patrickau
172
Value inside or outside the watch?
I must admit, this question always bother me from time to time.
Being a very young collector and living in this part of the world make every single dollar counts for me. I critically asks myself what am I actually paying for when I purchase a watch.
In my own analysis, I categorize the 'value' into two:
1. Value outside the watch.
2. Value inside the watch.
I will start with the first category. Value outside the watch to me is the 'brand equity'. If there are any 'value' to this, it is not 'in' the watch. It is in the 'market'. In the perception of others. That is why it is 'outside' the watch.
We have to admit, watches, like other luxury items serve as status symbols for many people. Just like cars. If we need a watch to 'upgrade' our status, we must be willing to pay a premium. This is because these watches 'cannot' be sold at a lower price, lest a 'poor' man could afford. The 'price' of this watch must exceed certain 'minimum wages' line to put you in a different class. Although watches of this category should and normally are of 'higher' quality, it isn't always the case. The reason is sometimes we are so 'blinded' by our chase for status, we become less critical of the actual quality of the watch. If the customers are less critical, then watch makers will lax.
Variations to this category includes excessive advertisement and celebrity associations. Even the 'hope' that 'this watch will be a good investment till the next generation' to me is a 'value' that lies outside of the watch.
The second category is the 'intrinsic' value of the watch. The most obvious example is why a gold case watch costs more than a steel one. The more significant is the 'value creation' of the watch. How many manhour and effort has been put into making the 'quality' of the watch. Finishing. Artisan craftmanship. Design. Innovation. Trace the whole production process to know what has been done to the watch. These things stays inside the watch. The best way to test this value is to ask yourself would you still buy this watch at the same price if you remove the 'expensive' brand from the watch (to quote from Dr Bernard Cheong).
The question is which 'value' do we really value? That is why some say it is subjective.
The fun part about watch buying is that there is no single watch which fulfills only one category (although the independants are close). Just difference in proportion. And the question of 'reasonable' profit margin. This is even made harder when brands who are conscious of their 'quality' boost up their price even more. It is very challenging but but an enjoyable process.
Our children will inherit what we own. The question is whether I want them to think of me as a 'brand' and 'trend' chaser or a 'status' slave or someone who buys what others think is 'good'. Or someone who searches endlessly for quality, informed and careful. Or someone who just spend too much time thinking about watches 
Pat
Value for money relation in top brands?
Value is subjective...
