{"id":97,"date":"2017-06-06T04:34:49","date_gmt":"2017-06-06T11:34:49","guid":{"rendered":"https:\/\/hengreamaze.wordpress.com\/2017\/06\/06\/the-daytona-rolexs-ultimate-veblen-product\/"},"modified":"2023-08-31T23:57:16","modified_gmt":"2023-09-01T06:57:16","slug":"the-daytona-rolexs-ultimate-veblen-product","status":"publish","type":"post","link":"https:\/\/www.reamaze.com\/blog\/the-daytona-rolexs-ultimate-veblen-product\/","title":{"rendered":"The Daytona: Rolex\u2019s Ultimate Veblen Product."},"content":{"rendered":"

What do you know about the following product?<\/strong><\/p>\n

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\nRolex Cosmograph Daytona 2017. Image via Rolex.com.<\/em><\/em><\/p>\n<\/figcaption><\/figure>\n

The only answer you really need to know is that you simply can\u2019t go out and just buy one anytime you want. It costs somewhere between $12,000 to $50,000 and comes with a 2-year waiting list.<\/p>\n

Veblen goods are products that command high prices not only because they\u2019re expensive or exclusive but also because they offer exquisite quality rather than simply being rare, elusive, and hard to find alternatives for. In fact, Veblen goods aren\u2019t hard to identify at all. They exist in plain sight and are notorious for making a big splash about their exclusivity. The differing ideology behind Veblen goods is that they\u2019re marketed as such. Veblen goods target the affluent, the sometimes vain, and most importantly, people who can afford to be more exclusive than you or me.<\/p>\n

One can argue in many ways whether having Veblen goods for your brand is a good or bad thing. The simple fact remains however, not every brand is qualified to support a Veblen product. Without a strong brand presence, marketing engine, and distribution strategy, Veblen status is as unique and rare as unicorns.<\/p>\n

Veblen goods contradict the basic law of demand<\/a>\u200a\u2014\u200awhich states that quantity demanded<\/a> has an inverse relationship with price\u200a\u2014\u200abecause of their snob appeal. If the price of a coveted and expensive product is increased, it may actually enhance its appeal to the status-conscious, since it is now further out of reach for the hoi polloi.\u200a\u2014\u200aInvestopedia<\/a><\/em><\/p>\n

Regardless of how you feel about Veblen goods, there are some key attributes that make achieving Veblen status great for your business. A huge part of this process is creating brand relevance which comes from being present in the right places at the right time and generating engagement by saying the right things to the right people.<\/p>\n

Before we circle back to the topic of Veblen products and how you can be just as successful as Rolex in your own way, let\u2019s take a quick detour into the history of the Daytona and how long it\u2019s taken Rolex to build this brand equity.<\/p>\n

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The Rolex Daytona<\/strong><\/h2>\n

For most of Rolex\u2019s history in the watch industry they\u2019ve never been known for their chronograph watches (a watch with stopwatch capabilities). The first real Rolex chronograph that housed a mechanical movement produced by Rolex itself in an Oyster case (a Rolex specialty) wasn\u2019t released to the market until 1955. They were labeled simply as a \u201cRolex Chronograph\u201d. Between 1955 and 1961 only 500 were made before it was discontinued.<\/p>\n

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The original Daytona Beach racecourse in Florida. Image via Google Images.<\/em><\/figure>\n

Rolex\u2019s venture into the chronograph vertical wasn\u2019t without reason however. In the 1930s, Sir Malcolm Campbell, one of the most decorated racers in the original Daytona racecourse in Florida, personally thanked Rolex for their durable timepieces. It was this moment that gave Rolex inspiration for expanding their product lineup. However, it wasn\u2019t until the mid 1960, after many failed attempts at marketing the series we know of today as the Daytona, did Rolex finally hit its stride.<\/p>\n

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Paul Newman and his Rolex Cosmograph Daytona. Image via Google Images.<\/span><\/em><\/figure>\n

In 1963, one year before the official release of the modern day reference of the Daytona, Rolex secured the coveted \u201cOfficial Timekeeper\u201d for the Daytona International Speedway and was introduced to the world of motor racing for the first time. However, the person that singlehandedly turned things around for Rolex\u2019s chronograph series was actually Paul Newman, the famed Hollywood actor, IndyCar racing driver, entrepreneur, and philanthropist. Newman\u2019s love and devotion for the Cosmograph Daytona was immediately apparent, wearing the specific watch (Reference 6239<\/a>), in many public appearances and sealing its position as the pinnacle of \u201crace car driver equipment\u201d.<\/p>\n

2012 marked Rolex\u2019s 50-year anniversary as the official timekeeper for the Daytona International Speedway. Since 1962 however, Rolex has had its fair share of success stories as a brand in the world of motor racing. This long running history in high stakes racing and exclusive celebrity-driven marketing is what continues to present Rolex chronographs as a Veblen halo product for many watch lovers and collectors.<\/p>\n

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Daytona International Speedway. Image via Google Images.<\/span><\/em><\/figure>\n

Rolex Daytonas, both new and especially old, attract buyers of a different class. It\u2019s not uncommon for new purchasers to wait for more than 2 years to get their hands on one that retails anywhere between $12,000 to $50,000\u00a0. Older \u201cPaul Newman\u201d Daytonas often auction at over $100,000. Pre Daytona chronographs are even more rare and auction for even higher. In fact, according to aBlogtowatch.com, Daytonas in general have been rising in cost dramatically over the years even while adjusted for inflation.<\/p>\n

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Rolex Daytona prices. Source: aBlogtowatch.com.<\/span><\/em><\/figure>\n
\"\"Rolex Daytona purchasing power. Source: aBlogtowatch.com.<\/span><\/em><\/figure>\n

The Rolex Daytona is a clear representation of a Veblen product. Over the years, the Daytona has not increased in overall relative prices, the average consumer\u2019s purchasing power of a Rolex Daytona has decreased, putting it further and further out of reach. And yet, the Daytona is more desirable than ever before. How does Rolex do this? And is Rolex the only brand capable of doing this?<\/p>\n

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Creating your \u201cRolex Daytona\u201d<\/strong><\/h2>\n

The market for luxury timepieces is unquestionably complex. We can\u2019t all be Rolex nor all have Rolex\u2019s capabilities as a brand. Even so, the process of experimenting with a Veblen product as a means to increase brand exposure and traction is interesting enough to explore. If anything, the thought process that goes into marketing a Veblen product is in itself educational and can help you discover new customer niches and edge cases where supply and demand metrics move outside their normal boundaries.<\/p>\n

Creating emotional content<\/strong><\/h3>\n

Most of the Rolex Daytona\u2019s appeal is connected to the spirit of motor sports, racing, and the essence of perseverance. And while many Rolex fans admire its technical intricacies, the story and emotional buildup behind every Rolex watch is immediately obvious.<\/p>\n

https:\/\/youtu.be\/bJNmyYqseRI<\/a><\/p>\n

The same can be said for many luxury brands carrying cohorts of Veblen products: Louis Vuitton, Bentley, Breitling and many more. Many marketers leverage sensory-heightening methods to create an emotional response from their audience. When brands are able to effectively leverage emotional content, attention is drawn away from factual or technical aspects of a product. For the Daytona, no marketing content speaks to its mechanical ingenuity, material build qualities, or even price.<\/p>\n

Emotional engagement with the target audience bypasses the need to speak about the product itself and directly increases memorability and engagement with the brand itself. Another great example of great emotional content comes from Coca Cola. Even though it\u2019s not a Veblen product, Coca Cola creates an emotional connection to customers using design ethos such as nostalgia, families, and friends in its marketing. Through communicative advertising, strong brand colors, and unrivaled distribution channels, Coca Cola is<\/em> a \u201cstatus\u201d symbol around the world. Yes it\u2019s a soft drink but it represents a lifestyle that\u2019s closely correlated with freedom, love, and family.<\/p>\n

The takeaway is this:<\/p>\n