The expensive Swiss watch industry has indeed survived because it is no longer a 'watch industry' but is now a jewellery business. How else can men show how rich they are? They need to show this to themselves as well as to others. I once bought a watch in Australia for about $1.50. The time-keeping was as accurate as any other more expensive watch. It looked quite good, but I knew that this watch was not jewellery.
CREATIVE CONCEPT
The creative concept of Swatch's Nicholas Hayek was to say that, if time-keeping was no longer expensive, it now became possible to sell cheaper watches. This was only half the concept. If the cheap watches were cheap and ugly, there would be no market so the cheap watches had to be cheap, but also cheerful and attractive. In a way, that was the key element of success.
The creative concept of Swatch's Nicholas Hayek was to say that, if time-keeping was no longer expensive, it now became possible to sell cheaper watches. This was only half the concept. If the cheap watches were cheap and ugly, there would be no market so the cheap watches had to be cheap, but also cheerful and attractive. In a way, that was the key element of success.
If the watches had a large 'design' element and were still cheap, then a person might buy several Swatches one after the other, if a new design appealed. This opened the way to repeat business. In the traditional watch industry an expensive watch used to last at least a lifetime.
STRONG BRANDING
There was still another value to the Swatch concept. This was part of the strong branding. If Swatches were known to have a strong design element, then this became part of the 'branding'. Swatches were recognisable both on the wrists and in stores. Others have tried to imitate the concept, but with less success.
There was still another value to the Swatch concept. This was part of the strong branding. If Swatches were known to have a strong design element, then this became part of the 'branding'. Swatches were recognisable both on the wrists and in stores. Others have tried to imitate the concept, but with less success.
The idea has proved to be a powerful one. But how much of that success could have been predicted? There was no model for cheap watches as great sellers. Perhaps someone would come along and make cheap watches which looked very similar to the expensive ones and so take over the cheap watch market.
There was a considerable risk: the fact that things turned out very well does not mean that the idea was an obvious winner from the start.
As important as the 'concept' was the very thorough implementation of the idea. The Swatch logo was visible everywhere. At this point in time, it is difficult to say which came first.
Did the highly efficient distribution system lead to the high sales? Or did the initial high sales lead to an effective distribution system, because everyone, sensing success, wanted to be in on the act?
SWISS COMBINATION
Could the Swatch have succeeded if it had not been known to be Swiss? This answer to this question is not at all obvious. If a Korean company had started to produce 'Swatch-type' watches, would there have been the same success? I very much doubt it. The combination of esteemed 'Swiss watch-manship' and the low price was needed for success.
Could the Swatch have succeeded if it had not been known to be Swiss? This answer to this question is not at all obvious. If a Korean company had started to produce 'Swatch-type' watches, would there have been the same success? I very much doubt it. The combination of esteemed 'Swiss watch-manship' and the low price was needed for success.
For exactly the sme reason, the idea could have faced opposition in Switzerland. Why debase the great reputation of the Swiss watch industry with cheap watches? So it is even more to the credit of Nicholas Hayek that the idea was implemented. This example illustrates the four stages of a creative idea.
1. The generation of the idea
2. The designed value of the idea
3. The acceptance of the idea
4. The implementation of the idea
2. The designed value of the idea
3. The acceptance of the idea
4. The implementation of the idea
The acceptance stage is not easy. If you are in a position to manufacture the item, then acceptance is at the level of wholesale and retail. Then there is also acceptance by the customer. When McDonald's started to serve breakfasts, the operation lost money for four years. Customers were not used to having breakfast outside the home. Then the idea caught on and it became the most profitable part of the operation.
But you need to have courage and considerable resources to stay with a loss-making idea for four years. Of course, it might have been predicted that the 'take-up' of the idea would be slow.
Normally, it is part of the creative design process that the new idea should be designed to be acceptable at all the needed levels. It is not much use having a wonderful new idea that no one wants to try.
The difficulty arises when the 'acceptance value' and the ultimate 'consumer value' are in opposition to each other. To change the idea so that it becomes more acceptable to the implementers may mean that the idea is so weakened that it is not of much value to ultimate consumer.
The consumer does not have to take risks. If there is no obvious value you do not buy. It is the implementers who have to take the risk. Will the expected value actually materialise in the market place?
Experience is the usual judgment base for taking risks. But what if there is no experience? What if the experience is contrary?
With the Swatch, the experience of the Swiss watch industry was with precision-made expensive watches. The 'cheap' notion was indeed contrary. The industry could have sat back and stayed with the expensive watches, leaving the cheaper watches to the Japanese. Most watch-makers probably did just this.
OBVIOUS ANSWER
The obvious answer to many of the questions raised above is to 'pre-test' the idea. This seems obvious but it is no always so easy or so foolproof. Could the McDonald's breakfast idea have been pre-tested? If it took so long for people to change their culture and habits, then pre-testing would have meant a four-year delay in each location. If it is a matter of setting up a production process - as for the Swatch - then pre-testing is not so easy.
The obvious answer to many of the questions raised above is to 'pre-test' the idea. This seems obvious but it is no always so easy or so foolproof. Could the McDonald's breakfast idea have been pre-tested? If it took so long for people to change their culture and habits, then pre-testing would have meant a four-year delay in each location. If it is a matter of setting up a production process - as for the Swatch - then pre-testing is not so easy.
The answer lies at the value level.
Are the offered values real values?
Can these values be delivered?
CONFIDENCE
If there is confidence at the value level then the other risks are reduced. Can values, as such, be pre-tested? This is not usually easy. There can be comparisons with similar values in other fields (like cheap airline flights) but the comparison may not be valid. You may want a cheaper holiday, but not a cheaper watch. With the Swatch the key point was 'the quartz' accuracy. Without this high-tech ingredient, the cheap concept would never have worked.
If there is confidence at the value level then the other risks are reduced. Can values, as such, be pre-tested? This is not usually easy. There can be comparisons with similar values in other fields (like cheap airline flights) but the comparison may not be valid. You may want a cheaper holiday, but not a cheaper watch. With the Swatch the key point was 'the quartz' accuracy. Without this high-tech ingredient, the cheap concept would never have worked.
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