A Cautionary Story

[jagwap]

Many years ago, in an interim job after I graduated, my boss told me a story from his past about branding and the market. He was high up in the UK branch of a well known and highly thought of audio brand. They were very popular with the well healed for their table top radios. When his boss left, instead of being promoted, his boss was replaced with an up and coming whizz kid. This new guy asked on arriving if anyone had good ides on how to add 50% sales annually. Being a specialist brand this was a hard ask due to the small specialist shops they generally were sold from. However my boss told him there is a way: ship the product in bulk to the department stores, and give them a discount. Great let's do it was the reply. However my boss advised a down side: if you do this the specialist stores will drop the brand as they will be unable to compete, and due to losing the specialised appeal, within 5 years the brand would be dead in the UK. Never mind, do it says the kid, only interested in his bonus.

5 Years later Grundig YachtBoy and the like were no longer popular, because the fan base and the specialist shops no longer created the interest.

Rolex is banking on the non WIS collectors of exclusive pieces, and it is working. However in the long game, it has always helped Rolex when anyone asks a WIS of their opinion of the quality and worth. It will not help in years to come if the answer is "I don't know, haven't had one in my hand for years."

[Pim]

Here we go again,

Rolex does the opposite thing as what Grundig did in you tale. Grundig dumped their product for the masses to buy and they lost interest. IWC did the same thing with their steel watches and at some point in time people lost their taste for that brand as well.
Rolex produces more than enough watches, over 1Mio per year and everybody can see, feel and play with those watches and buy them........ at the grey dealership. At insane prices but, hey there they are.
Also the shortage is just the populair sports models, you can walk in and order a Air-King and receive that watch in 2 months.

Does the (artificial created) shortage put people off ??? Hell yeah, we all feel the same frustration. But as I always said, the problem is the flippers and greys, not Rolex

[Etschell]

for all the griping people still are interested and buying rolex. i mean some have moved on for a bit. but they will be back.

[jagwap]

Originally Posted by Etschell

for all the griping people still are interested and buying rolex. i mean some have moved on for a bit. but they will be back.

They will only be back if they can buy them.

[Burlington]

I’m not sure how it’s quite a Rolex analogy ?

If Rolex started selling at Walmart then maybe. But if anything their brand cache has never been higher

[Wcdhtwn]

Rolex isn’t shipping watches in bulk to department stores. Even if they decided to they have lower end options to do this with, and higher end options to keep in boutiques and with AD’s. I don’t know the Grundig Yachtboy story other than what you’ve relayed here, but it sounds to me like they made a very bad business decision. Did they not have entry level options to sell at department stores and higher end options for the specialty stores?

Rolex is a business and they can’t succeed, neither can their AD’s, if they don’t appeal to more and more buyers. There are only so many WIS’s and they are only going to buy so many watches. If you want to see innovation and quality drop, and prices go up, limiting who can buy to a certain quality of collector is the way to do it.

[Etschell]

Originally Posted by jagwap

They will only be back if they can buy them.

peak interest doesnt last forever in anything.

[Hub6152]

What a pointless and totally flawed analogy. Rolex is not a small volume niche brand.

[pickettt]

Crazy. After only the third sentence, I looked over to your avatar/profile to see if you were German, because I knew exactly the brand you were speaking of.

[jagwap]

Originally Posted by pickettt

Crazy. After only the third sentence, I looked over to your avatar/profile to see if you were German, because I knew exactly the brand you were speaking of.

I name the brand, and I mentioned the UK a lot.

[jagwap]

My point wasn't the bulk shipping, it is the loss of specialised interest.

Some here are so fast to pick holes in any opinion here they don't even read the post.

Patek are getting it right: the WIS want the interesting complications and less obvious non sport models. Rolex doesn't have these models.

[Hub6152]

I read the post. One reason I can tell you that Grundig lost out was because their products were dull and unappealing by comparison to the much more interesting Japanese made products from Sony, National Technics, Panasonic, JVC, Pioneer and a host of other far more exciting brands. The Grundig name wasn’t all that appealing either in the UK.

[sgwatchguy]

Originally Posted by jagwap

Patek are getting it right: the WIS want the interesting complications and less obvious non sport models.

Patek occupy a position that is difficult for another to make a play for, though ALS and FPJ are challengers, whether by ambition or perception. I see them doing as much wrong as they are right.

Patek also have collections and models cheaper to acquire grey than from AD. Patek buying WIS are outspent by obvious sport watch desiring crowd that drive machine produced models up to insane premiums and those that buy non sport models only to be in line to acquire obvious sport models.

[jagwap]

Originally Posted by Hub6152

I read the post. One reason I can tell you that Grundig lost out was because their products were dull and unappealing by comparison to the much more interesting Japanese made products from Sony, National Technics, Panasonic, JVC, Pioneer and a host of other far more exciting brands. The Grundig name wasn’t all that appealing either in the UK.

It is possible you are thinking of a later time, when they tried to re-launch. They have been bought and sold many times, and tried again and again with no success in the UK, and I suspect worldwide. Last time I looked they were owed by the Chinese as a brand to sell cheap audio cables.

Their glory days were Yacht Boy radios and similar in teh '60s and '70s. Every well off family in my childhood seemed to have one.

[sgwatchguy]

Originally Posted by Hub6152

I read the post. One reason I can tell you that Grundig lost out was because their products were dull and unappealing by comparison to the much more interesting Japanese made products from Sony, National Technics, Panasonic, JVC, Pioneer and a host of other far more exciting brands. The Grundig name wasn’t all that appealing either in the UK.

Yep. Dull and dour. They did enough wrong beyond the one strategic mistake that the OP believes was the fatal one.

[Hub6152]

Originally Posted by jagwap

It is possible you are thinking of a later time, when they tried to re-launch. They have been bought and sold many times, and tried again and again with no success in the UK, and I suspect worldwide. Last time I looked they were owed by the Chinese as a brand to sell cheap audio cables.

Their glory days were Yacht Boy radios and similar in teh '60s and '70s. Every well off family in my childhood seemed to have one.

The 70’s is exactly when I’m referring to. I was one of those very people buying audio equipment back then.

[Hub6152]

Originally Posted by sgwatchguy

Yep. Dull and dour. They did enough wrong beyond the one strategic mistake that the OP believes was the fatal one.

Indeed, and in fact it was their acquisition by Phillips that seems to be a large part of their brand demise.

[tudorbaja27]

I have been enlightened!

[RW16610]

Originally Posted by Etschell

peak interest doesnt last forever in anything.

Agreed, nothing lasts forever.