Two years ago, the management of the Loews group (of which the Tisch family is the major shareholder), Bulova's owner, decided to create a veritable 'watch pole', as the 'only way to survive in the current economic environment for watches'. But how to go about it?
A number of studies were ordered that all made the same observation. Outside of the United States, the brand still enjoyed a fine reputation with people over the age of forty, and it had good potential, which needed to be developed. To create a true watch pole, the enterprise would need to create new and radically revisited collections as well as to acquire other brands.
One of the experts consulted was Robert Faessler. He had vast experience with the Swatch Group and held positions, among others, as President of cK Watches and Vice President of International Sales for Swatch SA. Faessler also developed Endura, the private label company of the Swatch group. He was the logical choice to head up Bulova's new European operations.
Fribourg was chosen as the headquarters since it is well situated from a logistical point of view and disposed of many superb facilities. From this new base, the brand plans on expanding not only into Switzerland, passage oblige, but also into the rest of Europe, Eastern Europe, the Middle East and Africa.
What is the Bulova of today?
At the beginning of the 1970s, Bulova was a brand on the cutting edge of innovation, notably with the famous Accutron, the first electronic watch in the world, based on transistors. This technology, however, would be swept aside by the arrival of the quartz movement, more precise, more reliable and of course smaller. Affected by the quartz crisis that rocked the Swiss watch industry, Bulova decided to pull up stakes and return to its roots, the United States where the enterprise was founded in 1875.
Bulova prospered in the U.S., but remained somewhat isolated from the influence of major international trends. In its own market, Bulova is a heavyweight, with sales of two million pieces in 2002. Prices range from US$ 100 for the Caravelle by Bulova up to US$ 500 for the Accutron. The brand is very active in the U.S. market and is engaged in a round of acquisitions, notably Wittnauer, a Harley Davidson license, and the buyout of major Canadian clock manufacturers.
Despite these good results, the rapidly transforming watch industry forces the American enterprise to take the initiative. Caught between the fierce competition of the fashion brands on one side and the new dynamism of Swiss brands seeking to expand into the strategic American market on the other, Bulova knows it must rise to the challenge on an international level. It must develop its own brand by diversifying its markets and at the same time grow through the acquisition of other companies.
“We don't want to open new markets simply to open new markets,” states Robert Faessler. “We are going to proceed step by step, beginning by strengthening our position where we are already established.”
Among the countries in Europe, there is one where Bulova is already well established – Italy. In 2002, Bulova sold 45,000 pieces there through its direct distribution subsidiary after the licensing agreement with Egana expired. (Until the creation of Bulova Swiss SA, Egana distributed the brand in European and Asian markets.)
The brand will give priority to strengthening its presence in Italy and, during 2003, will move into the Swiss, German and French markets. Gradually, from its Fribourg headquarters, Bulova intends to set out in conquest of other European markets, as well as markets in the Middle East and Africa. (Distribution in South America is managed directly from the branch office in Miami. Asia is handled by a subsidiary in Hong Kong.)
Another brand in an already saturated marketplace? To this rather provocative question, Robert Faessler responds by enumerating the many advantages enjoyed by his brand, including, more precisely, its positioning.
“Bulova is going to position itself in Europe as an historic brand,” he declares, “one that has contributed to the development of modern watchmaking since its inception, both in terms of its products as well as in marketing. Bulova was the first company to standardize its pieces at the turn of the century. It was the first brand to advertise on the radio with its famous 'It's Bulova Time'. It was the first watch to be sold aboard aircraft. It was the watch used by the American Army during WW II. It actively participated in the space adventures of the Gemini and Apollo programs and its Accutron electronic movement was totally revolutionary,” he explains. “This historic heritage is at the centre of our efforts. In our opinion, it is the capital that we are going to explore and exploit.”
The complete offer of Bulova, which has traditionally been a broad-based brand, is going to be entirely reviewed and redesigned. “We will not place American products on the European market,” affirms Faessler. “This is because they simply won't sell. Culturally, they are two completely different markets…”
In Europe, the accent will be placed on the basic watchmaking dimension of the brand. Bulova intends to make “new contributions and new developments in the technological area of watchmaking.” This is a 180° shift for the brand, which contrasts sharply with the lowering of average prices and the earlier recourse to Hong Kong. But, Faessler is betting on a completely Swiss Made product. “100 per cent of the pieces will be Swiss Made,” he promises. Half of the new collections are composed of redesigned Accutron models. Some 20% are existing Bulova models to be produced according to Swiss Made criteria and the remaining 30% are original timepieces created by a pool of European watch designers.
2003, a year of transition
Very clearly, 2003 will be a year of transition for Bulova. “In 2004, 20 per cent of the transition products will have disappeared,” explains Robert Faessler. “The Accutron will represent only 35 per cent, with the remaining 45 per cent being original creations.”
The sociology of the brand's potential clients will also fully play a role in the new strategy. “Everyone 45 years of age and older remembers Bulova,” observes Faessler. “Those younger than 45 have forgotten it. Strategically, our first target is then the age group over 45. This involves particular choices. A special accent is placed on the mechanical and automatic timepiece, classic lines, high quality, and great attention to details.”
The collection will therefore be divided into six families: Mechanical, Classic, Sport, Sport Dress, Fashion and 18 carat gold. Each family will be complete, with all the varieties imaginable in order to have a truly wide-ranging offer that is consistent and clearly structured. The average price will obviously increase, yet will still remain in a moderate range. According to Faessler, the main competitors for Bulova are Tissot and Longines and in Italy, more precisely, Wyler Vetta and Breil.
Rendezvous in Basel
The real test will take place at the forthcoming Basel Fair where Bulova will present its new collections and their packaging, sales material and communication programs at its stand in Hall 5.
Robert Faessler is confident. “The potential of the Bulova brand is enormous. Even before having presented anything except a simple press conference, we are inundated with offers. About 150 sales points in Germany are interested and five French distributors are trying to obtain the brand. And, these are but only a few examples. My past experience has allowed me to get to intimately know and understand the vast network that we are reactivating right now. We are also not excluding the possibility of dealing directly with some markets, but we are going to be prudent in our approach. Each time, we must assure ourselves that we have the right product for the right moment. We cannot allow ourselves any room for error.”
It is much too early to make any predictions. The team is getting into place. At the beginning, in any case, there will be a person in charge of each sector, such as finance, logistics, client follow-up and after-sales service, technical department, product development and merchandising.
In today's current economic climate, the time just may be right for the (re)launch of a moderately priced and broad-based brand such as Bulova.