Academic journal article Journal of Case Studies

Tiger Woods Now Wears Rolex

Academic journal article Journal of Case Studies

Tiger Woods Now Wears Rolex

Article excerpt

Introduction

Why would Rolex want to sign an endorsement contract with Tiger Woods, a celebrity in crisis with a profoundly negative image? Was his public image destroyed forever? Would he come back on the golf course and in the boardroom? Was this a strategic marketing move for Rolex?

On October 5, 2011, luxury watchmaker Rolex Corporation executives signed an endorsement deal with Tiger Woods. This deal, the first major sponsorship contract since the Tiger Woods' car accident and scandal in November 2009 that led to his admission of marital infidelity and divorce, represented a new beginning for him.

While Tiger Woods had maintained commercial contracts with Electronic Arts, Nike, Upper Deck, NetJets Inc., he lost endorsement deals with AT&T, Accenture and Gatorade. The public's perception of Tiger Woods had changed dramatically. According to Marketing Evaluations, Tiger Woods' likability appeal (Q score) had been surpassed by feelings of negativity (Baar, 2010). Millward Brown, a research agency specializing in brand equity research, tracked public perception of celebrities, and found that before his scandal, only two percent of people surveyed had a negative impression of Tiger Woods. In December 2009, 80 percent of those surveyed had a negative impression of him (Helm, 2009).

The new endorsement deal with Rolex once again included Tiger Woods in the luxury-watch category. Previously, Tiger Woods had endorsed TAG Heuer, the Swiss watchmaker, but the company ended its endorsement agreement with Woods when the contract expired in July of 2011.

The Watch Category

Rolex watches were classified as luxury goods. Luxury products contained more than the necessary and ordinary characteristics as compared to other products within a category. Luxury goods always held a high price, quality, and aesthetic. However, luxury brands were uncommon and contained an "extraordinary" element and symbolic meaning that mainstream products, and even premium products, did not have (Heine, 2011).

According to a report by Global Industry Analysts Inc., the global watch market was forecast to reach $31.5 billion by the year 2015. The watch category, as analyzed by Bernstein & Associates in the Table 1, consisted of established and outsider/entrants brands. Outsider/entrants brands were time pieces that were worn as accessories to complement the entire look rather than possessions worn for prestige alone. Rolex was considered an established mega brand, an instantly recognized and powerful middle-ground brand.

Rolex

Rolex was a Swiss-made wristwatch maker known for its quality, exclusivity, and high cost. Over the years, Rolex had become a status symbol of the rich and famous and the upwardly-mobile career-minded individual (James, n.d.). Although a symbol of success, Rolex had earned its strong reputation through design innovations and craftsmanship ("The History of Rolex", 2009). In 2011, the Digital Luxury Group listed Rolex as thirteenth of the most-searched luxury brands, as Table 2 shows.

History

The Rolex company was founded in 1905 by Hans Wilsdorf and Alfred Davis. Wilsdorf registered the trademark name "Rolex" in La Chaux-de-Fonds, Switzerland in 1908. One rumor was that the word "Rolex" came from the French phrase "horlogerie exquise" meaning "exquisite watch industry" ("The History of Rolex", 2009). This rumor was never proven, but the Rolex word was easy to pronounce in any language. The company name was officially registered on November 15, 1915 ("The History of Rolex", 2009).

Rolex Marketing

Target Audience

Rolex targeted the affluent markets in the U.S. They aimed to reach the affluent male customer with incomes of over $200,000 a year who graduated college. Rolex owners were considered wealthy and were actively engaged in golfing, yachting and sailing, equestrian, and automobile sports.

The Brand/Product Line

Several features made Rolex watches unique from other watches in the market. …

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