Group D
Danny Paul- Market/Prices

Anais Rosa –Demand/Competition

Shaili Shah- Structure/History







The project is about the market of watches. We are dealing with an international market. It is a market that is influenced by consumer taste and demand. Each year companies produce watches with different technologies and with different gadgets. It is considered a private good. Since there is fierce competition the market is a monopolistic competition market.
Market
The watch market is an international market because the major producers of watches are from outside U.S.A. The major companies in the market are Omega, Radon, Casio (Japan), Seiko (Japan), Timex (India) etc. The market is a monopolistic competition market because there are no barriers to entry and exit in this market and also the market is continuously affected by the competition between brand names. Because of the competition the price are low. Brand names try to make a profit by introducing high tech and good quality watches. A lot of brand names put a lot of money into marketing and research to make quality product and to attract more buyers. It has its own share of small companies that make low price watches. They are Tommy Hilfiger, Philippe, Swatch, HMT etc.
Factors Affecting The Market
The watch market and watch industry has been facing extreme changes since the beginning of the industry. At the beginning of the 20th century the industry was a monopoly with companies including Rolex, Radon etc. According to records Rolex carried a patent for water resistant watches. They made watches with Roman numerals. By 1960’s the big electronic revolution came with watches with liquid crystal screens. By this time a lot more companies got into the market. In the 1980’s the computer revolution came helping the watch industry. Watch companies began to add computerized gadgets to watches. In recent years market is filled with trend of watches being made by a lot of cloth companies (DKNY, Tommy Hilfiger), and perfume companies. The new technologies made the watch industry cheaper making the entry of new companies. Also the introduction of cell phones in the 1990’s decreased the demand for watches. Since the cell phones were low priced people bought that and most of them came with a digital time clock. Thus the increase in demand for a substitute (cell phones) decreased the demand for the product (watches). Thus the market changed from a monopoly market to monopolistic competition market.
The watch market is a competitive market because companies compete on quality and price. The invention of computer has helped and also damaged the market. Now pretty much all the watches come with computerized electronic gadgets. 1990’s marked way to watches with mini calculators, with mini cameras, with sound recorders. Thus technology has helped greatly in keeping the watch market competitive. Now every few months’ companies make watches with new and improved gadgets and with new designs. Shown below is the list of features added on different watches in the recent past. This information was retrieved from the “Rutgers library web site’s LexisNexis™ link”.
· Breitling Watch Comp. – Breitling has introduced their new product called the “Breitling Blackbird”. The watch is named after the super trisonic reconnaissance aircraft Blackbird (SR-71).
· Diesel Sports Watch- This watch is featured with the world map on the square face of the watch. Also it has a stainless steel strap.
· Breitling Watch Comp- “The new Breitling Chromo Avenger M1 is billed as the world’s most extreme chronograph. The Avenger M1 is water resistant and operational at depth of 1,000 meters. The titanium case is fitted with a screw-lock and decompression valve.” (LexisNexis™)
Thus the market is filled with competitors who are coming with different designs and technologies to make profit.
Prices
Prices are pretty much the same in the market. Technological advances have a great impact on prices. Since the price of electronic equipments is low, electronic watchmakers like Casio and Timex has mostly low price watches. Their regular electronic watches go between $100 and $50. But traditional watchmakers like Omega and HMT stick to non- electronic watches, which costs more than electronic watches. Omega, which is a luxury watchmaker make diamond watches that cost thousands of dollars. But a major portion of the market include new brands like Casio, Timex, Swatch etc. So considering the major portion of the market the prices are pretty much the sam
The majority of the market has been in equilibrium for a long time without including the major brand names. At the beginning of watch industry only a few companies were in the market. So the market was almost a monopoly and they were making a lot of profit. This resulted in the entry of new companies. This resulted in the demand of already established brands. Then as more companies came into place a huge competition started between the non-established brands. They came with new marketing tactics to stay in the market. They reduced the prices to get more demand and in the end the market came to equilibrium. In the long run market has zero economic profit. That means the demand curve is going tangent to average total cost.
Since there is a lot of competition companies spent a lot of money on advertising and research. Companies try to lure buyers to buy their watches by making attractive commercials. By making good commercials they try to put a good impression on buyers mind. Pricing is pretty much same for the watches. Brands like Casio, Timex, Omega, Swatch has watches with identical prices. The same prices are because there is a high rate of competition. Regular watches made by the companies mentioned above are under $100. But expensive companies have a different price rate. Companies like Breitling make watches that re worth thousands of dollars. But most of the market is filled with competing low price companies.
In conclusion the market for watches is within the demand and tastes of consumer because of the increasing competition from smaller brands within the market has forced to keep prices on watches low on leading watch companies. Also competition from other markets like cell phones and pagers have forced the watch industry to go more with consumer taste and demand. Thus watch market is a market with monopolistic competition with a lot companies with brand names. In the long run the market is in zero economic profit equilibrium.





Demand and Competition
The demand for watches increase drastically each year, with the different brands and styles that change all year around, watches are popular all over the world, there are 300 million produced worldwide. Marketers say the watch industry is a $7.6 billion dollar business, but the competition is fears. The battles strategies between Timex, Seiko, Citizen, Fossil, Swatch and others, look for the best fashionable, stylish and best possible taste to seek the eyes of the consumers. Most of the well-know brands are imported from international countries such as Japan and India. Only in 2003 alone there were $3.7 billion watchers and clocks imported into the U.S Switzerland is the third largest exporters with their only market Swiss watches has taken the leading position among the country’s most successful industries, breaking its own records in exporting each year and going from 4.3 billion in 1986 to more than 10.6 billion in 2002. With their worldwide reputation for quality and styling, Swiss watches are not however the only ones to compete for the eyes of the consumers. They have many competitors in the market, the most serious of these being the Japanese and Hong Kong producers. Though out 2001, Japan and Hong Kong reported a reduction due to a fail in demand for their watch products in the United States.
With the different types of watches, for example, luxury, sports, kids, etc., the demand for watches are such like a necessity for continue on living an everyday life. Watches are just as important as cars, cell/house phones and/or sneaker. The history of watches go back to mid 16th century, and the drastic changes over the decades has overwhelms society. It surprises us all with the different modern technology that comes out each year. The more competition there is the better the outcome there will be.
In the watch industry, product differentiation is very common in terms of competition. For example, Casio could sell the same watch as Rolex, but the prices difference cannot even compare because it is too high. The competition on watches is very high, because the demand is very high. The demand for watches has expanded throughout the different modern technology that has changes over the decades. As a world of business, everyone is in a rush to get to places, this is why a demand for watches is very big in the corporate business world, it can help you get to meeting and events on time.
This history on watches has started a long time ago. Mankind had been concerned about time for centuries. At the same time, watches have improved in development tremendously over time. It started with our ancestors figuring out the time as the day progressed and looking at the direction of there shadow to the modern technology we have today.

Structure and History
The first watch was created in the 1500’s. Peter Henlein, from Nurnberg, Germany creates the first “pocket watch”. It was made of brass and only had one hand that would give an approximate time. As time went on, Leonardo Di Vinci drew sketches for an improved “fuse watch”. Jean Calvin soon grasped the idea and started his own production of watches in Geneva. Meanwhile, during that time there was a law which banned people from wearing intricate clothing and jewelry which made it difficult for the production. However, watches were considered useful and not just a factor of fashion which the law could not stop people from wearing. This boosted the production of the watch industries.
In 1665, after many improvements in the watches, a Dutch scientist named Christian Huygens made something new, the first pendulum clock. This watch was much more accurate then the previous ones that were built. His clock had errors of less then one minute a day. However, it was the first time that the accuracy of the time had been so close to reality. He eventually built a clock that had reduced the errors to 10 seconds a day. At this time, this was the closest they could get to the real time.
The watch industry was not satisfied with Christian Huygens improvements. In 1714 the British Parliament had offered the community a reward for anyone who could get the clock precise enough for them to use for navigation when they are at sea. This was due to the fact that many lives of the sailors were lost because they were not able to approach their accurate positions because they needed accurate time to find the longitude. Finally in 1761, John Harrison accomplished his goal of creating a watch precise enough to use for navigation at sea.
In the 1800s, many countries felt the need to differentiate the time in the different zones so that the world could work together more efficiently. Then the world agreed upon creating four standard time zones which eventually led to creating worldwide time zones.
Today, the modern watch is any size the person prefers it to be. The perfection of the watch was created after a long struggle of grasping accuracy. Everyone generally may own one or more watch not only to tell time, but as a fashion statement. Watches today come in different styles, colors, and shapes. It is now not only for practical use, but also as jewelry. It took a lot of labor work by mankind to get the exact accuracy of time that we have today.
In conclusion the market for watches is within the demand and tastes of consumer because the increasing competition from smaller brands within the market has forced to keep prices on watches low on leading watch companies. Also competition from other markets like cell phones and pagers have forced the watch industry to go more with consumer taste and demand.
History of Watches
1500s : Germany : Peter Henlein creates the first pocket watch.
1485 : Leonardo da Vinci sketches a fusee for a clock.
Early 1600s : Form watches becoming popular. Cases are shaped like animals and objects. Religious themes are popular.
1635 : Around this time that the fusee was adapted from clocks to watches.
1659 - 1675 : Christian Huygens invents the "Remontoire".
1687 : Daniel Quare patents the repeating mechanism that uses bells to sound quarter hours and the hours.
1704 : Peter and Jacob Debaufre, Nicolas Facio, are the first to use rubies in watch movements.
1750 : Watch makers began using enamel on watch dials.
1759 : Thomas Mudge invents the English lever escapement.
1775 : Abraham Louis Breguet sets up his own watch making shop in Paris, France.
1780 : Abraham Louis Perrelet invents the self winding movement.
1786 : Breguet is the first to use guilloche on watch dials.
1791 : J.F. Bautte founded the watch company that would eventually become Girard-Perregaux.
1807 : Thomas Young invents the recording chronograph.
1809 : Luther Goddard of Shrewsbury, Massachusetts is the first watch manufacturer in America.
1820 : Thomas Prest registers a patent for the self winding watch.
1833 : Antoine LeCoultre starts his own watchmaking business which later become Jaeger-LeCoultre.
1837 : First Tiffany store opens.
1843: Adrien Philippe develops a watch with winding and setting through the crown.
1844 : The start, stop, and reset chronograph is invented by Adolph Nicole.
1844 : Antoine LeCoultre invents the millionometre.
1848 : Louis Brandt opens his own workshop in La Chaux-de-Fonds which eventually became the Omega Watch Company.
1853 : Tissot makes the first dual time zone watch.
1858 : Minerva is founded.
1860 : Heuer is founded.
1865 : Zenith founded.
1881 : Movado founded.
1884 : Greenwich, England is officially named the zero meridian and used as the world wide recognized basis of time zones.
1886 : Geneva Seal established.
1894 : Universal Geneve established.
1905 : Hans Wilsdorf starts the Rolex Watch Company.
1914 : Eterna introduces the first wristwatch with an alarm.
1918 : Japan : Shakosha Watch Company opened. This would become Citizen in 1931.
1923 : John Harwood is the first to mass produce a self winding wristwatch.
1924 : Tokyo : Seiko brand name is launched by Kinttaro Hattori.
1926 : Rolex introduces the first waterproof case called the "Oyster".
1929 : First anti magnetic watch created by Tissot.
1933 : Ingersoll introduces the "Mickey Mouse" watch.
1956 : Rolex introduces their first model that displays the day and date.
1957 : Hamilton introduces the world's first battery driven watch.
1962 : Rado produces the world's first scratch proof watch called the "Diastar 1".
1962 : ETA of Switzerland develops the first quartz battery operated watch.
1970 : Hamilton releases the "Pulsar", the first electronic digital watch.
1972 : Longines and Seiko introduce the LCD, (Liquid Crystal Display).
1980 : Hublot founded.
1983 : SMH of Switzerland launches the Swatch brand.
1985 : Swiss Heuer Company merges with TAG to form TAG Heuer.
1986 : Audemars Piguet introduces the first self winding tourbillon.
1991 : Franck Muller founded.
1999 : Casio innovates with the first wristwatch with a built-in Global Positioning System (GPS).

Site:
http://www.jcpenney.net/guide/jewelry/watches/watches.htm