Why is iconic Swiss Army knife brand Victorinox, which holds virtual monopoly of the pocket tool market, pushing its watch category so much? Especially in the crowded Indian timepiece market where the affordable luxury watch category is a barely Rs 1,500-crore market?

“Our diversification is closely linked to the 9/11 attack, after which the pocket tool was banned from all airports. Thirty per cent of our turnover came from duty-free showrooms. That stimulated an accelerated diversification strategy,” replies Mr Alexander M. Bennouna, Chief Executive Officer (Timepieces), Victorinox.

It's been ten years since the Swiss brand diversified into watches, but it's taken time to get its positioning right – earlier it entered the mass market category. But now it's graduated to the affordable luxury segment, and finding that it's a better fit with its core Swiss Army Knife proposition.

“We were a volume driver in the past. But now, from one million (watch) units exported a few years ago, we have reduced to half-a-million units. Yet, the turnover has more than multiplied,” says Mr Bennouna, describing how they consciously moved up the value chain. Victorinox watches are available for prices ranging between $300 and $2,000.

Price difference

Given the price difference between foreign watches sold in India and places such as Dubai, due to steep duties, why would the Indian customer buy a Victorinox locally? Mr Bennouna admits there is a 20 per cent difference, but he says service is the factor which will drive local sales.

And, India, of course, being a growing market it cannot ignore. In 2005, 85 per cent of Victorinox's turnover in watches came from Northern America. Today 45 per cent comes from Asia. “This is where the world growth is and we have significantly developed marketing activities in this zone,” says Mr Bennouna.

Expansion

In the last ten years, Mr Bennouna says, Victorinox has rapidly expanded into other categories – “Watch was natural because the Swiss timepiece is known to have all the values that echo quality. Three years later came luggage, then apparel, then fragrance.”

But it's the watch category Mr Bennouna is pushing in India through sustainable initiatives like Time To Care.

“We are not a watch brand but a Swiss brand making watches,” says Mr Bennouna, explaining that they will be playing up their Swiss values, though he admits there are at least ten competitors in the segment.

Brand ambassadors

And why no brand ambassadors? Rolex has its Roger Federer, Richard Miller has Rafeael Nadal and Felipe Massa, Longines has Aishwarya Rai, Tissot has Deepika Padukone.

“We use the values of Swiss army knife as key spokesperson,” retorts Mr Bennouna. Our brand ambassador is this iconic device. It has such quality and functionality that it even speaks for Switzerland.”

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Published on October 25, 2011