Dissonance Buying, a Practical Example of How to Differentiate Between Two Seemingly Similar Brands
In Understanding Luxury Brand Equity through Consumer Purchase Decision, I discussed how a consumer buying behaviour matrix allowed to separate watch brands in 4 groups. One of them, the dissonance buying behaviour group, is characterised by the fact that competing brands all have a good value proposition. How is the consumer thus supposed to make a choice between two or three options?
Here is a practical examples between a prominent brand and a rising star: Longines and Tudor.
Longines targets budget conscious buyers, while Tudor targets connoisseurs, and Tudor has a clear mission and an open path for providing a higher finishing quality than Longines. These two factors add up to increase Tudor prices beyond those of Longines.
LONGINES’ CORE BUSINESS
Longines targets the budget conscious amateur of fine watches. Their cash cows are nondescript Swiss watches such as the one above. It is only a side effect that they catch the attention of watch purists with their heritage or watchmaking lines.
At its best, Longines sold more than 1.5 million watches in a year year, which was a few hundred thousand more than Rolex ever sold in the same time. Of these, less than 50,000 Longines per year are renditions of heritage models, such as the Skin Diver shown here. But this is not what bring money in Longines coffins.
TUDOR’S CORE BUSINESS
Since its launch by Hand Wilsdorf, Tudor has been the option for budget conscious customers who were not ready to fork out Rolex prices. For a long time, Tudor was mostly casing third party movements into Rolex cases.
About 15 years ago, Tudor completely shifted course and started to do the opposite of Longines: they targeted the watch purist and as a side effect caught the attention of budget conscious watch amateurs.
As a result, a purist will be willing to spend USD 3,500 on a Tudor because of its higher “watchmaking” appeal than a USD 1,750 Longines
MORE DRAMA THAN THE TWILIGHT SAGA
The other factor behind the difference between Longines and Tudor prices is the setup and rivalry between three luxury groups: Swatch Group, Hans Wilsdorf Foundation and LVMH.
Longines and Omega used to be competitors, but they fell under the same ownership when the Swatch Group was created. Imagine Daimler Benz and BMW falling under the same owner. Should they continue to compete on the same turf?
During the 20th century, Rolex came out of nowhere and dethroned Omega from its leading position. Omega has a score to settle with Rolex, so for the Swatch Group it made more sense to position Omega above Longines to give it more chance to claim back its dominant position.
So while Rolex kept raising its prices to 2 months wages in a Western country, Omega attempted to do the same, leaving out the price points that LVMH’s TAG Heuer was happy to fill.
As a countermeasure, the Swatch Group tasked Longines with competing with TAG Heuer. That’s how the Longines Hydroconquest was born: itwas a model aimed at directly competing with the TAG Heuer Aquaracer.
In the meantime, the Hans Wilsdorf foundation woke up and decided to tackle Omega from under. So they now have Omega in a clamping vice, with Rolex eroding its customers at the top and Tudor eroding its customers at the bottom.
Longines is not really a threat to Tudor because the Swatch Group forbade them to go in Omega prices. However nothing prevents Tudor from rising to Omega prices, which is what can be seen happening with their models that are sold at price point that are 2 to 3 times those of Longines.
I once tried to make the case that the Swatch Group would benefit from pitching Blancpain against Rolex. They would thus be the ones squeezing Rolex between Omega and Blancpain and squeezing Tudor between Longines and Omega. At the moment, the table is turned on them.