Originally Posted by
markrlondon
Can they charge £5000 for an item that costs £1500 (all direct and indirect costs included)? If so then they do so. Can they charge £50,000 for the same item? Then they do so.
This seems a pretty reasonable account of the pricing strategy of many wtch manufacturers.
It also presents the clearest difference with the cars, as used in my analogy earlier. When a Merc S Class is priced at £50K plus, whatever Merc's margin might be, it is fairly easy for the layman to appreciate where the extra money goes in relation to, say, a Ford Mondeo (as much as I appreciate Mondies!).
Now looking at watches, it is pretty hard to equate the price difference of an Omega SMP / PO with a Sub date, on materials alone. It is also hard to equate the prices charged by some Swiss manufacturers when one considers what manufacturers like Seiko can produce for a fraction of the money.
As you say, it largely comes down to public perception of the brand (amongst the general public for popular high end manufacturers like Rolex, and amongst watch enthusiasts for brands like Glashutte) and what said brand can get away with charging.