This family-owned watch company (established in 1839) has survived the digital-watch revolution that swept the globe. Patek Philippe is a manufacturer of very high-end, superior-quality timepieces and has a following of dedicated collectors. The essence of the Patek Philippe brand is reflected in its enduring slogan ‘you never actually own a Patek Philippe, you merely look after it for the next generation’. Since its inception, Patek Philippe (‘Patek’) pursued a vision of carving a niche through the offering of these very high-end watches.
Royalty, dignitaries, top CEOs of the world’s largest and most successful companies became customers and followers.
This was achieved through innovation and ingenuity, but also the relentless pursuit of a branding strategy that put it at the top of this very competitive market. Its clients, not only connoisseurs of fine timepieces, are also very successful in their respective fields, and their reputable standing within society, their business acumen, and their wealth would be reflected in their ownership of a Patek Philippe.
However, it has not been all plain sailing for the brand, as Patek was poised to become a victim of its own success. One of its brands, the Nautilus Ref. 5711 watch, had become too sought after. The Nautilus Ref. 5711 developed an almost mass-market appeal over time that is contrary to the brand’s usual niche-market appeal.

Patek predominantly manufactures its watches using precious metals (for example rose gold) and this continues to be the case. Some of Patek’s higher-end watches within the brand portfolio command high prices, such as the Ref. 5303, which retails for around $797,000, while the Ref. 5370P-011 Split-Seconds Chronograph retails for around $281,690 and the recently launched Ref. 5270J-001 Perpetual Calendar Chronograph has a price tag around $183,000, depending on the daily exchange rate. One of the more complicated watch mechanisms can be found in the Grand Complications range, with the 5208R-001 selling for approximately $928,000. Based on the proprietary mechanical systems within its range, Patek holds more than 100 registered patents. The Nautilus range, made of stainless steel, was first introduced in 1976 as ‘one of the world’s costliest steel-made watches.’
The company produces only a limited number within its current brand portfolio per annum – around 58,000 units by most accounts, as the production total is not made public.
Competition Many brands would like to be regarded as competition for Patek timepieces, purely as a benchmarking exercise.
Many of the experts, when pressed, would admit to the brand having three main competitors: Vacheron Constantin, Audemars Piguet (‘AP’) and possibly Rolex. According to PrestigeTime, the ‘big three’ watchmakers, in no particular order, are Patek, Vacheron Constantin and AP. Rolex is conspicuous by its absence from this list; this is probably a result of Rolex’s main differentiation being that it is essentially regarded as more of a sporting watch brand. The essence of the Rolex brand is that of a watch that will accompany you on any extreme adventure, whether to the highest point on Earth or the deepest depths man can go to. However, it does have the distinction of being the most recognized brand in the world.
There is one other major difference between Patek Philippe and some of its closest rivals, which produce watches mainly as fashion accessories. Patek Philippe produces timeless watches, essentially building on the ‘perfection and artistry’ of its timepieces, through its watchmakers. As a result, many of its timepieces have become cult objects, having built a dedicated and loyal market following, fetching ever-increasing prices when at auction.

Questions

1. Consider at which stage of the product life cycle the Nautilus Ref. 5711 finds itself and evaluate the associated impact on the marketing mix. Illustrate your answer with suitable examples from the case study.
2. Analyse the value and the associated benefits that the Nautilus Ref. 5711 contributed to the Patek Philippe brand portfolio. Support your answer with relevant examples from the case study.
3. Comment on whether or not the decision to discontinue the Ref. 5711 was a wise one.