Analysis Tag Heuer's Positioning Tactics

Analysis Tag Heuer's Positioning Tactics

1.Introduction

The purpose of this essay is to analyse how the elements of marketing mix: product, price, place and promotion, are used as tactics in Tag Heuer's positioning in the luxury watch market. Tag Heuer is a Swiss manufacturing company founded in 1860 that design and sell watches and other accessories. The brand Tag Heuer is associated with prestige, precision and performance, with the mission to promote sporting culture heritage. The slogan of Tag Heuer is "Swiss Avant-Garde since 1860" (Urde, Greyser, & Balmer, 2007). This report will firstly identify the target market and the criteria used for the segmentation. Following the understanding of the target market and market segmentation, this essay will then analyse the driving buyer behaviour. Being in the market, Tag Heuer needs to deal with the competitors, therefore identifying the key competitors and their market positions is very important to view if the positioning of Tag Heuer is competitive enough. Analysis on the positioning of Tag Heuer will be on the follow aspects: product, price, place and promotion.

2. Target market of Tag Heuer and Segmentation

Understanding the target market of Tag Heuer is very important for understanding the bran of Tag Heuer. Tag Heuer adopts demographic segmentation when identifying the target customers. As Suvi Dogra and Jean-Christophe Babin who serve as the president and chief executive officer to Tag Heuer mention in an interview with Business-Standard.com (Dogra, 2007), the target customers are those educated upscale business community, both women and men, in the age group from 25 years old to 50s. In addition, it is also the effort of Tag Heuer to make to attract the customers, who have been highly educated and are taking important responsibilities in their jobs with high income. Another important criteria that the target group of Tag Heuer has is being open to the outside word and are able to accept the innovative brand from Switzerland. Sports people that like gold or racing players are also the target customers of Tag Heuer. The target customers should pay attention to details and refinement, like the combined style of tradition and modernity and understand the quality and value in the products developed by Tag Heuer. Actually Tag Heuer owns different lines of products and each line is designed to target a specific market.

The marketing campaign of Tag Heuer is developed to reflect the characteristics of the segment. First of all, the spirit of sports shapes the advertising and events. Secondly, it promotes that people should not crack under pressure. Success is one of the key themes that Tag Heuer's promotion is related to (Dong & Haoqi, 2010). All the elements in the marketing campaign are shown in accordance to the target market segment.

3. Analysis of customers' behaviour

3.1 Influence of customers' behaviour

Customers' behaviour is highly associated with his or hers consumption decision-making and behaviour. According to Hoyer and MacInnis (2010), customers' motivation, ability and opportunity to make decisions is determined the effort in making consumption decision. Understanding the motivation of customers is necessary as it often leads to the willingness to make goal-direct consuming decisions (Bauer, Barnes, Reichardt, & Neumann, 2005). Motivation of customers is usually influence by the personal relevance of information, risk anticipation and the customers' attitudes towards the product or brands. Customers search for information about the products or brand and then associate the information with their self-identity, needs, emotions, goals and values (Söderlund, 1998). As it is shown in the customer segmentation part, the target customers are those with decent jobs and income, the investment that they put on a watch and accessory has the value to make subtle statement of their social status. By buying a product from Tag Heuer, customers bear the aim to be able to become a connoisseur that pays attention to quality and sporty lifestyle. On the other hand, the motivation of the customers is affected by the perceived risks and uncertainty anticipated when buying the product(Bloss, Schork, & Topol, 2011). The risk that customers of Tag Heuer might need to take is the financial risks considering that the price is high.

Information and knowledge is now considered to be an important factor that influences customers' purchase decisions. From the target market and segmentation analysis above, it is understood that customers of Tag Heuer are highly educated and now working at high positions, this ensures that the customers are having sufficient sourced to get information and experience of the luxury products (Balmer, Greyser, & Urde, 2009). Therefore the ability of customers of Tag Heuer is also considered to be high.

When it comes to opportunity, it indicates if the customers have the opportunity to acquire the watch. The customers of Tag Heuer usually are willing to spend the amount of money on the high emotional value provided to them through the item of luxury products (Bloom, Hoeffle, Keller, & Mez, 2006).

It is concluded that the motivation, ability and opportunity of the target customers of Tag Heuer are high. The high motivation, ability and opportunity usually result in objective-oriented behaviour, high-effort information processing and high level of involvement with the brand.

3.2 Involvement learning and decision making

The levels of involvement of customers to the products are different from various customers, which is perceived from they way they learn about the products, make their purchase decision, to used and at the end to dispose it (Shiau, Huang, & Chen, 2013). As it is discussed above, high motivation, ability and opportunity of the segment usually lead to high level of involvement to Tag Heuer. The high task-orientation characteristic is also contributing to high level of involvement of the customers.

3.3 Consumer decision-making process

The consumer decision-making process consists of four key steps and describes the entire process of how customers make the decision to buy certain products. The consumer decision-making process starts with the need recognition step. Customers identify their need for an item and in the same time developed their ideal status on the products, which might be different from the actual status. The discrepancy on how products are perceived and how they are actually understood might be different