fragrances. Not only can loyal customers groom themselves from head to toe with Cartier's products but they can also enjoy the one stop exclusive shopping experience.
* Reputable Brand Name - Cartier is a well-known brand around the world. Its luxurious image has already penetrated in most people's hearts. The brand "Cartier" helps the company differentiate themselves from its competitors, as customers are set out to buy both the core and actual products of the company.
* Strong Group Support - Cartier is part of the world's second largest luxury brands group, Richemont; which also owns exclusive brands like Alfred Dunhill, Baume & Mercier, Montblanc, Lancel and Piaget. As a member of the Richemont group, Cartier has all the support required in strengthening its brand by leveraging on the group's strong financial asset base, global network and extensive marketing experiences. According to Richemont's worldwide media director, Philippe Nettre, said: "Our objective is to optimize our media effectiveness at the ground and brand level, keeping the individual characteristics that make each of our brands unique."
Weaknesses
* Centralize decision making - Despite the fact that the Hong Kong office plays a "Regional Role" in distributing and launching of its eyewear products, the design of the optical products are frequently done aboard. This can directly influence the sale of sunglasses in Hong Kong as the "style" and "fit" may not fully caters all the needs of Asian's figure.
* Growing Numbers of Luxury Brand in the Eyewear Industry - Other well-known brand around the world can easily compete in the eyewear market as well. When forming the marketing strategy, Cartier must place more attention to differentiate its eyewear from the competitors.
Opportunities
* Opening up of the Asia Market (in particular China) - According to Richard Lepsu, Chief Executive of Cartier has extensive plans to expand its presence in China over the next few years.
Threats
* Increasing Numbers of Counterfeit - Cartier is one of the few luxury brands that are found being forged most frequently. On the balance sheet of the company, the value of the brand is on there. If the brand is appearing all over China (one of the largest fake market) but not going through official channels, two things happen. If the quality is bad, it will deteriorate the brand because everyone thinks it is a bad product. Even if it is genuine, then it signifies to the customers that the company is not in control of their brand.
MNGT 4650: MARKETING PRINCIPLES
GROUP ASSESSMENT: ASSIGNMENT III
June 2002 i
R/8059/02/1 Issue 1, November 2001 CSX World Terminal HK Ltd
