DOUBLE ASSEMBLY

IS IT EASY — TO BE A HOSTAGE TO A WELL-DEVELOPED BUT SINGLE BRAND?

Vyacheslav Zharekhin, deputy general director for commercial issues of the Chistopol Watch factory visited many countries of the world. He recalls: «Whenever you arrive in a country and you start mentioning Chistopol as the place you are from, mention the Vostok Watch factory, people start nodding politely but at the same time they are evidently doing their best to recall where this place is. But you only have to mention the «Komandirskiye» (Commanders) watch and everything suddenly becomes clear and well understood»

DOUBLE ASSEMBLY


IS IT EASY — TO BE A HOSTAGE TO A WELL-DEVELOPED BUT SINGLE BRAND?

Well, who now has it easy in the manufacturing business?

In this case, the watchmakers from Chistopol were lucky. Nobody remembered that the Komandirskiye watch were not a marketing move of a genius for promotion of watches to foreign markets; in fact, in the fall of 1941 barges from Moscow with equipment of the Second Watch Factory were unloaded on the embankment of Kama river. Everything for the Army, everything for the victory! And when victory came, the central authorities ordered the plant to continue working for the benefit of the Soviet Army. The factory got a quota for «peaceful» wristwatches that could be sold in common department stores. The authorities also allowed the factory to put the word «Komandirskiye» on the face of the watch.


PRESENT FROM THE CENTRAL COMMAND

The time for Komandirskiye watch came at the end of the 1980s when watches in the military style came into fashion all over the world. This was boosted further by a fad for all things Soviet: Gorby, perestroika... and, finally, watches from Russia with a red five-pointed star! Total sales volume reached 40,000 per year just in the USA. After a certain period, US ordered a special batch of these watches for heroes of the Desert Storm campaign.

Chistopol watchmakers should be counting their blessings and utilizing this market situation to their maximum benefit. They had it all: a direct marketing hit, the central planning system was releasing its grip on economic aspects of the plants work (and soon this system vanished altogether)... But this time — late 1980s, early 1990s — was a tough one and when remembering those times, some people, just like Vladislav Tsivilin, general director of the Chistopol watch factory, shake their head in disbelief as if trying to chase the memories away.


CHAMPIGNONS IN THE BASEMENT

Those indeed were the dramatic times — early 1990s. Top management of the plant saw that they were losing a unique chance of utilizing the market conditions and make a sharp boost in sales and profits. A place in the sun seldom stays vacant long: and the Chinese started using the military wristwatch fashion to their benefit by flooding the market with cheap, low-quality but eye-catching watches that were copied off well-known worldwide brands — including the Chistopol watches.

The outcome was self-evident: insofar as there were no spare parts and accessories available or those spares were offered at unbelievably high prices, lets make our own or lets invest in facilities for production of those spares and accessories. Life itself forced people to take this route. Small businesses started to grow at the plant. People were told: we need this and that spare, we will be helping you with what we can — but if you start production we will be guaranteeing you 100% of your sales. You will not have to be looking for customers: we will be your customer.

Nowadays there are 58 small businesses clustered around the factory. All told, they provide work to half of 4,000 watchmakers of Chistopol. One of those businesses grows champignons in the basement of the factory; another is, in fact, a bakery. The plant switched to self-sustainable operation long ago. Now it does not need third-party suppliers at all. Unbundling and switching to market relations were the forced way, but also the one and only way for the plant to survive. As a result of those events, Chistopol plant is the only watch-making plant in Russia that is self-supporting. All told, there are five such fully autonomous watch-making plants in the world — all in the most well-to-do countries of the West.

The fact that today this plant is the leader of Russian watch-making also speaks for correctness of the chosen route.


«VOSTOK» — WEST — EAST

Management of the plant has long ago determined their major customer. According to Vyacheslav Zharekhin, commercial director, this target customer is «middle-class». This is probably the right choice. But this choice is for the future: Russia insofar has no middle class. So reality forces the plant to produce watches in the price range from 200 to 2,600 rubles. And this is a great price range. In fact, in the world market Chistopol is directly competing with only one serious competitor — Swiss company Swatch that positions itself as producer of the cheapest of expensive watches and offers its goods in the price range between 30 and 100 US dollars. But the Swiss manufacture quartz watches running on batteries. Mechanical wristwatches of similar accuracy of movement and design are traditionally valued at higher prices. However, winning a share of the market from Swatch might be difficult: it is not enough to produce the high-quality goods. A meticulously prepared and high-intensity offensive is required for that.

Recently Vyacheslav Zharekhin, commercial director of the factory, visited Hong Kong and found for himself that many respected Swiss producers actually do move their production facilities to China. Chistopol factory has signed a contract and is now setting up a joint Russian-US-Chinese production facility with an extended product range. In this three-sided venture Chistopol watchmakers will not only be providing the watch mechanisms to be inserted into the watches, but will also provide intermediary services. The Chinese will do what they are best at — exterior design. Americans will participate with their investments and will promote the finished goods in the Western markets.


FROM «KOMANDIRSKY&RAQUO TO «KREMLEVSKY»

But Chistopol watchmakers are far from stopping production of their major product line — gentlemens mechanical wristwatches. However, the market now demands more upscale wristwatches. At the plant many lines of wristwatches undergo the so-called double assembly: first they are assembled and tested for accuracy of movement, after that they are disassembled, adjusted and assembled the second time. This, naturally, makes production much more expensive. But there are no customer claims on such watches. People valuing their time purchase only the double assembly watches. Now the motto of Chistopol plant is «From «Komandirsky» to «Kremlevsky» watches». Series of waterproof watches is expanded as diving today seems to be a national sport. Upper price limit now exceeds 5,000 rubles and, finally, Chistopol watchmakers started production of the «Kremlevsky» watches that have now a fair-sized chance to become a national brand the size of «Komandirskiye».

Last year everybody seemed to be cracking jokes at the present made by the Chistopol watchmakers to President Vladimir Putin. However, if one thinks of it, there was nothing funny in the present: our President indeed wears his wristwatch on his right hand and common wristwatch is designed to be worn on the left hand. The plant manufactured a mirror copy of the regular watch design for the President of Russia. And after that they had a thought: every fifth person in the world is left-handed. Thus the «Kremlevsky» series of wristwatches for left-handed people started. Their owner positions his social status and his attitude to the world. Patriotism, care for his motherland, if you wish. And this is far from being funny: the wristwatch is high-precision. It always shows the correct time. Another thing about it is really funny. The plant employees still do not know whether their present was transferred over to President Putin. The wristwatch was given at the plant to the Chistopol resident who was to receive an order of Golden Star of Hero of Russia. He handed the watch over to someone from Putins immediate entourage.

Sergey PETUKHOV

Photo: Alexander BASALAEV
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