The Breitling Watch Source Forums

It's Breitling's brand image that suffers - we are not talking about a generic consumable, we are talking a high end luxury item where the perceived value is virtually everything.

If the ADs sell the watches at considerable discounts then the perceived value of the brand become significantly damaged. That's exactly why the likes of Patek Philippe so jealously guard their prices.

Brands should be concerned with dealers that excessively discount their product. Why do you think the most prestigious and successful brands in the world closely guard this practice? Rolex, Patek, Mercedes, etc. This protects their distribution and their dealers and instills an inherent value and confidence in the product the consumer is buying.

BUSA is closely watching who is doing what? They as well as many other brands do care about their distribution in the USA...

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BC

Funny what happens when the guy behind the curtain is exposed. I think my AD HARTSTANS in CT was pulled by Breitling due to heavy discounting I would assume as I no longer see them on Breitling's updated site. Since I got my Avenger Seawolf at about 50% off. It just goes to show you how much things actually cost and how much markup is in everything we buy.

It's just a mind games really. Everyone wants to be part of the cool crowd. If you pay $5000 for a watch you are much cooler than of you paid $2500 for the same watch.

I am glad I got my discount and don't feel that I have any lesser of a watch because of it.

If this is true, than by your logic alone, marking up a price for an item would raise the perceived value and image of a brand? Therefore companies like Kia should just raise the price on their cars and make them worth something!

Brand image and value are influenced by so much more than just the price of something. I'd hope that buying a Breitling you are buying craftsmanship, technology, tradition, detail, rareness, etc. Look at any real high end item, they do not just get a high price tag by brand image and perceived value. They do it by the other traits that I mentioned above. Value and brand image derive from that. As a result of those, price is then adjusted. You aren't just paying out the wazoo just to pay out the wazoo.

Successful brands don't guard their prices, they are able to sell at high prices because their items deserve that pricing. You think if Kia guarded their price and wanted their new car at $100,000, they would be successful and earn that?

One rule of business, never sell items for less than what you pay for it. This would mean AD's too. Either way, if Breitling wants to control prices on their items, than they should control the prices, not the discounts. For instance, if the dealer has to pay $5,000 for a watch, they would not consistently sell that watch for less than $5,000 (maybe to long time customers or to people who other influences), but they just wouldn't do it to the average person. It doesn't make sense for ANY company to sell things at a loss consistently. You want to control the price of discounts? Just sell the item to the AD at the price you want them to sell it for, and then advertise the suggested retail price, that way AD's won't have much control. Take that same $5,000 watch, sell it to the AD for $5,000 and say market the suggested retail price as $5,500 or something close. That way the AD won't give HUGE discounts anymore. Simple. I guarantee dealers will no longer still give consistent 25-30% discounts and lose their shirts on a deal.

This is becoming a silly discussion and I'll be no further part of it.

Understood, I was just trying to generate a conversation. I didn't think it was being silly.

A healthy conversation is always good and never silly. I think you are taking it to seriously Andy.

OK, it is illegal to have a manufacturer control pricing of a product being sold bu a distributor, it was a big problem in the automotive aftermarket industry. MSD started a progrman where if you sold their product below a certain price, they woudl cut you off, but it violated free trade laws, so they had to be very specific, and use the pricing policy as incentives to get further discounts, its a tricky law. fact is manufactures should be able to sell to dealers adn the dealers should be able to sell for whatever they want, if they sell too cheap, they go out of business because they dont maek enough money, if they sell to high, they dont sell enouogh to survive and the market establishes the "real" price.

This is exactly what I was trying to get at. I guess I shouldn't have said "control pricing". I meant, as Breitling, you can control your own pricing. Meaning, just sell to the AD's at a higher price. In my example, Breitling can sell a watch to an AD for say $5,000. At that point Breitling can give a suggested retail value of CLOSE to $5,000. If the AD wants to consistently sell that watches to the public for less than $5,000, so be it, it will be the end of their company as NO company can survive when you make less than you owe.

It's good that you bring this up, because it's an important thing to discuss.

The whole issue from day one of e-commerce addressed this point. Most manufacturers took issue with the deep discounting taking place, watering down the appearance of the brand (whichever brand they were). The cheaper something sells, the cheaper the perception of the product. The reverse works as well, which is how brands like Bose get this reputation of being a good product (interestingly, they restrict discounting from their dealers unless factory authorized).

So it matters, and it matters to anyone wanting to wear the brand. If at some point it's perceived as a "discount" brand (which frankly it may already be), would you want it? Not as much is my guess.

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Avenger Skyland
If I said I was good, you'd think I was bragging.
If I told you I wasn't, you'd know I was lying.

I agree that the general public typically associates price with a reputation of a brand. I guess that's how the saying "you pay for what you get" came from. However, there definitely are companies and brands out there that have huge followings and great brand names despite their lower cost. In your example (I'm assuming you don't like Bose), you said Bose has a good reputation based on the price. However, anyone who somewhat understands audio/video would also find Onkyo products appealing, even though the price is low for what you get. My point here is that companies don't always have to charge an arm and a leg to be considered a good company and have a good brand.

To answer your other question about whether I'd wear a brand based on price...I'm going to say yes. I'm looking at Breitling for many reasons, definitely not for the price. If I was only going to look at price and wanted to pay for something really expensive I'd look into Rolex or Chopard.

Interesting that you brought up Bose. I'll also add Monster products to that. I'm a big audio/video industry guy, and these two companies are discussed quite a bit. They are both VERY, VERY good at advertising to get their name out, to the point that most of the general public, when you ask them what good speakers or cables are, the name that pops in their head is "Bose", or "Monster", without knowing otherwise. Both make some decent products, but both are also quite overpriced. For any given amount of money, I can direct you to much better products from other companies than those two.

People occasionally argue with me, saying that there is nothing better than Bose or Monster, because the brand names are so great. I'll say, "quick, name the first hamburger that pops in your head". They'll say, "McDonald's!" So I'll respond, "oh, so you're telling me that McDonald's hamburgers are the best in the world, because their brand name is so great?"

Think about it.

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Chris
Club Member #0070
2009 TT Chrono Evo w/Rose gold, blue face
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1st rule of markets: there is exactly one thing that determines the price of anything: how much somebody is willing to pay you for it.

The problem is, different people are willing to pay different amounts for essentially the same thing. The goal of any retailer is to figure out how much you are willing to pay for something and get you to pay that amount for it. Sometimes they do this through sales: they separate people who are willing to pay full price for something from people who will only buy it if it is cheaper. Sometimes it is done through product differentiation, usually through branding: Do you buy a Jaguar X-type or a Ford Contour (or Mondeo, depending on where you live)?...they are the same body and built by the same company. Sure the Jag is a nicer car, but you pay a lot more for the extra bump in niceness (meaning that the profit margin for Jags are higher). Maybe you think it's worth the extra money, maybe not. But having the product differentiation of the different brands let's Ford Motor Co. sell you the same car no matter what kind of buyer you are. And even when you decide to buy one or the other, you have to decide on all of the trim levels and options, which are again another way to get more money out of people who are willing to pay more ("I'll take it fully-loaded"), but still make a sale to those who aren't ("I'll just have the base model, thanks").

What people will pay for a well-differentiated product has almost nothing to do with how much it costs to produce. What we all pay for Breitlings have very little to do with how much it costs Breitling to make these things. But Breitling, unlike Ford, is a one-brand company. It doesn't have a value-centered brand to fall back on, so everything it sells has to fit the same brand image. Therefore, it has to make sure that the perception of this brand never falters, otherwise people will decide that a Breitling is worth less.

Where I think Breitling is wrong is in trying to short-circuit the supply and demand process. What they should do to maintain image is to limit supply. If ADs are willing to sell these things at $10 profit apiece, then clearly there is too much supply. If Breitling announced that they were all going on vacation for 5 years and not making any watches, do you think they would have to enforce floors on sales prices?? I don't think so. Perceived scarcity would keep prices high. But Breitling is trying to maintain their image, while at the same time increasing volume. This means they have to do silly things like putting restrictions on ADs.

Mofongo

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There is a very fine line between "hobby" and "mental illness." --Dave Barry

I definitely agree with these statements. In fact, I stated earlier that rareness of a given item or merchandise is one of the main factors that affects price. Granted, there are certain circumstances. I mean, I think a mint 93 Toyota Tercel is pretty rare now, but I wouldn't pay crap for it.

Regardless, I think the main question is how brand image is perceived. Some are debating that higher priced items are seen as higher brand items, while lower priced items are lower brand items. I don't think it's true. I definitely don't feel that Monster, Sony, Bose, etc are better brands, even though you will pay a premium for their products.