Marketing is an elusive subject. Everyone talks about it, everyone has an opinion on it but few truly know what it is. Amongst the WIS community marketing is often looked at as the mother of all evils…especially if the new offerings are not to one’s tastes.
The major changes in the watch world originating from the economic downturn and the shift of the markets Eastward were the perfect opportunity to interview Marc Guten, Vacheron Constantin’s Marketing Director an industry veteran who has been in the business for over 20 years and who far from the cloven hooved, fire breathing marketing man some could imagine talks about where Vacheron Constantin comes from and where it is heading to.
- How do you define marketing ?
Marketing is defining and setting up the strategy for promoting the brand. For us it is adherence between the brand, its offer and its clients via its communication mix. This strategy will enable us to develop the future.
- Looking from the outside it seems that Vacheron Constantin was always hesitant to communicate and use marketing until only a few years ago. How have things changed?
If we look back…and its not long ago, Richemont group bought Vacheron Constantin in December 1996 and at that time our marketing was not globally integrated. With Richemont group we integrated subsidiaries in each market. We had to structure ourselves and the brand started to grow. There is always a learning phase in everything and we had ours too. Marketing became more and more important and today has become a key element in the development of the brand.
- In what way is Marketing different at Vacheron Constantin as opposed to another high end watch brand? Or finally does everyone use the same techniques?
The basic techniques are the same for all, we promote the brand, its image and products. The big difference is linked to the brand’s DNA and history. At VC the marketing department covers communications, product marketing and retail (boutiques). This enables us to create a consistent brand image. This is what will make the brand’s strength in the future. I think that it’s the way we are structured that makes us different.
- Vacheron Constantin keeps putting its history in the forefront and at one point the brand is more known for its age than its products!
This may have been true in the past but not anymore. Vacheron Constantin is over 256 years old and it is something fundamental, there are not that many brands, in any industry, that have been in continuous production as long. VC is a niche brand and the question is how to make people understand this history and roots which are a force, of quality, know how and transmission – each year we have over 20 apprentices joining the brand and continue learning under the aegis of a Master Watchmaker . We are certainly the only brand who can service and repair absolutely every single watch ever made. We have more component stocks for our vintage pieces than our modern ones. We needed to first anchor these strong roots to show this heritage which drives us to success. Today we can say that for the next centuries Vacheron Constantin will still be there and continue servicing its watches.
- Will we soon see the end of the “history” based campaigns?
Our communication campaign – like all campaigns - will evolve in the future. This campaign reassures our client and is a story telling for most of people who don’t know Vacheron Constantin. It has been developed to tell anecdotes about the brand with important dates or events which built our history.
- Without putting down the other brands Vacheron Constantin is the only high end watch brand using the Geneva Hallmark. How can you get other Geneva based high end brands to apply for the hallmark as this would give it greater credibility?
Vacheron Constantin participated in the elaboration of the Geneva Hallmark as early as 1886 and presented its 1st timepiece with the Hallmark in 1901. We have 110 years of Geneva Hallmark in our history.
We are obviously not the only brand but we are the only one to have such high production numbers. The criteria have evolved, it is a governmental authority which delivers it, it is an independent quality hallmark and this is its force. However, I think that today it is not sufficiently highlighted, but with the new criteria, more brands will want to become part of it. The more brands embrace the hallmark the stronger it shall become and in return it will have a greater positive impact on Vacheron Constantin.
- I read somewhere that Vacheron Constantin had sold its full yearly 2012 production by the 2nd day of SIHH, it shows that the modern pieces are extremely sought after. But the brand seems to have a problem on the vintage market. How can you explain this difference and is Vacheron Constantin planning on doing something about it or you don’t care?
Of course we care, the vintage watch market is important but we believe that it is a market that should evolve by itself without Vacheron Constantin intervening to drive the prices up. The stronger the brand is, the stronger the vintage market will be. A brand should be faithful to what it is, it should develop and have an investment value, that is what we are building. If we continue creating awareness, creating brand equity and most of all working on our quality, the finishing, the details etc…the auction prices will automatically rise, and this is the case as you can see in the recent auctions.
VC paid $1.8 million in 2011 to buy this unique Grande & Petite Sonnerie with chronograph made for JW Packard in 1918
- In terms of new products, after extremely audacious and a bold designs such as the Sputnik, the Masques series and the Quai de l’Ile, Vacheron Constantin’s 2012 offerings were extremely conservative. Why?
I don’t agree with your remark, we may have recentered our offering towards more classical pieces but that doesn’t mean we are being conservative.
It is true that the crisis also pushed many brands to offer more classical products, however Vacheron Constantin has always been a timeless style brand with touches of audacious and bold designs. Look at our World Time launched last year or at the new Malte collection this year and we are not even talking about the amazing work of Métiers d’Art les Univers Infinis presented at the SIHH putting forward our strong investment on the craftsmenship and transmission. Continuously evolving our designs show creativity as we break the existing codes.
Loungers may be interested to know that new Historique piece, which shall be launched in September, has quite an interesting and creative design.
Moreover, creativity is not only for design and I believe that this year we have been technically creative by offering two brand new tourbillon movements, one in the Patrimony Traditionnelle case with a rare 14 days power reserve and the other being a tonneau shape tourbillon. These two exceptional timepieces also comply with the new Geneva Hallmark criterias which no longer apply only to the movement but to the whole watch.
The Quai de l’Ile is our vision of 21st century haute horlogerie, it is a revolution in Vacheron Constantin designs, it is a whole collection and we can’t launch a brand new collection each year.
- Earlier you mentioned that within the next 3-4 years Vacheron Constantin would have a 100% manufacture calibres in its watches. Does this mean the long awaited chronograph calibre will be seen soon?
It is our goal!
- Does the marketing department actually decide on production numbers?
Today the market can absorb much more than what we produce but having decided to take the manufacture calibres road, our production capacity is limited. It’s a team work where we can influence the types of movements needed ( more hand wind or automatic, in which collections…)
Our volumes are influenced by the hand work which goes into our movements. Our watches require 85%-90% of manual labor. To increase our production capacities we need hands (watchmakers) and we need to train them. To reach the level of expertise to work on our timepieces a watchmaker needs at least 10 years experience. As you see… it is a long process.
- Talking of prices, how do you justify the price increases? A few years ago to afford a high end watch you needed to make a good living, today you need to be rich!
You have to take into account the explosion in price of precious metals. The vast majority of our cases are in gold and platinum, our movements are in-house with the Geneva Hallmark. The latter adds an extra 30% cost to the movement as the compliance with these criteria requires manual labor, which means experience and time. Our quality of finishing is also extremely high. Each plate, bridge, gear or screw is handcrafted to the nth degree. All this is much more expensive to produce. The hand finishing increases the movement’s reliability and enables it to run smoothly for centuries once it undergoes regular servicing. It’s an investment that will increase in value.
- The luxury industry looks at China with loving eyes. Aren’t you afraid that the traditional markets such as Europe and the US will feel left out and what would happen if the Chinese stopped spending?
We are very strong in China, we started in China in 1845. I keep coming back to our history but it is a strength today to have been in China 160 years ago.
Let’s not forget that Europe is the cradle of luxury and Switzerland is the cradle of luxury watches and that’s why there is this high demand from emerging markets for European luxury items. You have the Chinese who only recently have had access to this luxury, something Europeans and Americans have had access to for decades and centuries, there is the novelty effect and for many a status symbol. But why would the Chinese stop buying? With such a huge population and our exclusive production numbers I don’t see any major risk for the future.
Obviously there will be hiccups and social issues will need to be dealt with.
- Let’s talk about digital communications. The brand is present on the social media via The Hour Lounge, Facebook, Twitter etc…. Aren’t you afraid that being such a high end luxury brand such closeness takes away some of the magic of the brand?
We need to live with our times. The content provided will keep the magic. Life is about evolutions and we have to use these new technologies. Even in making watches we use today tools that didn’t exist before. We’re not going to become an e-marketing machine but why not being where our aficionados are? As we talked about before, the ticket to owning a Vacheron Constantin is high and not everybody can buy one of our watches, but that doesn’t mean they can’t appreciate what we do and this is also a way for them to have access to the brand without owning.
That was why THL was launched over 5 years ago, and also a Mandarin version, close to a year ago, we were and still are pioneers. We opened the brand to our aficionados regardless if they are owners or not. I think it’s fabulous to have the force of those who love what we do and who transmit their passion and their knowledge. The Loungers are now a real community, but an independent community which is fuelled by their passion for Vacheron Constantin.
We also just launched The Hour Club reserved to Vacheron Constantin owners, the goal being to strengthen the Vacheron Constantin community and take the experience to another level.
Thanks for posting this excellent interview! I must say that I like the general view that the company is taking on how it plans to movie forward, although I might disagree with some of the particular aspects (one clear stand-out on this matter is the argument for the prices, where last year alone experienced about a 15% jump in a tough economy). That said, I think the emphasis on quality is key, and it is great that the focus is on expanding expertise (or "hands" as discussed in the article) prior to any consideration of increasing production. However, I find, and in contrast to your last question on the magic, that a brand's ability to remain in contact with its customers (for instance like the great job you and Dan are doing at the Hour Lounge), is much more significant than much of the marketing tools used by other brands such as ambassadors etc.It might erode some of the magic or th je ne sais pas (so to speak) of the brand, but the magic is in the history and the listening ear goes a very long way in my books. Granted that I tend to agree with your view that the history is sometimes over-emphasized, but this so far has been played well in terms of emphasizing the breadth of knowledge, expertise, ingenuity etc. On this note, I think the approach to the vintage market is missing a key aspect: it is not just driving the prices up, but rather the need to provide a better database of what Vacheron has produced as well as materials on these products so that people are more knowledgeable about what they are buying - this cannot evolve without Vacheron's intervention. To put it bluntly, how often do you see a "can you help me identify my watch" question when it comes to some of the other brands Vacheron is competing with? I am pretty certain, it happens more with Vacheron because their is a shortage of material out there. I think this is one thing that Vacheron has been addressing well with more recent collections, but going back to older models would be even more beneficial. Again, knowledge is key, and the series of books on the treasures of VC or the new, and stunning might I add, Calibre 2755 book are definately on the right track in adding to the sophistication and knowledge of the market. Finally, did Mr. Guten give more info on the historiques piece coming out in September? Best, Walid