Swatch: Advertising and Young Adult Segment

Swatch has uniquely pioneered the low cost fashionable watch market by combining fashion, style, and Swiss technology. It sells watches, various accessories and apparel primarily to teens in the U.S. and young adults in Europe. As pressures from competitors increase Swatch should focus on its core business and expand on its ability to provide a unique product to the fashion conscious person. Swatch's customer segments and perceptions in the US are different from those in the European markets. Perceived as stylish and durable in the U.S. its main customers are teens and pre-teens, while in Europe its fashionable qualities attract the young adult segment. (U.K market 70% 18-34 yrs). Its competitors are basically "copy cat" and provide almost "identical" low cost alternatives. Their flooding of the market is accelerating the "fad" status for the product created by Swatch and can potentially minimize its life and that of Swatch. Swatch needs to break out from the competition and re-position itself in the U.S market. It needs to focus on expanding its U.S customer base to the young adult segment (18-34 yrs.) while retaining its core customer base of teen/pre-teens in U.S and the young adults in Europe. The U.S. is responsible for more than 40% of worldwide units sold from 1983 through August of 1986. This young adult segment in the U.S. is practically untapped, more affluent and has the ability to pay a higher price for what is fashionable. Swatch should develop a new slightly more expensive product either by itself or by partnering with firms that can highlight and address the young adult segment's needs while maintaining the qualities that allowed Swatch to generate name recognition in its first to market venture. Examples would be thinner, lighter, sports-oriented watches co-produced by companies such as Nike or Adidas or a more conservative, not so colorful watch designed for the urban professional with designs from Calvin Klein etc. These new products