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Chapter One

Introduction

Rossini is a nationally renowned company subordinate to the Hong Kong listed

company China Haidian Holdings (HK.00256) and it is in leadership of China’s

watch brands. Rossini’s cornerstone was a

watchmaker and its predecessor was a

manufacturing factory Swiss watchmaker

opened in Singapore to manufacture

watchcases. In 1984, Rossini moved to

Zhuhai and established the first joint venture

of the Chinese watch industry. And it is

committed to creating the high-quality, high-taste and high-tech famous cultural

products of timepieces for consumers, and attracts the attention of hundreds of

millions of consumers with a unique minimalist style and wisdom connotation.

After years of market operations and brand heritage, Rossini has grown into the only

one ranked in “Asia Brand Top 500” among the Chinese watch industry, and it is

gradually developing into an internationally diversified fashion boutique

corporation. At present stage, Rossini has set up watches and eyewear boutique

manufacturing and brand marketing as well

as the first watch cultural and industrial

tourism project in South China. It has been

equipped with the capability that

manufacturing and developing hundreds of

new products annually and the annual

production capacity reached one million with

500 staff and more than 2,000 sales force in headquarters, and the outlets spreading

throughout the country. The brand value, market sales and comprehensive market

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share of Rossini ranks the first in China’s watch industry and it has been regarded as

“Famous Chinese Trademark” of watch industry domestically and the most popular

brand-name products.

Defining Marketing Management (Theory 2000 – 2010 & Theory 2011 – 2015)

Definition of Marketing Management (Theory 2000 – 2011)

Marketing management is the art and science of choosing target markets and getting,

keeping, and growing customers through creating, delivering, and communicating

superior customer value.

Definition of Marketing Management (Theory 2012 – 2016 ±)

Marketing management depends on the size of the business and the industry in

which the business operates. Effective marketing management will use a company's

resources to increase its customer base, improve customer opinions of the company's

products and services, and increase the company's perceived value.

How the Definitions are Related with Company’s Marketing Management

Rossini watch follows Fribourg`s classic style which is devoted to brand creation. It

combines Chinese and western culture and conforms to the fashion trend of different

periods. Rossini is famous by virtue of personalized design, premium quality,

excellent performance, enjoyed a high reputation in China. It insists that each watch

is an ideal combination between spirit and handcraft, which gives you a noble and

romantic taste. Rossini has been awarded as "Chinese famous brand" by the Chinese

Famous Brand Strategy Promotion Committee and "China Well-known Trademark

"title by the "National Industrial and Commercial Administration Bureau and

Trademark Office. Rossini was also exported to developed countries in Europe and

the United States.

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Rossini promises watch battery purchased from Rossini counter, legal online sales

platform or flagship stores is able to work normally at least for one year; If the

battery is exhausted less than one year, you can turn to Rossini authorized service

center and exchange a new one for free by showing the invoice or valid warranty

card. They also promises to bill legal national added-value tax invoice for watches

purchased from Rossini counter, legal online sales platform or flagship stores.

Rossini promises every buyer of Rossini watches from Rossini counter, legal online

sales platform or flagship stores is honored our VIP and given Rossini presents,

purchasing discounts and allowance to join membership activities and so on.

Mission – Vision – Business Plan – Corporate Strategy

Mission:

Rossini employs time to witness its extraordinary achievements and enriches the

value and connotation of time with its extraordinary achievements, and gives voice to

the perfect interpretation:

Time always follows me!

“Build a world watch corporation of China’s own and let Chinese people wear their

own world watches.” Rossini is implementing a strategic plan that China Haidian

Holdings is committed to, namely, developing into the leader of widely-known

watches as well as the manufacturing and sales corporation of timepieces and related

accessories. Rossini constantly consolidates the leading position in the industry and

tries to expand international market, improves the watch industry chain and creates

an international brand in a diversified and all-dimensioned way.

Vision:

“To create a high-quality, high-tech, high-taste-known timepieces cultural products;

regarding internationalization and diversification as the goal, to maintain a sustained

growth; to build a century-old shop, to establish a century-old brand and to achieve

sustainable development”

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Corporate Strategy:

Rossini continuously regards a world-class quality as faith, promotes technology

innovation, seeks excellent quality, and strives to perfect watchmaking philosophy.

It always pursues to create the most precise and reliable timepieces with the help of

internationally advanced manufacturing process and the superb Swiss watchmaking

technology.

Rossini advocates standardization management mode which says “market is the

guiding; standard is the base; brand is the core.” It always strengthens enterprise’s

independent innovation ability. The enterprise strives to attain the advanced

technology of the worldwide watch industry in not only hardware but also software.

In the 1990s, as a professional watchmaking company, Rossini was second to none

and owed the domestic top-ranking matrix process center and the diamond knives

process craft which were rare in the business. In the recent years, in order to create

the most precise and reliable design and provide the customers with high-quality and

high-taste-known product, the company invests a large number of funds annually to

deploy watch design and manufacturing system on international standards and to

acquire sophisticated detection equipment. By right of advanced technology and the

intensive and careful work, the company realizes the ultimate pursuit of quality and

accelerates the transformation of technological achievements. Rossini built an

independent enterprise technical center which was identified by the Guangdong

Provincial Enterprise Technology Center. The enterprise was awarded the title of

national high-tech enterprises. At the same time, Rossini cited the internationally

advanced management means and management mode. It took the lead in obtaining

the certification of ISO9001 international quality management system, ISO14001

international environmental management system and ISO18000 industrial safety

and health management system in Chinese watch enterprises. Rossini integrates with

the world advanced standard in quality and management.

Every Rossini watch assembles innovative design and exquisite watchmaking craft

together; every Rossini watch comes into being after lots of processes. Every product

in Rossini is a combination of heart and craft. Rossini’s noble and elegant

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temperament, slender and smooth line, exquisite and particular workmanship endow

people who wear it with decent and romantic cultural tastes and comfortable and

satisfied feelings. Up to now, Rossini has created more than 800 kinds of watches

independently and more than 300 of them have got apparent design patent and

national realistic type patent. Rossini is praised widely in the market with its concise,

noble, elegant and smooth design style. It won the "Apparent Design Award" issued

by the Organizing Committee of China International Watch Fair many times. The

photovoltaic energy and photoelectric wave watch won the “Cotton Tree Supreme

Award” of Chinese innovative design.

“Build a world watch corporation of China’s own and let Chinese people wear their

own world watches.” Rossini is implementing a strategic plan that China Haidian

Holdings is committed to, namely, developing into the leader of widely-known

watches as well as the manufacturing and sales corporation of timepieces and related

accessories. Rossini constantly consolidates the leading position in the industry and

tries to expand international market, improves the watch industry chain and creates

an international brand in a diversified and all-dimensioned way.

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Chapter: 2 SWOT Analysis of ROSSINI Watches

In SWOT Analysis the external and internal environment analysis is done in which

the strength and weakness is internal to the organization and opportunities and

threat is external to the organization. Below the SWOT analysis of ROSSINI

Watches has been discussed:

Strength:

Rossini has established its brand on its excellent quality. Its style of "simplicity,

nobility, elegance and smoothness" brings the essence of Chinese and Western

cultures and humor aesthetic requirements together, and hence creating Rossini's

eternal quality and varying styles. It insists that each watch is an ideal combination

between spirit and handcraft, which gives you a noble and romantic taste.

1. Mass appeal, especially for the youth

2. Association with Tata Groups Titan Industries increases brand reliability

3. Changing designs reflecting the changing needs of the Indian consumer

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4. One of the most trusted brands in India

5. Good marketing and advertising strategies by roping in celebrities to attract

the customers

Weakness:

The weaknesses of Rossini watches could be its very traditional design. As the follow

the traditional design of china. This design may not be liked by the people of other

countries. And the price of the luxury watches could be a problem.

1. Positioned as a watch for the masses, it will be difficult for Rossini as a brand to

establish itself in the mid income category

2. Despite being a quality product, it has limited global presence compared to some

other brands

Opportunity:

Rossini watches are cheaper than the other big brands. But their quality is very high.

1. The lower end market for Rossini is highly unorganized with few brands having

brand recall as high as Rossini

2. Global penetration would help brand grow and target youth worldwide

3. Tie-up with fashion houses and special schemes for youth

Threat:

The major threat will arise from the local brands. As local brands are selling watches

at a low cost. There are also very famous watch brands available in the market; for

example Casio, Rado, Titan etc. They have already created a market over here.

1. The Lower end Watch market is highly price sensitive with higher chances of

brand switching

2. Entry of foreign players has led to tough competition

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PESTEL Analysis of ROSSINI watches

Political Analysis for ROSSINI:

Though structure and leadership play a large role in

business success, external factors can also shape

company's potential. One method for systematically

discovering and quantifying those factors is the

PESTEL analysis. A PESTEL analysis looks at how

external factors can affect a business's activities and performance. Tax policy,

employment laws, environment regulations, trade restriction and tariffs have much

ROSSINI

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effect on a business. The political analysis includes these factors. Rossini Watches

could have gain a very good market in Bangladesh. But the political situation of

Bangladesh is very unstable. So they have to be very careful and be prepared for this

kind of situations. There are trade and tariff restrictions in our country. These are

also should kept in mind before coming to the market. The labor of Bangladesh is

very cheap that will be a positive point for Rossini. Other political stable countries

like USA, Japan, Europe countries could be more relaxed for businesses.

Economic Analysis for ROSSINI:

Economic factors regard as how the economy impacts a business in terms of income,

interest rate, inflation, tax policy, government spending, and general demand. For

example:

Higher interest rates may put off investment because it borrowing is more

costly.

A strong currency could make exporting harder because it could raise the price

in terms of foreign currency.

Inflation may affect higher wage demands from employees and increase costs.

Higher national growth of income may increase demand for a firm's products.

This factor examines the outside economic issues that can play a role in a company's

success. Items to consider include economic

growth, exchange, inflation and interest

rates, economic stability, anticipated shifts in

commodity and resource costs,

unemployment policies, credit availability

and unemployment policies. Economic

growth of a country would help or sometimes

may cause a disadvantage for a company.

High economy growth of a country is more suitable for Rossini watches. But

developing countries like India, Bangladesh, and Brazil can be a great market for

Rossini. If the interest rate fluctuates or inflation is very high then it would be

challenge for Rossini to conduct businesses.

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Social Analysis for ROSSINI:

Changes in social trends can affect on the demand of a firm's goods and the

availability and keenness of individuals to work. It includes the standard of living,

religion, fashion, civilization,

education etc. Also, the ageing

population has an effect on demand.

This issue analyzes the demographic

and cultural aspects of the company's

market. These factors help businesses

examine consumer needs and

determine what pushes them to make

purchases. Among the items that

should be examined are demographics, population growth rates, age distribution,

attitudes toward work, job market trends, religious and ethical beliefs, lifestyle

changes, educational and environmental issues and health consciousness.

Technological analysis for ROSSINI:

Technological factors consider how the fast the pace of change in production

processes and product advance impact a business. Technology can minimize costs,

improve quality and lead to improvement. These developments can help consumers

as well as the organizations providing the goods. For example, new discoveries and

inventions such as: MP3 players, laptops,

online gambling and high definition TVs.

Online shopping, bar coding and computer

aided design are all technology

advancements to the manner we do business

as a result of better technology. This factor

takes into consideration technology issues

that affect how an organization delivers its product or service to the marketplace.

Among the specific items that need to be considered are technological advancements,

government spending on technological research, the life cycle of current technology,

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the role of the Internet and how any changes to it may play out, and the impact of

potential information technology changes. In addition, companies should consider

how generational shifts, and their related technological expectations, are likely to

affect those who will use their product and how it is delivered. Information and

communication technology is a powerful driver for growth and innovation. Rossini

watches have to cope up with the updated technologies to keep their growth up in the

world.

Ecological Analysis for ROSSINI:

Some businesses see profits as more valuable

than a strong ethical code and this can run

behavior and business conduct. Some

unethical practices are illegal and companies

can not become involved in them. However

there are also some practices that are legal by

law but are considered highly unethical by the

consuming public. Companies who take on in

these practices can lose a lot of market share if they are caught. For example,

cosmetic testing on animals is legal, but some of the general public aren’t happy

about it and boycott. Because of this companies, companies must be very cautious

about how they conduct themselves.

Rossini watches have managed to be pretty environmentally friendly and have not

offended the general public in any way. They have been very cautious about this and

thus, this is one of the many reasons they are a popular brand of watches.

Legal Analysis for ROSSINI:

Legal factors include - health and safety,

equal opportunities, advertising

standards, consumer rights and laws,

product labeling and product safety. It is

clear that companies need to know what is

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and what is not legal in order to trade successfully. If an organization trades globally

this becomes a very tricky area to get right as each country has its own set of rules

and regulations.

Rossini watches take necessary actions for the health and safety of its employees.

They should know about the legal rules and regulations of different countries to run

their business successfully.

Porter's 5 Forces Business Model

Competitive Rivalry:

Segment rivalry or rivalry amongst the competitors in a (given) industry refers to the

center of the model of Michael Porter’s Five Forces which is influenced by other

factors. When there are numerous competitors in a segment and they are competing

aggressively, the segment becomes unattractive. If the industry is stable or declining

then the segment becomes even more unattractive. Price discounts, new product

introduction, new ad campaigns and service improvements are some of the outcomes

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of rivalry. All this reduces profit for the industry as a whole and make the segment

less attractive. The key issue is the intensity of the rivalry and the main basis of

rivalry in the industry that ultimately determines the attractiveness. For most

industries the intensity of competitive rivalry is the major determinant of the

competitiveness of the industry.

Potential factors that will affect Rossini are;

Sustainable competitive advantage through innovation

Competition between online and offline companies

Level of advertising expense

Powerful competitive strategy

Firm concentration ratio

Degree of transparency

Threat of New Entrants in the Segment:

According to the 5 Forces model the most attractive segment is the one in which

entry barriers are high and exit barriers are low (Porter, 2008). A situation where

few new firms can enter the industry and poorly performing firms can easily exit is

better. According to the 5 Forces model the most attractive segment is the one in

which entry barriers are high and exit barriers are low (Porter, 2008). A situation

where few new firms can enter the industry and poorly performing firms can easily

exit is better. When we look at the Hong Kong industry of Watch we see that entry

and exit barriers are not difficult. The following factors can have an effect on how

much of a threat new entrants may pose to Rossini watches:

The existence of barriers to entry (patents, rights, etc.). Government policy

Capital requirements for other watch companies

Absolute cost

Cost disadvantages independent of size

Economies of scale

Economies of product differences

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Product differentiation

Brand equity

Switching costs or sunk costs

Expected retaliation

Access to distribution

Customer loyalty to established brands

Industry profitability (the more profitable the industry the more attractive it will

be to new competitors)

Threat of Substitute Products:

The segment is unattractive when there are actual or potential substitute. Substitute

product for Rossini watches would be other similar watch companies. The existence

of products outside of the realm of the common product boundaries increases

the propensity of customers to switch to alternatives.

Potential factors that Rossini will face the threat are as follows:

Buyer propensity to substitute

Relative price performance of substitute

Buyer switching costs

Perceived level of product differentiation

Number of substitute products available in the market

Ease of substitution

Substandard product

Quality depreciation

Threat of Buyers’ Bargaining Power:

When the buyers possess strong or growing bargaining power a segment becomes

unattractive. The bargaining power grows when buyers can become more

concentrated and organized and have a lot of options. If switching costs are low of

other watch then Rossini will face a greater bargaining power of buyer.

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Potential factors are as follows:

Buyer concentration to firm concentration ratio

Degree of dependency upon existing channels of distribution

Bargaining leverage, particularly in industries with high fixed costs

Buyer switching costs relative to firm switching costs

Buyer information availability

Force down prices

Availability of existing substitute products

Buyer price sensitivity

Differential advantage (uniqueness) of industry products

RFM (customer value) Analysis

The total amount of trading

Threat of Suppliers’ Growing Bargaining Power:

The suppliers bargaining power can put Rossini into trouble. The potential factors of

supplier growing bargaining power are:

Potential factors are:

Supplier switching costs relative to firm switching costs

Degree of differentiation of inputs

Impact of inputs on cost or differentiation

Presence of substitute inputs

Strength of distribution channel

Supplier concentration to firm concentration ratio

Employee solidarity (e.g. labor unions)

Supplier competition: the ability to forward vertically integrate and cut out the

buyer.

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Chapter 3 SEGMENTING CONSUMER MARKETS

1) Geographic Segmentation

Demand for watches will vary from country to country. That’s why geographic

segmentation is very important for every company. Geographic segmentation calls

for dividing the market into different geographical units. More and more, regional

marketing means marketing right down to a specific postal code. Marketers can

segment according to geographic criteria—nations, states, regions, countries,

languages, cities, neighborhoods, or postal codes. The geo-cluster approach

combines demographic data with geographic data to create a more accurate or

specific profile. With respect to region, in rainy regions merchants can sell things like

raincoats, umbrellas and gumboots. In hot regions, one can sell summer clothing. A

small business commodity store may target only customers from the local

Geographic

Demographic

Psychographic

Behavioral

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neighborhood, while a larger department store can target its marketing towards

several neighborhoods in a larger city or area, while ignoring customers in other

continents. Geographic Segmentation is important and may be considered the first

step to international marketing, followed by demographic and psychographic

segmentation. The use of national border is the institutional use of geographic

segmentation, although geographic segments may be classified by identified

geological regions.

2) Demographic Segmentation

In demographic segmentation the market is divided into groups on the basis of

variables such as age, family size, family life cycle, gender, income, occupation,

education, religion, race, generation, nationality, and social class. Consumer needs,

wants, usage rates, and product and brand preferences are often associated with

demographic variables. Demographic variables are easy to measure.

Age and Life-Cycle Stage: Rossini segments the market according to age of

people. The choice of watches differs by ages. There are different products for

kids, young people and older people. Consumer wants and abilities change

with age.

Life Stage: Persons in the same part of the life cycle may differ in their life

stage. Life stage defines a person‘s major concern. These life stages present

opportunities for marketers who can help people cope with their major

concerns.

Gender: Men and women tend to have different attitudinal and behavioral

orientations, based partly on genetic makeup and partly on socialization.

That’s why products for men and women are different. The color and design of

products will differ gender wise. Rossini segments the market according to

gender. Some traditionally more male-orientated markets, are beginning to

recognize gender segmentation, changing how they design and sell their

products.

Income: Income segmentation is a long-standing practice in product and

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service categories. However, income does not always predict the best

customers for a given product. Increasingly, companies are finding that their

markets are “hourglass-shaped” as middle-market Americans migrate toward

more premium products. Rossini segments their watch market according to

income of the people as well.

Generation: There are different types and categories of Rossini product for

different generation of people. Each generation is profoundly influenced by

the times in which it grows up. They share similar outlooks and values.

Marketers often advertise to a cohort group by using icons and images

prominent in the experiences of such a cohort group.

Social Class: Social class has a strong influence on preferences for

consumers. Many companies design products and services for specific social

classes. Rossini has to take care of this segment of market as well.

3) Psychographic Segmentation

Psychographics is the science of using psychology and demographics to better

understand consumers. In psychographic segmentation, buyers are divided into

different groups on the basis of lifestyle or personality or values. One of the most

popular commercially available classification systems is SRI Consulting Business

Intelligence‘s VALS framework.

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The major tendencies of the four groups with high resources are innovators, thinkers,

achievers and experiencers. The major tendencies of the four groups with lower

resources are believers, strivers, makers and strugglers.

Innovators: Innovators are successful, sophisticated, take-charge people with high

self-esteem. Because they have such abundant resources, they exhibit all three

primary motivations in varying degrees. They are change leaders and are the most

receptive to new ideas and technologies. Their purchases reflect cultivated tastes for

upscale, niche products and services.

Thinkers: Motivated by ideals; high resources

Thinkers are mature, satisfied, comfortable, and reflective. They tend to be well

educated and actively seek out information in the decision-making process. They

favor durability, functionality, and value in products.

Believers: Motivated by ideals; low resources

Believers are strongly traditional and respect rules and authority. Because they are

fundamentally conservative, they are slow to change and technology averse. They

choose familiar products and established brands.

Achievers: Motivated by achievement; high resources

Achievers have goal-oriented lifestyles that center on family and career. They avoid

situations that encourage a high degree of stimulation or change. They prefer

premium products that demonstrate success to their peers.

Strivers: Motivated by achievement; low resources

Strivers are trendy and fun loving. They have little discretionary income and tend to

have narrow interests. They favor stylish products that emulate the purchases of

people with greater material wealth.

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Experiencers: Motivated by self-expression; high resources

Experiencers appreciate the unconventional. They are active and impulsive, seeking

stimulation from the new, offbeat, and risky. They spend a comparatively high

proportion of their income on fashion, socializing, and entertainment

Makers: Motivated by self-expression; low resources

Makers value practicality and self-sufficiency. They choose hands-on constructive

activities and spend leisure time with family and close friends. Because they prefer

value to luxury, they buy basic products.

Survivors: Survivors lead narrowly focused lives. Because they have the fewest

resources, they do not exhibit a primary motivation and often feel powerless. They

are primarily concerned about safety and security, so they tend to be brand loyal and

buy discounted merchandise.

4) Behavioral Segmentation

In Behavioral segmentation, buyers are divided into groups on the basis of their

knowledge, attitude, toward, use of, or response to a product.

Marketing Mix

This business tool will help Rossini’s marketers to determine what watch related

offerings to be made, at what price, who the targeted customers will be, how to

promote the watches to the masses, which point of distribution to be selected and so

on.

There are two ways of marketing mix, a combination of which a Rossini marketer can

use when dealing with the target segment:

7Ps

4Cs

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7Ps:

Product: The quality of watches to be offered needs to be considered. Low quality

watches won’t attract the premium market. Also the design should go with the

premium target market as well. Other factors include the packaging of the boxes,

warrantees, sub-brands and features with each style of watches.

Price: The price should match with the target segment. If the watches are targeted for

premium markets then they should charge that appropriate price.

Promotion: The best way to promote a premium watch would be through posting

advertisements on TV channels and newspapers or lifestyle magazines. Sales

promotion can be an alternative where the watches can be offered being sold at a

discount during religious festivals, wedding seasons or new year’s.

Place: The point of distributions should catch the eye of the customers. The points

should be attractive looking Rossini outlets or large retail watch sellers who sell

watches made by different brands and are situated in large shopping malls.

Physical evidence: Rossini should help the customers gain a clear first impression

about the watch by helping them seeing the watch in their own hands and by

providing a warm service environment in their outlets through sight, touch, service

environments.

Process: This will be a form of self-service technology where the customers

themselves will operate the product.

People: The staffs need to be engaging with the customers so that they make the

customers interested in the product.

4Cs:

Clients: Rossini should undergo a market research through which they can

understand what kind of watch customers are looking for and what impression do

they have in mind when they think of a premium watch so that products can be

designed accordingly.

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Costs: All costs should be considered while designing the product which means the

costs incurred to make the watches and the costs incurred by the customers to gain

the product. In this way they can do appropriate pricing and make the customers

feel that Rossini understands what a customer goes through to purchase a watch in

terms of costing.

Convenience: Rossini needs to understand the appropriate locations where the

distributions can be done easily from the perspective of the customers so that the

products gain a wide reach.

Communications: All sorts of communications done between Rossini and its clients

should be clear and engaging so that consumers do not feel confused about the

products and customers feel interested to buy the product.

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Marketing Mix Diagrams for Rossini

7Ps:

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4Cs:

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Chapter 4 The Value Chain

The value chain is a tool for identifying ways to create more customer value

because every firm is a synthesis of primary and support activities performed to

design, produce, market, deliver, and support its product.

As Rossini’s market is limited to Hong Kong and its adjacent countries, it is likely it

might face a dip in sales at times as the market is limited. Expanded markets would

have helped them to cover that problem but limited markets would not.

And as we all know China can come up with quality products at a lower price and in

cases make replicas of the original one. This may cause Rossini to face competition

from local markets in terms of price and lose credibility if their products are

replicated which will be sold at a lower price provided that China enters the Hong

Kong markets with replicas.

Rossini should focus to create value for its customers. That is the way the customer

will rely on the product and the products will gain credibility.

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Figure: Porter’s Generic Value Chain

If we look at the above diagram of value chain we can find ways how Rossini can

create customer values for its products:

A) Primary activities:

1) Inbound logistics (material procurement): Rossini needs to find ways how

cost effectively Rossini procures its raw materials for the products. But besides

procuring the materials in a cost effective way it should ensure the source of

raw materials are providing quality. Quality raw materials will ensure quality

finished products.

2) Operations (turn into final product): Hong Kong is good in technology hence

they possess advanced production methods to turn the raw materials into

quality final product. They should go for fast production methods so that they

can go for mass production in short-time. Also the whole production method

should be up to date so that they can have quality finished product. The whole

idea should be about turning the raw materials into final product effectively

and efficiently.

3) Outbound logistics (shipping and warehousing): Rossini should have heavily

guarded and well maintained storage capabilities. Not all the finished watches

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will be sold at a time. Some will remain unsold while the rest of the batches

will be need to be stored to meet shortages in supply. For all that a safe

warehousing system should at different parts of the country. The shipping

facilities should be such that it takes less time to transport the products and

can also be maintained safely while on the way to the destination.

4) Marketing (marketing and sales): Marketing and Sales should be such that the

target market can be influenced. Marketing and Sales approach for premium

watches are more formal and sophisticated. Marketing and Sales approach for

sports watches are more youth oriented. Rossini should have separate

marketing and selling approaches for each of its segmented groups.

5) Servicing (service after the sale): After sales service should make the

customers at ease so they don’t fall into hesitation or difficulty after buying the

product. Rossini should have the image in the customers’ minds that after

buying the product they don’t have to fall in a problem in case an after sales is

required. Also the services required by the customers after buying the product

should be looked after promptly so that customers can feel Rossini doesn’t

want to waste valuable time of their customers and they are most sincere while

looking after the problems of their customers.

B) Support activities:

1) Procurement: A well trained procurement is required to ensure quality

supply chain management. The inputs needed to produce watches are

sophisticated in nature and hence care should be taken so that

procurement ensures quality inputs.

2) Technology development: As said earlier Hong Kong has advanced

technology for which top quality production is not a problem. Also they

can borrow technological help from China who are one of the advanced

nations in terms technology. Together they can produce top quality

watches and may be even able to offer them at qualitative pricing.

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3) Human resource management (HRM): HRM department should see to it

that the workforce is well trained and qualified and have good technical

skills. Making watches are technological and technical fields of

specialization. Hence HRM department should see to it that workforce

knows the nitty-gritty of watch manufacturing as well as they have good

experience in it. Also safe work conditions should be ensured as accidents

might take place anytime in manufacturing plants. Compensation

packages should be satisfactory and should increase with performance.

The HRM also needs to see experienced and qualified marketing

professionals are hired to market the products otherwise they won’t be able

to maintain market share.

4) Firm infrastructure: This refers to an organization's structure and its

management, planning, accounting, finance and quality control

mechanisms. Rossini should ensure that they have a proper management

who can manage properly the whole operations, have an expert team

looking after finance and accounts so that no fraud takes place and proper

budgeting can be done and maintain strict Total Quality Management

(TQM) so that the final products are strictly quality controlled.

Total Quality Management

Total quality management (TQM) is an organization-wide approach which Rossini

can use to continuously improve the quality of all the organization’s processes,

products, and services. Product and service quality, customer satisfaction, and

company profitability are intimately connected.

If Rossini cannot ensure quality finished watches and cannot ensure quality after

sales services, then the customers won’t be satisfied using the product as they will

experience below standard services hence these unsatisfied customers will switch to a

different brand. Thus Rossini will lose market share and their profitability will go

down.

Page | 29

Rossini should focus on why they are in the business rather than how they are doing

the business. Otherwise TQM will have problems in implementation. They are in the

business to satisfy the demand of the customers for quality watches. This is what

they should focus on rather than how they are satisfying the customers.

TQM ran into implementation problems as firms became overly focused on how they

were doing business and not the why were in business.

Reducing Customer Defection

Five main steps a Rossini can take to reduce the defection rate:

1. Rossini must define and measure its retention rate. Retention rate is the ratio

of the number of retained customers to the number at risk. Rossini should

count customers and track customer activity irrespective of the number of

transactions (or dollar value of those transactions) made by each customer.

2. Rossini must distinguish the cause of customer complaints and identify those

that can be managed better and reduce the scope of future complains.

3. Rossini needs to estimate how much profit it loses when it loses customers.

Hence it can then work out more and focus on reducing defection rate in order

not to lose customers.

4. Rossini needs to figure out how much it would cost to reduce the defection

rate. If the defection rate is highly significant then they can spend heavily on

reducing defection rate.

5. Finally, Rossini should build up the practice of listening to customers. Rossini

should always take the feedback into account from the customers regarding

whatever they have to say for Rossini watches.

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Chapter Five Brand & Branding

Rossini Watch (Hong Kong) Limited was

established in 2003. The classic logo of "Time

always follows me" echoes the profound brand

culture. Rossini has established its brand on its

excellent quality. Its style of "simplicity, nobility,

elegance and smoothness" brings the essence of

Chinese and Western cultures and humor

aesthetic requirements together, and hence

creating Rossini's eternal quality and varying

styles.

Just as the great opera composer Dro Aquino Rossini creating a new romanticism

opera the first of its kind and building a splendid monument in the palace of art in

the 19th century, Rossini led the way of centuries-old watchmaking culture essence

in the medieval city Fribourg in the kingdom of watches and clocks--Switzerland. As

time ticking away, Rossini is always carving every minute and every second

perpetually and becomes the outstanding representative in watchmaking industry

with its noble and elegant temperament.

Brand Story

Just as the great opera composer Dro Aquino Rossini creating a new romanticism

opera the first of its kind and building a splendid monument in the palace of art in

the 19th century, Rossini led the way of centuries-old watch making culture essence

in the medieval city Fribourg in the kingdom of watches and clocks--Switzerland. As

time ticking away, Rossini is always carving every minute and every second

perpetually and becomes the outstanding representative in watch making industry

with its noble and elegant temperament.

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Like many watch companies who own a long history, Rossini has always been

adhering to the classical and contracted artistic style and design concept. It

experienced ordeals but staying fresh, inherited patronage of the romanticism art,

and achieved the ultimate pursuit for quality with intensive and careful work. As the

beauty of the years precipitating and culture collection inherited, Rossini is

acclaimed and adored by people widely by right of its natural artistic heritage as well

as the noble and elegant disposition.

Box Analysis of Brand Elements (6 Categories)

Brand elements can play a number of roles. If consumers do not examine much

information in making their product decisions, brand elements should be easily

recognized and recalled and inherently descriptive and persuasive. Memorable or

meaningful brand elements can reduce the burden on marketing communications to

build awareness and link brand associations. The different associations that arise

from likeability and appeal of the brand elements may also play a critical role in the

equity of brand.

Brand Element Choice Criteria

There are six criteria in choosing brand elements. Brand elements must be:

Memorable: How easily do consumers recall and recognize the brand element, and

when—at both purchase and consumption? Rossini is short and memorable brand

name.

Meaningful: Is the brand element credible? Does it suggest the corresponding

category and a product ingredient or the type of person who might use the brand?

Rossini reflects “Elegance” in meaning.

Likeability: How aesthetically appealing is the brand element?

Transferable: Can the brand element introduce new products in the same or different

Page | 32

categories? Does it add to brand equity across geographic boundaries and market

segments?

Adaptable: How adaptable and updatable is the brand element?

Protectable: How legally protectable is the brand element? How competitively

protectable?

Brand Dynamic Pyramid

Rossini advocates a harmonious culture, insists the core idea of “a century-old shop

and a harmonious family”, and creates a learning-oriented enterprise. In the

enterprise, the employees could not only pursue the personal career aspirations, but

also learn and improve skills. Continuing and perfect personnel training program

attracts and trains a large number of high-precision technology professionals.

People in Rossini regard the spirit of enterprise as “dream, passion and innovation”.

The dream is to dare to think. The passion is the attitude of acting. The innovation is

the way to realize dreams. The dream urges people in Rossini to build a first-class

watches group with lofty ambitions; the passion urges Rossini to attain a greater

glory, to continue creating and to maintain the vitality; the innovation shows that

Rossini people will continue to reform and surpass, and supply markets with optimal

product as well as build a brand development strategy with quality.

Rossini’s leaders are enlightened and employees are passionate. Vigorous work and

colorful life are the choice of Rossini people. In Rossini, the highly recognized

enterprise culture has been the embodiment of a kind of spiritual strength and

promotes the enterprises to move continuously.

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Rossini

Rossini Watch

Bonding

Advantage

Performance

Relevance

Presence

Strong relationship

Weak Relationship

Page | 34

Chapter 6 The Five M’s of Advertising

They then can make the five major decisions known as ―the 5Ms:

Mission: What are the advertising objectives?

Money: How much to spend?

Message: What message should be sent?

Media: What media should be used?

Measurement: How should the results be evaluated?

Mission

Time always follows me!

Money

Advertising Investment

HKD 5 Billion

Messages

Creates a high-quality, high-tech, high-taste-known

timepieces cultural products

Media

Television, Magazines,

Billboards, Internet and so on

Measurement

Customers from all around the

world

Page | 35

Rossini's spirit of enterprise is dream, passion and innovation. Rossini's enterprise

culture is reflected by a century-old shop and a harmonious family. Rossini's

business philosophy is to be market-oriented and to take the economic benefits as

the center and to achieve sustainable development.

Mass Communication

Advertising Budget and Campaign Cost:

First of all, we will have to bring Rossini in the minds of customers who are living in

Honk Kong. Which is why we will have to make a few advertisement campaigns on a

3 month period. This is definitely bring renewed perception about our brand in the

minds of the customer.

According to our advertising package there will be 10 billboards around Honk Kong

during the month of January, February and March. The cost of billboards per square

feet varies from location to location so we have taken an average rate. In billboard

advertising the ad company will advertise our ads according to our budget. They will

draw per day cost from our budget when our budgeted money is over they will

remove the ads. Also we will implement a clock made by Rossini in front of Hong

Kong Disneyland with accompanied by a billboard right beside it. Here are the

estimates of the required budget.

Page | 36

Billboard

Size

No. of

Billboards

Price / square

feet (HKD)

Per Day

cost

(HKD)

Budget Days

Advertised

1st month (May)

25 feet x

20 feet

10 80 4,000,00 120,000,00 30

2nd month (June)

25 feet x

20 feet

10 80 4,000,00 120,000,00 30

3rd month (June)

25 feet x

20 feet

10 80 4,000,00 120,000,00 30

Total 360,000,00 90

Clock 1,000,00

Grand Total for 3 months 361,000,00

Sales Promotion, Public Relation, Corporate Social and Budget:

For Rossini to target the upcoming corporate, young adults and youth alike,

promotions at Universities and Organizations alike has to be implemented.

Our sales promotion programs will contain various types of press release, corporate

dinners, and university campaigns for this we have set aside a budget to carry out

this programmers. A brief breakdown of this is given below:

Contents Budget (HKD)

University Campaigns 200000

Corporate Dinners 500000

Entertaining the Article Writers 50000

Expense related to Press

Conference

100000

Total 850000

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Events & Experiences/Sponsors:

We will hold and event which will be held on 15th April at 7: 00 pm. It is during the

event, all of the watches in Rossini’s portfolio will be displayed and sold on site. The

event will take place on a reputed convention center in Honk Kong.

The event night will have many activities. They are:

Invitation

Important Corporate houses will be invited

Owners and editors of TV channels.

Editors of popular Newspapers and magazines will be invited.

Popular TV celebrities will be invited.

General People

Program

There will be gift voucher.

Rossini souvenir (e.g. Key chain, Pen, calendars/notepads) will be given to

visitors (First come first served).

The main attraction will be pop music performance by popular musicians of

Hong Kong. They will cover songs of popular foreign bands and do native

songs.

The show will end with the big screen presentation about the Journey of

Rossini.

The event night will be covered in news of popular channels, newspapers and

magazines, so that the exposure is higher. The budgeting is shown in the next page.

Page | 38

Contents Budget (HKD)

Pop Concert 500000

Dinner for Corporate people

invited

500000

Entertaining the Article Writers 50000

Souvenir Gift 200000

Entertaining TV News Coverage

Team

50000

Total 13,00,000

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Chapter 7 Marketing Budget and Expenditure

In the previous section we talked about mass communication campaign strategies,

and we have shown the budget. Our overall marketing budget will be the same, which

makes the grand total shown below.

Contents Budget (HKD)

Outdoor Advertising 361,000,00

Sales Promotion, PR, CS 850000

Event 13,00,000

Grand Total 382,500,00

This will be our marketing budget and expenditure to rebrand Rossini in the minds

of the Hong Kong customers. It may seem a lot, but it is worth it as Rossini will gain

increased exposure, thus more profit margins.

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Pricing Strategies

For selecting the pricing objective, Rossini will have to decide where it wants to

position its market offering. The clearer are their objectives, the easier it is to set

price. Rossini will have to place product-quality leadership pricing objective.

Rossini can might aim to be the product quality leader in the market. Many brands

strive to be “affordable luxuries”—products or services characterized by high levels of

perceived quality, taste, and status with a price just high enough not to be out of

consumer‘s reach.

Steps in Setting Price

Select the price objective

Determine demand

Estimate costs

Analyze competitor price mix

Select pricing method

Select final price

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Rossini can analyze its competitors by range of possible prices determined by market

demand and company costs, they will have to take competitors’ costs, prices, and

possible price reactions into account. Rossini should first consider the nearest

competitor’s price.

As Rossini is in the promotional stage, they can set up lucrative discounts, during our

3 month marketing campaign. This gives a better opportunity for the customers to

experience the watches and give favorable word of mouth so as to increase the

consumer brand perception about Rossini.

Breakeven Analysis

Considering that we will renew the brand image of Rossini in the minds of the

consumers in Honk Kong, we will have to create a break-even analysis for the year

2015, considering all the marketing budget, and operating costs compared with

selling of the watches.

We will consider and average selling price for the watches as the range is long. We

are assuming that the average selling price of will be HKD 500 and average estimated

cost to make one watch is HKD 300 with a fixed cost of HKD 200 and variable cost

HKD 100.

Formula of the break-even analysis:

Profit = Revenue – Cost

At break-even,

Revenue = Cost

Profit = 0

Page | 42

Thus our formula is

P = 500q – (100q + 200 + 38250000)

Where q is the quantity sold.

The profit estimated at HKD 167,916,000, a 20% increase from 2013 which was HKD

139,930,000.

Thus,

167916000 = 500q – (100q + 200 + 38250000)

or, q = 324164.5

or, q= 324165 watches sold in 2014 - 2015.

To reach break-even, the quantity should be,

0 = 400q – 38250200

or, q = 95625.5

or, q = 95626 watches will have to be sold in 2014 – 2015 to reach break-even.

Revenue and

Cost

Quantity

Revenue = 500q

Break-even

point

Cost = 100q + 38250200

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Recommendations

Rossini are doing well in general in their part, but for most parts of the world, the

brand is still unknown. Here are a few recommendations for Rossini:

Make the website more suited for the current market state. Their site is clunky

and outdated, needs to improve as soon as possible.

Make the brand more global. They can start by marketing in the Indian

subcontinent.

Make more social media presence as their Facebook profile is idle and does

not update often. They need to make more Facebook advertisements to gain

more expose.

Add more information about the company. Very little information are given

which are most of the time vague and seems incomplete.

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Conclusion

Rossini needs to focus more on building a stronger market share in Hong Kong as

the rivals China can enter the market any time with more advanced products and in

cases cheaper models. This may hamper the image of Rossini as their watches might

not be seen as premium anymore. Moreover Rossini should focus on expanding to

international markets. In this way their brand will get more credibility. They should

make proper use of proper brand elements and value added chain so that they can

put up a better offering to its customers. In order to create an image in the

customers’ minds a company should be able to understand wants from the product

and what position the company producing the product is in now. This report will help

to pinpoint the issues to focus on while building up a marketing action for Rossini.

We have set the plan and explained the areas on which they should work upon. The

points explained are in line with the marketing concepts. We have included a well-

designed budgeting plan for Rossini to implement the solutions that we devised for

them and we hope they we will expect the return on the plan as we expect.

Page | 45

References

Kotler, P, Keller, KL, Koshy, A, Jha 2013, Marketing management: a south

Asian perspective, Pearson, India.

Prichett, GD & Saber, JC 1994, Mathematics with applications in management and

economics, Irvin, USA.

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