Rolex is the leader in global luxury watch industry. The Swiss brand was established in 1905, and is currently headquartered in Geneva, Switzerland. Throughout the history, Rolex has consistently delivered extremely high quality, and has maintained its exclusive brand image.
This article discusses the Rolex marketing strategy by applying 4-P marketing mix framework.
1. FAQs about Rolex
| What makes Rolex valuable? | Use of 904L stainless steel to make tough and exquisite timepieces |
| How much is Rolex company worth? | $8.35 billion (2022) |
| When did Rolex become a luxury brand? | During 1960s to 1980s |
| What is Rolex mission statement? | “to make the planet perpetual” |
Here we analyze Rolex marketing strategy by evaluating all four marketing components- product, price, place and promotion.
2. Rolex Marketing Strategy
2.1. Rolex Product strategy
2.1.1. Rolex products
Rolex offers six product variants for women, and nine variants for men. Some of the most successful Rolex models are:
• Rolex Explorer
• Rolex Air King
• Rolex Submariner
• Rolex Deep-Sea
• Rolex Daytona
• Rolex Oyster Perpetual
• Rolex GMT Master
There are three key watch lines- Cellini, Professional and Oyster Perpetual.
2.1.2. Rolex latest offerings
Rolex introduced six new watches in 2022, including-
• Air-King
• Day-Date 40
• GMT-Master II
• Yacht-Master 40
• Yacht-Master 42
• Date-Just 31
2.1.3. Rolex market analysis (Segmentation-targeting-positioning)
Segmentation
Rolex segments the market based on geography, demography and psychographic basis.
• On geographic basis, Rolex targets urban areas with possibility of having large proportion of high-income residents (e.g. Upper Eastern side of New York).
• Income and age are two key demographic variables that Rolex considers to segment the market.
An example is given below:
Source: Deakin Business School
The psychographic segmentation is done based on following factors:
• Prestigious sports
• Luxury adventure
• Swiss made
• Exclusivity
• Brand ambassadors
Rolex target market
The Rolex target market includes high income groups (both male and female) that seek exclusivity and high quality.
A typical Rolex customer is 35 years old (or above) male. Rolex target market also includes sport figures and celebrities. Rolex watches are famous among sports enthusiasts with high purchasing power.
Rolex brand positioning
Following perceptual map positions the Rolex against its competitors:
Rolex perceptual map
Source: Deakin Business School
So, Rolex is positioned as a high-end, luxury brand with strong social presence.
2.1.4. Rolex unique selling proposition
Rolex tagline or slogan is:
“It does not just tell the time, it tells the history”
The iconic and historic brand has mastered the art of perfection. It is an art to consistently maintain extremely high quality while producing around a million pieces per year. Another unique product feature is that customers can check Rolex Watch history through a unique serial number.
So, perfect quality, handcrafted designs and historic brand value are the key USPs of Rolex that differentiate the brand from competitors.
2.1.5. Rolex competitive advantage
Rolex competitive advantage mainly lies in its product quality and design. A perfect combination of extremely high quality, hand crafted designs, precision, style, reliability and sturdiness is what makes Rolex’s products successful.
Following graph shows that Rolex USP is strong enough to provide competitive edge over rivals:
Source: Statista
The graph shows Rolex holds strong leadership position with a huge turnover gap.
2.1.7. Key takeaways
Rolex justifies its exclusive brand image by offering extremely high product quality. It places highest importance to ‘product’ in its marketing mix framework.
2.2. Rolex Pricing strategy
2.2.1. Rolex pricing strategy
Rolex follows an exclusive, high-end pricing strategy. It offers no promotional discounts to maintain its exclusive and premium brand image.
The Rolex pricing strategy is more inclined towards the value-based pricing. However, Rolex also carefully considers the material cost, as its watches are carefully and elegantly crafted by highly skilled workers.
2.2.2. Rolex pricing range
Rolex cheapest product is Oyster Perpetual that costs $5,300, and most expensive Rolex watch is Rolex GMT Master whose starting price is $485,350.
The Rolex price range is roughly from $5,000 up to millions.
2.2.3. Rolex pricing objectives
Rolex considers three key factors while setting the prices, including- product quality, customers’ needs, and brand image. The key pricing objective is to keep the brand out of reach of mass market.
2.2.4. Rolex pricing trends
Analysts predict a temporary decline in the Rolex prices. Following graph shows the fluctuations and decline in Rolex prices:
Source: Fratellowatches.com
Some popular Rolex models saw the price fall up to 21% in 2022.
However, after a temporary decline, Rolex prices are expected to rise in 2023.
2.2.5. Pricing discrepancy
Recently, the huge difference between Rolex retail and actual market prices has become a topic of debate. Rolex’s retail prices are much lower than what customers actually pay for it in the market.
This price discrepancy exists due to large demand-supply gap, and is paving way for robust secondary and grey market for Rolex watches.
2.2.6. Key takeaways
Rolex pricing strategy is well-aligned with its exclusive brand image. Rolex is the price setter, and does not care what competitors charge. It considers the material type it uses, and what its customers want.
2.3. Rolex Place strategy
2.3.1. Rolex supply chain
Rolex manufactures the watches in house to ensure quality and precision. Most of the watches are manufactured in Switzerland, and are then distributed through authorized dealers.
2.3.2. Rolex distribution strategy
Rolex adopts exclusive distribution strategy to reach the target market. It has given exclusive rights to a handful of authorized dealers.
2.3.3. Rolex distribution channels
Rolex uses multiple distribution channels. Customers can buy Rolex watches from official dealers. They can also buy Rolex watches from Amazon. However, Rolex encourages its customers to purchase from official Rolex outlets.
2.3.4. Distribution partners
Rolex is the sole distributor of its watches. The brand does not authorize any person to act as wholesaler. However, it has authorized dealers and retailers around the world. Rolex adopts the ‘retail only’ distribution model.
2.3.5. Worldwide locations
Rolex has 4,000 watchmakers in more than 100 countries. In 2022, Rolex has 1,816 authorized dealers around the world.
2.3.6. Rolex waiting list
In an effort to maintain exclusivity, Rolex keeps its customers waiting for years before they could purchase the product. The average waiting time.
2.3.7. Key takeaways
Rolex maintains high control over its supply chain through in-house manufacturing, and through exclusive distribution. The brand preserves its exclusive image by carefully choosing the authorized dealers who could maintain the exclusivity.
2.4. Rolex Promotion strategy
2.4.1. Rolex advertisement strategy
Rolex TV ads are usually a blend of education, aesthetics, culture and history. The ads not only tell brand stories, but also give a glimpse of cultural influences that shape those narratives.
Rolex is considered the only luxury watch brand that was mentioned in Fleming’s James bond novel. There are many movie scenes in which lead actors wore Rolex.
Here are some examples:
Rolex watch advertisement. Movie- Thunderheart- Val Kilmer wearing Rolex
Source: Rolex Magazine
Rolex watch advertisement. Movie- Lost in Translation movie wearing Rolex Date just
Source: Rolex Magazine
The James Bond turned the Rolex’s submariner into an icon. Here is the complete list of James Bond and other movies that advertise Rolex in their iconic scenes.
2.4.2. Print media
Rolex advertises in different high-end business, sports and high end lifestyle and luxury magazines. Moreover, Rolex has its own magazine in which it regularly posts the articles about the latest collections.
2.4.3. Rolex celebrity endorsements
Rolex advertises its products through celebrity endorsements.
Most notably, Roger Federer endorses Rolex’ Oyster Perpetual Date just and Deep Sea. Jackie Stewert endorses Rolex’s Day-Date and Daytona, and Micheal Bublé endorses Oyster Perpetual Daytona.
2.4.4. Rolex influencer marketing
Rolex is the pioneer of influencer marketing. Here is an example of how Rolex pioneered influencer marketing:
Source: Ryan Walker
The Rolex influencer marketing strategy has now transitioned to the famous athletes and cultural icons with huge followership. Such innovative marketing strategies have made Rolex a symbol of success.
2.4.5. Rolex sports sponsorships
Rolex promotes its brand through sports sponsorships. Rolex sponsors motor sport, tennis, sailing, golf and at equestrian tournaments.
2.4.6. Rolex advertising budget
In 2022, Rolex spent around $100 million on TV, digital and print advertising. The ads were broadcasted on more than 100 media platforms, and through multiple media formats.
2.4.7. Key takeaways
Other than establishing strong presence through sponsorships and advertisements in movies and high-end magazines, Rolex’s advertising content and messaging have also played a key role in affirming strong brand positioning.
3. Recommendations
• Increase product variety for both genders, and introduce more products targeting middle income customers
• Pursue related diversification strategy by taking benefit from strong brand image
• Resolve the price discrepancy issue, and penetrate deeper into pre-owned watch market by offering more re-selling options to customers
• Increase in-house production and expand dealership
• Focus more on digital marketing to better understand behavior of Gen Z
• Hire online influencers to increase the brand popularity among young customers
4. Conclusion
A key reason behind Rolex’s success is that it consistently maintained the luxury and prestigious brand image though well-aligned marketing mix.
Rolex innovative marketing strategy is one of the core business strengths. However, brand has some weaknesses as well. Have a look on Rolex SWOT analysis to know more about Rolex strengths and weaknesses.
5. References
S. (2016, August 8). The Royal Chariot of time!!!! T2 2016 MPK732 MARKETING MANAGEMENT (CLUSTER B).
S. (2016b, August 8). The Royal Chariot of time!!!! T2 2016 MPK732 MARKETING MANAGEMENT (CLUSTER B).
Luxury watches: leading brand turnover worldwide 2021 | Statista. (2022, December 20). Statista.
Broer, R. (2022, October 22). Rolex Prices Are Coming Down, But Don’t Get Your Hopes Up. Fratello Watches – the Magazine Dedicated to Luxury Watches.
Yahoo is part of the Yahoo family of brands. (n.d.-d).
Val Kilmer Wearing a Rolex Daytona in the movie Thunderheart. . . (n.d.).
Bill Murray Lost In Translation. (n.d.).
Rolex watches in movies (not all inclusive) | Wrist Watch Forums. (n.d.).
Welcome to RolexMagazine.com. . .Home of Jake’s Rolex World Magazine..Optimized for iPad and iPhone. (n.d.).
R. (2021a, April 1). How Rolex Pioneered Influencer Marketing. Ryan Walker.
