Res 342 Week 5 Memo

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| Aquine | Memo To: Howard Gray From: CC: Jean Dubois, Uma Gardner, Amanda Hamilton Date: [ 8/1/2011 ] Re: The causes of the decline of Aquine’s market share in the mechanical watch segment Recommendations Aquine held a very strong position in the market when it comes to the mechanical watch segment by having 15% of the market share. However, the company has seen a decline of that market share, lately, as it currently stands at 5%. The assumption that the advertising strategy is not delivering results is incorrect as the data shows that 1) there is a positive response to the advertizing campaign and 2) the perception of consumers of chronometers is positive to the point that they are willing to pay more for certified mechanical watches with chronometers. Another factor that is apparent from the data is the fact that the company is pushing more non-certified mechanical watches into the market because these watches are being rejected by the SOCC during the certification process. The percentage of watches being rejected during certification by the SOCC has increased dramatically year over year. In 2003 it has reached 67%. This does not bode well with the positive consumer sentiment towards reliable and certified chronometers that consumers appreciate to the point that they are willing to pay more for them. In order to improve the quality of the mechanical watches and tremendously decrease the percentage of rejected units by the SOCC and push more certified watches into the market, Aquine should make an investment by upgrading timing machine which would enhance the precision of the watches. Additionally the company should buy customized movement holders and upgrade the poising machine. These additions and upgrades will improve the quality of the product and render better results during the certification process. This in turn will increase

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