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Wealthy people always purchase expensive accessories for showing their wealth as well as highlighting their status. Thus, a luxurious watch of high quality is the accessory, used most often to show that money does not matter for rich people. Rolex is the leading brand in the segment of luxury watches since these watches with the crown symbol show to the world the superiority of the product and give their owners a sense of personal achievement. Founded in 1905 by Hans Wilsdorf and Alfred Davis in Switzerland, Rolex, whose name was chosen due to the ease of pronunciation, offered only pocket watches as the wrist ones mechanisms were too small to make (College of Business, 2017). In 1910, Rolex manufactured its first wristwatch and it was awarded a class A precision certificate, showing that the brand had become synonymous with precision. In 1926, the company decided to design waterproof wristwatches, Oyster, and one of them was later tested by Mercedes Gleitze who swam for 10 hours through the English Chanel (College of Business, 2017). Today, Rolex is the most influential single luxury watch brand with revenues of about $3 billion as well as annual production of approximately 800,000 items (College of Business, 2017). Rolex has preserved its position as the leader on the luxury watch market by assuring a very successful target marketing, segmentation, and positioning strategy.

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Market Segmentation

Rolex has achieved the top position by implementing a successful market segmentation that divides a market into well-defined segments. A market segment is a group of customers, united by a common trait of identical wants and needs. The marketers task is to determine the appropriate nature and number of market segments as well as decide which of them to target. Thus, segments are usually defined by looking at their descriptive criteria, and these are demographic, geographic, psycho-graphic, and behavior. After the groups on the basis of one similar criterion are defined, customer segments are examined to exhibit various needs or product responses. Geographic segmentation emerges in dividing the market into geographical groups such as regions, cities, counties, nations, states, or neighborhoods (Kotler & Keller, 2011). The company offers its products to one geographic unit, even segmenting the assortment depending on the neighborhood or store. The segmentation based on geographical units focuses on being as relevant and close to individual customers as possible. Demographic segmentation criteria include such variables as family size, age, gender, education, occupation, income, race, religion, generation, nationality, and social status (Kotler & Keller, 2011). The demographic criterion is quite often used since products are usually manufactured, focusing on the target demographic groups. For example, toys are for children (1-12), walking sticks are for seniors, and so on. Luxury items are oriented to the wealthy women and men of the age of 45 and older. Psychographic segmentation is made by using a combination of demographics and psychology to understand consumers better. The psychographic segmentation separates buyers into diverse groups based on their psychological/personality traits, values, and their style of life (Kotler & Keller, 2011). In behavioral segmentation, buyers are divided into groups based on their use of, attitude toward, knowledge of, or response to a product.

Rolex is positioned as a watch of the luxury segment. Thus, being one of the most valuable products it has become a symbol for life achievements. Rolex also considers the geographic criterion while retailing its products since, for example, the companys stores are located in the prestigious areas of Europe and the USA as well as the metropolises of Asia, Africa, and Latin America. However, it is impossible to find this brands stores in many African or Latin American and Asian countries. Considering the demographic criterion, Rolex is focused on rather men than women of the age of 45 and older (College of Business, 2017). From the psychographic point of view, the brand is focused primarily on the wealthy users who highlight their status with their Rolex watches since they are synonymous to wealth, influence, and success. Being aware of their target audience, Rolex designers try to satisfy fully all wants of the brands fans as their customers desire to show their wealth and status to the entire world. Behavior segment includes the technical perfection of the mechanism for users to feel safe and relaxed while wearing the watch. That is why Rolex watches are waterproof, decorated with precious stones and metals. Moreover, the company uses only high-quality gold and, which makes it the biggest consumer of gold in Switzerland and the largest consumer of gold in the watchmaking industry. The well-known Rolex also uses gold watches and bracelets encrusted with diamonds. Thus, if the company reduces its prices, it will lose its perceived image and will be in danger of losing its customers who want to show their prestige and wealth by wearing Rolex products.

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Targeting Strategy

Plenty of statistical techniques exist for advancing market segments. When the company has determined its market-segment opportunities, it should identify how many and which segments to target. Marketers progressively combine several variants to identify smaller, better-identified target groups. Furthermore, marketers possess a continuum or range of possible segmentation levels, with which they can control their target markets differentiated, undifferentiated, customized, and focused decisions. By applying undifferentiated or mass marketing, companies ignore segment contrasts and pursue the entire market with one offer (Kotler & Keller, 2011). Undifferentiated segment designs a marketing system for a product with a superb image that can be sold to the broadest number of buyers via mass distribution as well as mass communications (Kotler & Keller, 2011). This strategy is appropriate when all buyers have roughly the same tastes and the market demonstrates no natural segments. In differentiated targeting strategy, companies sell different items to the diverse segments of the market. Furthermore, customization strategy lies in the operationally-driven general customization as well as customized marketing to entitle consumers to create the service and product offerings of their choice (Kotler & Keller, 2011). A company is customized if it can respond to individual customers with adjusting its services, products, and messages. With concentration strategy, a company markets its products to only one peculiar segment; for example, Porsche focuses only on sports cars manufacturing (Kotler & Keller, 2011). Thus, concentrated marketing strategy refers to the company gaining deep knowledge of its segments requirements, thus attaining a strong market appearance. By specializing on only one peculiar segment and products, a firm can easily obtain the customized market, offering the best items.

Producing high-quality expensive and exclusive watches, Rolex offers its products to high-income group individuals. Therefore, it uses concentrating targeting strategy. Rolex offers only one product to its customers since its luxury watches are a direct sign of a persons status. Rolex watches are perfect with proven quality, waterproof mechanism and they are manufactured by using the materials of the highest quality, which has made these watches an international best-seller. The deep examination of the watches segment by Rolex producers shows that this product becomes more and more valuable over time. The company is aimed at only high-class people who can afford expensive items to demonstrate their personality. This strategy has played an excellent role in promoting Rolex sales in the emerging Asian market, with the increasing number of new billionaires and millionaires. There were 18,000 billionaires, 440,000 multi-millionaires, along with a fast-growing middle class of about 250 million in China who possessed high purchasing power while spending $8 billion on luxury commodities in 2007 (College of Business, 2017). The high number of Rolex purchases in China is explained by the status of these watches that is extremely significant in Asia, where people shop by brand rather than choose particular models. Thus, 22% of wealthy consumers in China own a Rolex (College of Business, 2017). Such emerging markets as China play a significant role in the companys profitability increase.

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Rolexs Positioning Strategy

All companies marketing strategies are often based on segmentation, targeting, and positioning (STP). A corporation first examines various needs and unities on the market, targets them to be able to satisfy them in a superior way, and finally, positions its offerings for the target market to identify the companys distinctive offerings as well as images (Kotler & Keller, 2011). Thus, positioning is the process of designing a companys offering as well as image to occupy a distinct position in the target audiences minds. The purpose of positioning lies in maximizing the brand positioning in the minds of consumers to increase the potential benefit to the firm. An excellent brand positioning assists in guiding a marketing strategy by illuminating the brands essence, determining the goals to help consumers achieve them. Everybody in the company should understand brand positioning in order to use it as a basis for making decisions. The positioning real trick is to achieve the right proportion between what the brand truly is and the image it could show. Thus, positionings result is the successful design of a customer-focused cost proposition, a reason for the target market to purchase the product.

Rolexs positioning on the international market is entirely clear as it introduces as a luxury watch brand by offering high-quality expensive watches for those who want to show their affluent status. Some criteria aid in maintaining this brands image and remaining successful for a long time. First, Rolex supports its positioning strategy by limiting the product range, even if demand increases. For exclusive goods, deficiency on the market can affect value, induce demand, and contribute to long-lasting appreciation. While manufacturing only luxury watches, Rolex evaluates the target market needs to be able to produce the exact product to satisfy the influential peoples need for a status sign. By limiting production, Rolex evokes greater interest to its product since demand is always higher than offer. Second, Rolex also establishes that its watches are marketed only in designated stores. Moreover, the company has created the crystal prism, indicating a store as an Official Rolex Dealer, and this title is highly prized among all over the world (College of Business, 2017). Rolex works exclusively with the dealers of pacesetting images, namely large stores as well as attractive locations that can provide their customers with outstanding service. This positioning makes Rolex watches not only sold as a limited product, but it is also covered in a beautiful wrapping, which makes them more valuable. Moreover, the visitors of large luxury stores are always people of higher income, thus the company ensures its high sales. One more criterion, contributing to prestigious positioning, is Rolexs focus on maintaining its brand image purity. While other similar brands, such as Cartier, try to create additional branches and companies based on the original one to extent their production range, Rolex maintains its single product manufacturing by strengthening its positioning strategy and exclusiveness.

Repositioning Strategy for Rolex

Being a luxury brand with the world-known name, Rolex faces some challenges in its operations, particularly in current high-tech and dramatically growing environment. This company is highly dependable on the ageing market, without huge opportunities to change the age groups of its customers. Among the youngsters, the brand is closely associated with the choice of their parents and predecessors. Moreover, this brand has a strong association with having a male identity since women are quite rare buyers of Rolex watches. Another trouble for the company is counterfeit since like many other luxury accessories, Rolex watches are among the most counterfeited brands that are illegally sold via the Internet and by street sellers. In accordance with the FH Federation of the Swiss watch industry, forgeries cause 800 billion damages to Swiss watchmakers (College of Business, 2017). These fake watches are majorly produced in China because of the ease in copying their design, and their price starts with $5.

Considering these rather tough challenges, Rolex can try to reposition its strategy. By doing so, the company could introduce the manufacturing of a series of watches for youngsters. These watches should receive decreased prices for younger buyers to afford a Rolex. Moreover, Rolex could introduce a new series of watches for women; these should be decorated with such precious stones as diamonds, emeralds, and others, which will give such watches a delicate look. This decision would bring the advantage of income increase and the expansion of customer base. Implementing repositioning strategy would also make Rolex change its dealing policy with the counterfeits that steal a huge amount of its income due to the sales of fake Rolex watches, particularly those that are sold in rather expensive, high-end stores and locations. The company itself has difficulties in coping with those who produce counterfeit products, but the governments involvement could help in identifying and punishing the retailers of fake watches. Thus, manufacturing companies can also be penalized severely, which will cost them enormous sums and lead to the closing of manufacturing facilities. These measures would allow Rolex maintain its brand-name and income rates.

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Further, repositioning strategy could significantly improve Rolexs operations, but some drawbacks could lead to the loss of the target market. Thus, by manufacturing the watchers for young clients and selling them at lower prices, the company could lose some of its affluent clients due to the loss of its luxury status indicator. Specifically, many rich people would not like that lower social classes could buy the watches that were previously affordable only by the wealthy part of society. However, Rolex positioning strategy includes such a segment as preventing eBay from selling counterfeit Rolex products under the authentic name (College of Business, 2017). At the same time, positioning strategy can help implement such effective marketing communication tools as advertisement and sponsorship. Rolex printed its advertisement in Vogue and The Financial Times that had wealthy readers, and this marketing course appeared rather successful (College of Business, 2017). Another efficient advertisement tool is Sponsorship and Testimonials. Rolex is as sponsor for Arts (Michael Buble), equestrian, motor sports (Jackie Stewart), skiing, exploration, and yachting sponsoring the Open, the Ryder Cup, and Augusta Masters as well as some athletes (College of Business, 2017). These current position strategy decisions along with some repositioning ones could make a perfect match for Rolex and help it retain its leading status on the market.


The segment of luxury accessories occupies a significant place in the wider market of luxury brands. Rolex, which manufactures high-quality, luxury watches, is one of such brands since only wealthy and affluent people can wear its watchers that help highlight ones high social status. Rolexs strategy is built on the STP that implies proper market segmentation and targeting as well as positioning. Rolex has segmented the watch market by selling luxury watches that can show the affluent status of their owners. Specifically, Rolex watches are possessed majorly by older (45+) high social class and affluent individuals who choose this brand to demonstrate their status. Thus, depending on one segment of population, Rolex uses focused targeting strategy that allows the company examine and evaluate the watches buyer and necessity for their further improvement. By positioning itself a luxury brand, Rolex tends to limit its product range, which evokes increased demand and makes its watches unique since they are sold only in specialized stores. Moreover, Rolex maintains the purity of its range products by manufacturing only watches, without any additional products. However, along with advantages, Rolex strategy encounters some drawbacks as the companys narrow purchasing market includes majorly men of 45+, while Chinese counterfeits influence the companys loss of income.

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