Rolex and Advertising

[Baptistman]

Ok Guys, Advertising is an essential part of marketing, correct? Most companys rely on marketing new products, via TV, Cinema, Billboards, Printed material etc, particularly when it launches a new product. So how does Rolex continue to do so well with very little advertising. In the UK the only time I notice anything to do with Rolex in real terms is when Wimbledon is on.

Whats it like in other countrys, because i'm sure most companys could not manage to gain the sales required with the almost stealth like approach Rolex takes.

[Gurmot]

Don't they also sponsor golf and sailing? Also, they used to have a regular ad in the National Geographic although I haven't looked at one for a couple of years so not sure if they still do..

Cheers - Simon

[SPACE-DWELLER]

In Denmark, you hardly see any advertising, too. There is a big "ROLEX" sign on a building on Kongens Nytorv in Copenhagen, though. I'll take a pic when I get the time.

[oneillba]

In the Chicagoland area, only billboards along the toll roads near O'Hare International Airport from various AD's promoting Rolex, Movado, Raymond Weil, etc. Nothing specifically from Rolex USA promoting the brand in a wholesale way.

[Scarface]

As a marketing academic, manager and consultant I will give an explanation of this very interesting phenomenon here.

Sorry, in advance, for the academic/technical marketing language - this is from a conference presentation of mine (with all credit and references to all other authors included).

Before the text, let me just point out that Rolex is trying to create a virtual rarity via limited advertising and, generally, very selective and restricted marketing communications.

In more detail:

"...In order to maintain their prestige, luxury brands must sustain high levels of awareness while, at the same time, controlling tightly their sales.
This is a really hard task for managers of luxuries; Catry (2003) has identified possible ways so that the expansion of sales into emerging new luxury segments remains compatible with the maintenance the of the desired scarcity. As he points out, “luxury goods companies are not selling rare and exclusive products. But, like magicians, they are adept at pretending to do so by offering an illusion of scarcity”.

While, historically, rarity has stemmed from the use of naturally scarce materials such as diamonds, gold or silver, or through the hand-made craftsmanship process where an item would need weeks or months to be manufactured and would, therefore, be unique, nowdays this is no longer the case ; instead, in an effort to reconcile differentiation with high production volumes companies are adding a virtual dimension to rarity (Kapferer, 2006; Catry, 2003) by using marketing techniques such as artificial shortages and limited series or policies such as selective distribution or an appropriately designed marketing environment.

Catry (2003) distinguishes between four types of rarity, ranging on a continuum from natural to virtual:
- Natural rarity, based on scarcity of ingredients, components, limited production capacity, rare human expertise. This type of rarity is incompatible with sales expansion and high production volumes due to limits in availability of materials or human or production constraints (e.g. Valmont’s use of rare alpine herbs to produce its high-end Swiss Cosmetics; large waiting lists for Mercedes SLK Coupé during its first years of production; an 18 years old whisky needs 18 years to be made).

- Techno-rarity, based on innovations, new products and features (e.g., first fridges or air bags). These products are not compatible with excessive production due to initial cost inefficiencies - though not as much as the naturally rare products; so, they are usually reserved to the top lines, until technology becomes massive or obsolete, when it is passed-down to more the cheaper lines.

- Limited editions or custom-made products (handmade products: some exclusive brands of Cuban cigars, originally made for F. Castro himself), and one-to-one relationship (e.g. Vuitton Graffiti bags, painted in hand by Steven Sprouse himself). Again a high volume is not attainable due to cost limits or human constraints; in addition a “pseudo-limited edition” strategy is used many times whereas, while there are no actual constraints in mass-production, a marketing hype is falsely created around limitedness.

- Information-based rarity, where the information communicated to customers creates the feeling of rarity, through a manipulation of various techniques such as playing with pricing information or creating distribution rarity . PR communication is especially suited in order to create informational-type of rarity as opposed to massive advertising. Finally, secrecy - where the ingredients or number of items available are not publicly disclosed - can contribute to an information-based rarity strategy.

Rarity creates the feeling of uniqueness which is essential to luxuries; generates consumer dreaming and an aura of illusion... It may be difficult to reconcile rarity with expanding sales, but not impossible; after all, according to Catry “luxury firms have always been experts in the art of selling illusion”.

Hope this helps

Minas

[oneillba]

Yikes, we are being bamboozled!

[Gurmot]

Yeh, that's what I was gonna say

Seriously though, this confirms what is behind the whole Daytona hype thing and looks like the motive in withdrawing the current SD before the new one is released (at a higher MRSP).

Cheers - Simon

[Trurolexer]

I think Rolex do very less advertising. Because they're already famous. I think ROLEX is the FAMOUS Brand in the watches world.

[Baptistman]

Originally Posted by Scarface

As a marketing academic, manager and consultant I will give an explanation of this very interesting phenomenon here.


Minas

That is great, even on Authorised Rolex retailers websites, such as Goldsmiths.co.uk you will notice Rolex is set asid from the other brands, in fact on the watches page they list all the brands and their insignia, but Rolex is missing.

For something like the new Sea-Dweller, is Rolex looking to sell as many as possible or creating an illusion, because apart from forums such as this, the word on the street about this watch quite frankly would be zero.

[Baptistman]

Originally Posted by Trurolexer

I think Rolex do very less advertising. Because they're already famous. I think ROLEX is the FAMOUS Brand in the watches world.

You say that, but so are Seiko, and Coca Cola for example yet they advertise openly catching the eye of most people and spend vast somes of money on advertising

[JJ Irani]

The ONLY time I get to see a few Rolex ads is on CNN Sports channel.

JJ

[Scarface]

Originally Posted by Baptistman

You say that, but so are Seiko, and Coca Cola for example yet they advertise openly catching the eye of most people and spend vast somes of money on advertising

That's right, companies such as CC or Seiko advertise heavily and sell high volume.

On the other hand, Rolex with relatively less sales (items) than Seiko still has high profit due to the huge profit margin (sales revenue - cost of product).

Now that doesn't mean that Rolex doesn't want to sell lots of items - they do. But luxury brands are different than regular brands - they need to achieve high sales without this becoming too obvious to consumers - otherwise they face the danger of "brand dilution" or the brand becoming too commonplace.

That's why as I mentioned they try to do this by making the public believe that their product is rare - while this is not really the case (of course their products are more rare than regular brands).
So, Rolex is trying to create a virtual rarity via limited advertising and exposure; and, generally, very selective and restricted marketing communications.

[Perdu]

They may not blanket bomb, but I bet they are very targetted to the potential audience

[SPACE-DWELLER]

Nice post (#5), Minas! Most informative!

[Jimbits76]

I'm with Jon, Wimbledon Scoreboard and clock is the only place you really see Rolex in the UK. Sailing and golf etc doesn't really get too much TV coverage.

Sometimes you get an ad in one of the Sunday Times supplements but that's it.

I guess word of mouth does it for them...plus you've also got 1000 or so Tossers on here always banging on about how great they are to whichever poor sod is nearest!!!!

J

[Scarface]

Originally Posted by SPACE-DWELLER

Nice post (#5), Minas! Most informative!

Glad you liked it Bo

Originally Posted by Jimbits76

...plus you've also got 1000 or so Tossers on here always banging on about how great they are to whichever poor sod is nearest!!!!

Tossers ? Erm...us ?

Nice one Jim!

[Baptistman]

Originally Posted by Jimbits76

I'm with Jon, Wimbledon Scoreboard and clock is the only place you really see Rolex in the UK. Sailing and golf etc doesn't really get too much TV coverage.

Sometimes you get an ad in one of the Sunday Times supplements but that's it.

I guess word of mouth does it for them...plus you've also got 1000 or so Tossers on here always banging on about how great they are to whichever poor sod is nearest!!!!

J

[toph]

on the same note- how often do you see ferrari or porsche adverstised or say versace or prada clothing. they dont need to- thay have what is called snob appeal. people that buy these products are not usually going to be influenced by advertising.

[Omnibus]

Originally Posted by Scarface

As a marketing academic, manager and consultant I will give an explanation of this very interesting phenomenon here.

Sorry, in advance, for the academic/technical marketing language - this is from a conference presentation of mine (with all credit and references to all other authors included).

Before the text, let me just point out that Rolex is trying to create a virtual rarity via limited advertising and, generally, very selective and restricted marketing communications.

In more detail:

"...In order to maintain their prestige, luxury brands must sustain high levels of awareness while, at the same time, controlling tightly their sales.
This is a really hard task for managers of luxuries; Catry (2003) has identified possible ways so that the expansion of sales into emerging new luxury segments remains compatible with the maintenance the of the desired scarcity. As he points out, “luxury goods companies are not selling rare and exclusive products. But, like magicians, they are adept at pretending to do so by offering an illusion of scarcity”.

While, historically, rarity has stemmed from the use of naturally scarce materials such as diamonds, gold or silver, or through the hand-made craftsmanship process where an item would need weeks or months to be manufactured and would, therefore, be unique, nowdays this is no longer the case ; instead, in an effort to reconcile differentiation with high production volumes companies are adding a virtual dimension to rarity (Kapferer, 2006; Catry, 2003) by using marketing techniques such as artificial shortages and limited series or policies such as selective distribution or an appropriately designed marketing environment.

Catry (2003) distinguishes between four types of rarity, ranging on a continuum from natural to virtual:
- Natural rarity, based on scarcity of ingredients, components, limited production capacity, rare human expertise. This type of rarity is incompatible with sales expansion and high production volumes due to limits in availability of materials or human or production constraints (e.g. Valmont’s use of rare alpine herbs to produce its high-end Swiss Cosmetics; large waiting lists for Mercedes SLK Coupé during its first years of production; an 18 years old whisky needs 18 years to be made).

- Techno-rarity, based on innovations, new products and features (e.g., first fridges or air bags). These products are not compatible with excessive production due to initial cost inefficiencies - though not as much as the naturally rare products; so, they are usually reserved to the top lines, until technology becomes massive or obsolete, when it is passed-down to more the cheaper lines.

- Limited editions or custom-made products (handmade products: some exclusive brands of Cuban cigars, originally made for F. Castro himself), and one-to-one relationship (e.g. Vuitton Graffiti bags, painted in hand by Steven Sprouse himself). Again a high volume is not attainable due to cost limits or human constraints; in addition a “pseudo-limited edition” strategy is used many times whereas, while there are no actual constraints in mass-production, a marketing hype is falsely created around limitedness.

- Information-based rarity, where the information communicated to customers creates the feeling of rarity, through a manipulation of various techniques such as playing with pricing information or creating distribution rarity . PR communication is especially suited in order to create informational-type of rarity as opposed to massive advertising. Finally, secrecy - where the ingredients or number of items available are not publicly disclosed - can contribute to an information-based rarity strategy.

Rarity creates the feeling of uniqueness which is essential to luxuries; generates consumer dreaming and an aura of illusion... It may be difficult to reconcile rarity with expanding sales, but not impossible; after all, according to Catry “luxury firms have always been experts in the art of selling illusion”.

Hope this helps

Minas

Good reading, it's so educating...I really enjoy it. Thanks