Patek Philippe

johnswatch1
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What is Patek trying to tell me about their brand through price signals?

The recent 'Why we love Patek' threads have been interesting and certainly highlight the core attributes of the brand that us collectors love.  I’m amazed that a brand like Patek can stir up such intense feelings amongst collectors and I think it’s important that the company is made aware of exactly how we feel.

Let’s get it out into the open – we have to talk about pricing here as it’s the main thing encounter whenever we deal with the company.

I understand the simple economics of supply and demand and so appreciate why their watches cost so much.  Hard to argue with it.  Lots of people want them – limited supply – hence high price.  It’s not the cost that I want to discuss, it’s the price.

A price is far more than the amount of money I need to pay for something – it’s a piece of information, a signal for the consumer.

What then is the company trying to tell me?

There are several options:

1.       Look at the value! If you had to purchase separately look how much you’d pay

2.       We’re here to help – offered at cost

3.       An amount for our trouble, nothing more

4.       This cost me a lot to produce

5.       This item is rare and highly desirable (a Giffen good perhaps where high price drives demand)

6.       Supply is very limited

7.       Market rate – no information implied

8.       High quality service provided – no corners cut

9.       If you’re stupid enough to pay it then I’m happy to take it

The initial purchase price of the watch I believe satisfies 4, 5, 6 and 8.  I would argue that option 9 doesn’t apply here as there is no substitute for the actual brand.

Now how about obtaining an extract from the archives?

This is something that’s done as a service to collectors.  It helps identify a piece, establishes a certain level of authenticity and thereby helps promote the brand in the all important secondary market.

I have to pay to get an extract – understandable.  Now on to the price – what information does that convey to me?  Have a look at that list again.

Now let’s talk about perishables – watch straps to be precise.  I’ve just been quoted the Euro equivalent of US$550 for a strap – no buckle or other accoutrements.  Through pricing – what information are they conveying to me?  Perhaps I misunderstand and in fact they make a significant amount of money from strap sales but given that most AD’s have a very limited supply I expect this is not the case.

Vintage servicing and restoration – a tricky one here.  Given the brand’s tendency to market itself as a watch for generations this is something that’s clearly important for the brand.  The information conveyed to the consumer is ‘This cost a lot to produce’, ‘High quality service provided – no corners cut’  for sure.  But many of the quotes (and associated waiting times) convey something additional.

Every time I deal with Patek Philippe I come away thinking ‘why do they hate me so much?’    So my question for the forum is this – do Patek Philippe really have no respect for their clientele or am I over-thinking this whole thing?

What information do you feel they are conveying to you through pricing? This is something I'm trying to understand as  I really love their magazine and their advertising but I feel that their price signals tell me something very different about how the brand views me as a customer.  Marketing departments may tell me one thing but the pricing is something set by the very head of the organisation and so may be viewed as more authentic?