Timing for success
Omega is the world's largest watch manufacturer and has developed a portfolio of marketing alliances with aspirational brands such as James Bond, the Olympics and even NASA's Lunar Landings. E&T talks to Omega's president, Stephen Urquhart.
Stephen Urquhart studied Industrial Management at the University of Neuchâtel and has been a member of Omega's management board since 2000. He is currently President of Omega, part of the Swatch Group, the world's largest manufacturer of finished watch products. Urquhart's career began at Omega in 1968, and he returned for a second stint in 1997.
Omea has a long tradition of being the Olympic standard timekeeper, since the 1932 Games. It will be operating in the same capacity at the 2010 winter games in Vancouver (see E&T #6 'Olympic Time') and will be on hand with several new technical developments for London 2012.
Today, the Swatch Group continues to invest heavily in research and development, driving the steady expansion of its leading position in materials and process technologies and in product design and manufacturing. In particular, the Swatch Group engages in significant development activities in microelectronics and micro-mechanics. Sports timing and measurement technologies, although not a core business, play a key role in Omega's brand and corporate visibility.
Engineering & Technology: Describe the relationship that Omega has with the Olympic games.
Stephen Urquhart: We started off in 1932 as the first ever watch brand to be commissioned by the IOC. We sent three watchmakers to Los Angeles with a little briefcase of stopwatches and they timed a few of the events. And then we went to Berlin and London. We missed a few for different reasons - so there's a very historical basis. I think we would be crazy not to pursue this association with the Olympic world because it is a unique world, a unique entity.
Sport is very much part of our brand's equity. We've been involved in diving, sailing and golf over the years, but to have the Olympic games as your main hook is a chance to go in for the long run - we've done 23 games and Vancouver will be our 24th. It's part of the brand's DNA. We don't sit down and ask ourselves "do we as part of our strategy sponsor or become a partner for the Olympic Games". It's part of our future and it goes without saying. So we'll be at the London Olympics, then Sochi [Winter Olympics 2014] - that's definite - and also the 2016 games. We don't know where they will be yet, but Omega will be there.
E&T: What are the tangible commercial benefits of this relationship?
SU: For Omega to be where it is today, somewhere along the line the Olympics must have played an important role. There's an old saying in marketing, which is "half of what you spend is a waste of money, but you don't know which half". The thing about the link to the Games is that it has helped us to build up the brand in terms of seriousness, reliability and quality.
Obviously to be a part of the games in Beijing for us as a brand was an incredible opportunity to make the brand known in China. For the Chinese, it was such an important event for them. We saw the result there: we saw the build-up, during and after. If the brand is strong today in China then the Olympics has doubled our strength there.
E&T: Can you put a graph on the wall and say these are the results?
SU: It's brand image and that is hard to measure. At every Olympics we launch a limited edition watch to coincide with the games and there will be a new one later this year for Vancouver. Okay, so we know that we can sell these watches because of the Olympic connection. But we're not investing all this money and effort just to sell a few more watches. A watch is part of our whole message, but it is not really our main message. That is to convey that Omega is heavily involved in the most universal sporting event in the world.
E&T: Who is the message for? Is there a profile of the Omega client? How do you reach them and what is the method of delivery?
SU: Let's face it, the purchase of a watch these days is not a rational decision. Today, who needs to buy a watch to tell the time? And if you do, who needs to spend thousands of pounds on one? But below the surface, to own a brand that has the notions of longevity and quality makes a difference, I think, to people's decisions when they come to buy one.
Obviously, people will buy a watch for many different reasons - it could be spontaneous, it could be for prestige reasons, or maybe even to show off - but they need to have a brand that has reliability. When our consumers spend £5,000 on a watch this image does play a role. If you ask the consumer, they'll tell you that it doesn't, but it does, and our surveys say it does. When the market gets difficult, such as in the economic environment we find ourselves in now, issues like reliability and quality play an even bigger role.
E&T: What part do the brand ambassadors play in establishing this reassurance?
SU: They play a role. I think maybe it's above the line, with the precision, accuracy and reliability below the line. When you see James Bond wearing Omega, that's when you can put a graph on the wall. We can show that during the period of promotion for the 'Quantum of Solace' movie the sales of the James Bond watch went like that [points to the ceiling].
Cindy Crawford has been with the brand now for more than a decade associated with one particular product that is heavily promoted in Asia, and that line is now 60-70 per cent of our business out there. I won't say it's entirely due to Cindy Crawford, but the ambassadors are there to help. They are people that the consumers can relate to, and they can relate to them much more than to time-keeping. In Beijing we had Michael Phelps along as an ambassador, and that helps. I am sure of it.
E&T: Famously, Buzz Aldrin was wearing an Omega watch when he walked on the Moon in 1969. The Speedmaster Professional is the first and only watch to make it to the lunar surface. What sort of effect does branding like that have on your business?
SU: Although there hasn't been a mission to the moon for 20 years or so, to this day the Apollo 11 mission still has incredible appeal. We know that there are a lot of people out there who still follow this, so every year we celebrate the Moon landing, and to celebrate the 40th anniversary this year we've made a very special version of the Moon watch. It's sort of semi-limited - we've made a lot of them because there is a big following for the Speedmaster and a lot of people will want to own it. At the Basel Watch Fair in March there was a big event where we actually had Mr Aldrin with us. I am amazed to see how this story still has mass appeal to people of all ages.
E&T: The lunar landings were technology at its most flamboyant?
SU: I agree. And it's technology that doesn't really exist any more. If you go to NASA's Johnson Space Centre in Texas and have a look at the stuff they've got there you can't believe that they got to the Moon and back using just this technology - it's so rudimentary. I'll always remember meeting the astronaut General Stafford, who didn't actually walk on the moon, but was commander of Apollo 10, and did the Apollo-Soyuz Test Project where he made the historic meeting with a Soviet Cosmonaut. He picked me up at the airport in Dallas in a small Japanese car and said: "Stephen, do you know that there's more computing power in this car than there was in the whole of the whole of the Apollo space programme?"