Luxury Brand Innovation Proposal

Luxury Marketing
Name
Institution
Due Date
Luxury Marketing: Rolex
Introduction
Rolex is one of the most renowned brands in the world. The company was founded by Hans Wilsdorf, whose vision of a watch being worn on the wrist brought about immense possibilities in the world. When Wilsdorf was dreaming of a wristwatch in 1905, he foresaw the elegance and reliability of wristwatches. However, wristwatches had a major problem with precision at the time, which greatly hampered their reliability. Wilsdorf went ahead to solve the precision problem and convinced the world that his dream was indeed valid (Rolex, 2022). From the time the company was founded, Rolex has been the gold standard of wrist watches in the world, and to date, the company continues to showcase its dominance as one of the leading brands in the world. Sabanoglu (2021) notes that in 2020, Rolex maintained its leadership as the leading global luxury watch brand by generating close to $4.7 billion. Rolex’s figure was more than double its closest rival, Omega, whose turnover was approximately $1.8 billion (Sabanoglu, 2021). However, despite Rolex’s leadership in profitability, the company still performs dismally among millennials and Generation Z groups. These groups have showcased a taste for the world’s finest brands, and their willingness to spend should be something Rolex seeks to take advantage of. However, Rolex has maintained its approach of exclusivity, and though this has proved profitable for a long time, it may not be sustainable in the long run due to the changing customer attributes. Therefore, provided herein is a brand innovation proposal that showcases how Rolex can leverage strategic approaches of experiential marketing and social media to capture this budding and extravagant group of customers.
Rolex is a Luxury Brand
In its early years, Rolex was not known as a luxury brand. Reuter (2021) notes that the watch was considered a prerequisite tool for professionals. However, after Andre Heiniger took over from Wilsdorf, he brought about lasting transformation in the company. Heiniger brought the idea of luxury to the company, and managed to kill the notion that the Rolex watches were meant for professionals. First, Rolex started to adopt the exclusivity approach by developing watches that a select group of people could only buy. Secondly, Rolex decided to make their watches a little bit difficult to find. Initially, Rolex watches were readily available, and this reduced their value in the eyes of consumers. However, Reuter (2021) reports that Rolex watches are increasingly scarce, which, according to Deloitte (2021), makes them even more coveted in the world. In the Swiss Watch Industry study, Deloitte (2021) outlines the value of Rolex, scarcity, design, and technical specifications as some of the attributes that endear Rolex watches to high-end customers in the Chinese market.
Experiential Marketing
The word experiential comes from the word experience, and experiential marketing can simply be explained as a marketing strategy that aims to give customers and potential customers the experience of a product. One of the biggest challenges that companies have faced while dealing with millennials and Gen Z groups is their preference for modern marketing forms. These groups are tech-savvy and wish to be engaged at that level. Therefore, traditional forms of marketing do not work. Khalid and Omar (2013) note that traditional forms of marketing view consumers as “rational decision-makers.” Further, these marketing forms are known to focus more on the benefits of products to consumers as well as the functional features of a product. However, Khalid and Omar (2013) note that experiential marketing factor in the aspect of emotions and their role in influencing customers’ purchasing decisions. The authors indicate that experiential marketing seeks to take advantage of the pleasurable experience that customers seek to have while shopping for a product.
One of the distinguishing elements between millennials and Gen Z groups is that cost is not a major determining factor in their purchasing behavior. In their study, Agahi et al. (2022) note that the cost of a product lacks the same degree of relevance to the millennials and Gen Z consumers. The authors continue to indicate that millennials and Gen Z consumers are known to want to have an entire shopping experience. These groups of consumers appreciate the entirety of a retail experience, and the cost and material considerations happen to be secondary. In a bid to capture or attract this particular lot of consumers, Rolex ought to change its approach. While scarcity and exclusivity have worked for a long time, this group of new consumers wishes to have a more intimate relationship with a company. They want to feel wanted, and Rolex ought to invest heavily in building trust between themselves and this new lot of customers (Agahi et al., 2022). In 2012, Red Bull gave the world an experience through its Stratos campaign. According to Shearman (2012), the Stratos campaign attracted more than 8 million concurrent viewers on Youtube. The experience Red Bull gave the world, its customers, and potential customers was unforgettable. Rolex ought to follow a similar example and give millennials and Gen Z consumers an experience that will endear them more to the brand. Khan et al. (2021) note that all dimensions of brand experience leave an impression on millennials and affect their engagement. To be able to take advantage of this new class of consumers whose willingness to spend on luxury brands is unmatched thus far, Rolex ought to consider experiential marketing. Though its products’ cost and design specifications might drive sales among Gen X and baby boomer consumers, showcasing and giving the new class of consumers an experience of owning a Rolex watch ought to be the new way of attracting customers.
Social Media
Rolex used to advertise heavily on traditional platforms like print media. The brand would use print ads in magazines and television commercials to promote its products. However, in 2012, Rolex made a shift to social media, where it created a Facebook and YouTube page for the first time. Over the years, the brand has expanded to other social media platforms like Twitter and Instagram. Social media has been critical for Rolex since it continues to help it reach a younger audience. Most young people no longer watch television or read print magazines (Twenge, 2018). The presence of Rolex on social media is critical in ensuring that the brand remains relevant to the younger audience. The various social media ha...