PRICES, MARGINS AND POSITIONING

Today the price of a watch is mostly dictated by product positioning. If the difference between the price and the intrinsic value of a watch becomes too great, there is the risk of a explosion. We have decided to be completely transparent about our prices, and to use a price multiplier of 3.5.

Positioning

Today the price of a watch is mostly dictated by product positioning. Target consumers are defined by analyzing their behaviour; their buying habits, the brand of their toothpaste. Finally their dream watch can be created, suited to their budget.

After the positioning and price have been defined, production costs are optimized by playing with the origin, the complexity of the construction, and the quality of each component.

The goal is to match the industry standard multipliers, which are generally 6 to 8 times cost price. In practice there are ‘aggressive’ brands which use a multiplier of 5 and, rarely, some who have succeeded in creating a perceived high value, allowing them to apply a multiplier of 10 or more.

Usually the retail price is equal to the cost price multiplied by 6 to 8.

PRICES GO UP PRICES GO DOWN

Between the years 2005 and 2012 the Swiss watch endlessly broke export records. During this euphoria, the general trend was rising prices – meaning a change in market positioning – which has not always translated to rising quality. Often it is simply a case of the margins being raised.

Pricing policy relating to product positioning (which essentially states that the price of a watch should match the price the customer is willing to pay) can lead to excessive variation between the price and the intrinsic value of the product. This pricing approach represents a huge risk at a time of sudden fluctuations in the economy or in purchasing behaviour, as has been the case recently with the global crisis, the strong Swiss France and smartwatches. Prices are not infinitely elastic, and the consumer is not stupid.

In this new environment, many brands have lowered their prices and returned to a reasonable quality/price ratio. This is a healthy reaction, but some consider it to be too late. Inventories have grown amongst retailers who find themselves in a very difficult position. This creates a situation where alternative networks (the secondary market and gray market) are often the only safety valve preventing the explosion. We will go into further detail on this in Chapter 3 on April 27th: Exclusive distribution and community power.

If the difference between the price and the intrinsic value of a watch becomes too great, there is the risk of an explosion.

PRICE TRANSPARENCY

Purchasing behaviours are changing. The consumer compares, shares and comments. They want a watch that is well designed, loaded with emotion, and that has a high quality/price ratio.

We plan on doing two things to mark the foundation of our pricing policy: first, following our commitment to remain transparent we will communicate and explain the production cost of all of our watches. Secondly, by selling directly to the end consumer e will be able to apply a uniquely low multiplier of 3.5 to our production prices. The retail price will not be the result of product positioning; rather it will be directly related to production cost.

Some brands have already started selling online directly to the end consumer, thereby eliminating retailer and distributor margins. We believe this is a trend that will continue to grow in years to come. That said, our approach goes a step further. We will be selling our watches worldwide through our website, but not exclusively. More will be explained in the next chapter: Exclusive Distribution and Community Power.

The retail price will not be the result of product positioning; rather it will be directly related to production cost.

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  1. Martin Peter Burri says:

    Guten Tag
    Ich finde Uhren und Geschichte sehr spannend. Gerne möchte ich mir die Modelle mal physisch anschauen. Wo ist dies möglich? Eine Uhr muss man sehen, spüren, am Handgelenk sehen.:-)
    Herzlichen Dank für eine Antwort.
    Mit besten Grüssen
    Martin

    • Kasim
      Kasim says:

      Vielen Dank für Ihr Interesse! Unsere Uhren werden ausschließlich nur auf unserer Website verkauft, jedoch gibt es ab und zu Events wo man uns besuchen kann und die Uhren betrachten und anprobieren kann. Bei dem nächsten Event ist das Thema NB24 angesagt, es wird am 25.11. in unserem CODE41 Hauptsitz in Lausanne stattfinden.

    • Boolakee Osman
      Osman says:

      Hallo,

      Vielen Dank für Ihr Interesse an unseren Uhren!

      Leider verfügen wir nicht über einen Produktkatalog. Alle unsere Modelle sind auf unserer Website zu finden und Sie können die Preise auf jeder unserer Projektseiten überprüfen 🙂 Hier finden Sie eine Liste der Durchschnittspreise:

      ANOMALY 01- Geschmiedeter Kohlenstoff : 1800CHF
      ANOMALIE 02 : 1100CHF
      ENTWICKLUNG DER ANOMALIE : 1250CHF
      DAY41: 1200CHF
      X41: 5390CHF
      NB24: 4600CHF

      Die Details zu den Preisen sind nur wenige Wochen vor dem Beginn der Vorbestellungen bekannt, die nächstes Jahr für das ANOMALY EVOLUTION und das X41 stattfinden werden.

      Wir stehen Ihnen für alle Fragen zur Verfügung!

      Osman

  2. Michael Hann says:

    Remember that the principal function of a watch is to indicate the time. It seems to me that your products are confused visually and forget this principal function. Think of a black watch face with white hands and numerals. Regards, Michael Hann

  3. Jim says:

    Prima verhaal over transparantie en de lagere prijs van jullie horloges t.o.v andere automaten, maar dan vind ik €5000,- wel erg veel voor de X versie. Gr. Jim.

    • Elodie
      Elodie says:

      Hallo Jim,

      Dank u voor uw commentaar.

      We proberen zo transparant mogelijk te zijn ?

      Als u vragen heeft over de X41, neem dan gerust contact met ons op ?

    • Elodie
      Elodie says:

      Bonjour Bogunnar,

      Chaque prix dépend du modèle et de l’édition de la montre ? .

      Vous pouvez voir chaque prix sur la page du projet. Quel est le modèle qui vous intéresse ?

  4. JEAN-CHARLES GRESSIER says:

    Les beaux objets tels que les montres me fascinent (je roule en Ducati, mon stylo plume est un Mont-Blanc, etc…), j’avais un rêve d’ado que j’ai concrétisé à 50 ans : avoir une Rolex au poignet, mais force est de constater que les vôtres sont magnifiques. J’ai encore un an de Pôle Emploi à tirer avant la retraite autant dire que c’est loin d’être évident. Ce qui me chagrine un peu tout au long de vos beaux discours et reportages, c’est qu’aucun prix n’apparaît en face de vos modèles, alors si le seul but est de faire rêver c’est dommage.
    Jean-Charles

    • Boolakee Osman
      Osman says:

      Bonjour,

      Merci de l’intérêt que vous portez à notre marque 🙂

      Nous n’affichons effectivement pas systématiquement nos prix car nous fonctionnement sur le principe de précommandes. Aussi, les prix de nos produits ne sont visibles qu’avant (quelques semaines ou mois) et pendant la phase de précommandes.

      Mais nous comprenons votre remarque et la prenons bien entendu en compte dans l’amélioration de nos services 🙂 . Merci pour votre commentaire !

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