Ramon Ecung's Blog

Many things go into knowing your target market which can be summed up if you know the four P’s: product, price, place, and promotion. Every company needs to at least have a very general idea about these categories before going to market or they’ll be sorely unprepared should any unexpected situations occur. This goes for companies that sell products (and services) from eggs to cars.

In 2008, a Swiss watchmaker Romain Jerome produced a watch that retailed for $300,000 USD that only told the wearer whether it was day or night (Frank, 2). Most people would balk at such a product, but Jerome must understand his target market because the watch sold out 48 hours after it’s launch (Frank, 9).

I’m sure most of his customers did not buy the item to tell if it was day or night which is a function any timepiece can perform. His customers purchased the item for three main reasons that all stem from the augmented product qualities:

• The technology in the watch is superior to most (the unit has two tourbillons, a device which counteracts the Earth’s gravitational field which negatively effects a watches performance (Frank, 3))
• The materials in the watch are rare (it’s made with steel salvaged from the Titanic (Frank, 3))
• The timepiece is unique and attracts attention (the unit was only in production for a limited amount of time)

All of these reasons are closely related and goes beyond the core and actual product: they all provide excuses for the owner to talk about it and “show off”. It’s closely related to why people buy a BMW over a Toyota, or a Bently over a BMW. They give the owner a certain social status and attention that certain people enjoy.

A similar product was released on the iPhone app store. It was a product called “I Am Rich”, which retailed for $1,000 USD (Wagenseil, 3). The application simply displays an image on the screen. The application is completely useless except to remind you that you are rich enough to own it (Wagenseil, 8). Apparently 8 people purchased the application before the Apple removed it from the App Store (Fox News, 1).

Jerome’s company perhaps understood the marketing mix better than one would think at first glance. They could have made the watch in a very limited quantity (for example, 5 units) and put out press releases that he had such a watch for sale. He gained free publicity for the unit by news outlets that his potential customers pay attention to even if they didn’t buy that particular watch. Because the watch sold out, people are still talking and writing about it, which keeps his name in the public’s awareness when they think of quality. And because the watch sold out, it looks like his high priced item has so much demand, that if I can afford a cheaper unit with Jerome’s name on it, a potential customer may think themselves lucky to own one.

In all, it’s a great strategy to gain public awareness and sell lower priced items (which may have a much higher margins). The customers that actually valued the watch at $300,000 got a great work of art, and at that price, I doubt they had to check their bank account before they wrote the check.

Wagenseil, Paul. “‘I Am Rich’ iPhone Application Retails for $1000″. Fox News. 2/15/2010 <http://www.foxnews.com/story/0,2933,398903,00.html>.

“‘I Am Rich’ iPhone App Removed After 8 Bought It”. Fox News. 2/15/2010 <http://www.foxnews.com/story/0,2933,399461,00.html>.

Frank, Robert. “The $300,000 Watch That Doesn’t Tell Time”. The Wall Street Journal. 2/15/2010 <http://blogs.wsj.com/wealth/2008/04/25/the-300000-watch-that-doesnt-tell-time/tab/article/>.