HBR Case Study: Competing Against Bling

Summary

In a challenging Chinese market, Wei Song and Pearl Zhang from Rochat and Schmid face stagnant sales and seek innovative marketing strategies ahead of the Chinese New Year. They propose a bold endorsement deal with popular celebrity Changchang Gao to attract younger consumers. However, their chief creative officer, Simon, resists this flashy approach, prioritizing the brand's traditional elegance. As tensions rise, Wei must navigate internal conflicts and decide whether to rally support from the CEO, Rolfe, to challenge Simon's reluctance to change. The scenario highlights the struggle between innovation and heritage in luxury branding.

Takeaways

• 😀 Rochat and Schmid (R&S) is a 100-year-old Swiss luxury watchmaker facing stagnating sales in the competitive Chinese market.
• 🎯 Wei Song, the director overseeing the Greater China market, and VP of Marketing Pearl Zhang are tasked with boosting sales.
• 📊 The upcoming Chinese New Year presents a key opportunity for a marketing push to increase brand visibility.
• ⚡ R&S's chief competitor, Berlinger, employs a flashy marketing strategy that contrasts with R&S's traditionally restrained approach.
• 💡 Pearl Zhang suggests a bold marketing shift by proposing an endorsement deal with popular Chinese celebrity Changchang Gao.
• 👩‍🎤 Changchang Gao has a significant following on social media, particularly among millennials, making her a valuable potential brand ambassador.
• 📈 Simon, R&S's chief creative officer, is resistant to change, favoring the brand's long-standing values of subtle elegance over flashy promotions.
• 🤝 Wei Song contemplates the need to balance traditional brand values with innovative marketing strategies to remain competitive in China.
• 📞 Rolfe, R&S's CEO, shows support for Song's vision but is concerned about maintaining brand integrity amid potential changes.
• ❓ The discussion raises questions about whether a celebrity endorsement is the right strategy to drive growth in the luxury watch market.

Q & A

What challenges is Rochat and Schmid facing in the Chinese market?

Rochat and Schmid are experiencing flat sales in the competitive Chinese market, prompting a need for new marketing strategies.

Who are the key people involved in addressing the marketing issues?

Wei Song, the director overseeing Greater China, and Pearl Zhang, the VP of Marketing, are the key figures responsible for addressing the marketing challenges.

What approach is Berlinger taking that contrasts with R&S's marketing strategy?

Berlinger is utilizing splashy promotions and vibrant marketing campaigns, in stark contrast to R&S's traditionally restrained and elegant approach.

What marketing strategy does Pearl Zhang propose to Simon?

Pearl Zhang proposes an endorsement deal with Chinese singer and actress Changchang Gao, aiming to appeal to the millennial demographic.

What is Simon's initial reaction to Pearl's proposal?

Simon is skeptical about endorsement deals, considering them lazy, and believes Changchang Gao is too young and flashy for R&S's brand image.

What argument does Pearl make regarding the target demographic in China?

Pearl argues that young Chinese consumers make up a significant portion of the luxury market and tend to favor flashier products, necessitating a shift in R&S's marketing.

What does Wei Song suggest about the urgency of changing marketing strategies?

Wei Song emphasizes the importance of generating growth quickly for shareholders, questioning whether trends in luxury consumption will change fast enough to help R&S.

What is Simon's stance on changing product designs and marketing strategies?

Simon insists that they should not change their product designs or marketing strategies, as he believes R&S's value lies in its heritage and consistency.

How does Rolfe, the CEO, respond to the proposal for a new marketing direction?

Rolfe expresses trust in Song's understanding of the Chinese market and offers to overrule Simon if Song and Pearl can stay within budget.

What underlying concern does Song have regarding the proposed endorsement deal?

Song is unsure if a celebrity endorsement deal is the right approach to boost R&S's market share in the Chinese luxury watch market, despite the pressure to shake things up.