Am I comparing chalk and cheese?
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  1. #1
    Member Armchair's Avatar
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    Am I comparing chalk and cheese?

    A friend of mine is vaguely interested in watches and is contemplating buying a nice piece for himself. He's looking at a Tag Heuer Carrera Calibre 5 but asked me whenther I could think of any similar looking alternatives. I mulled it over last night and, being a bit of a fanboy for German watches, thought of the Muhle Glashutte 29er. They both lie somewhere in between a sport watch and a dress watch.

    The Muhle has a Sellita SW200 movement, modified to meet the 'Glashutte rules'. There is a good thread in the German watches forum from someone who visited the Muhle factory, explaining the amount of work that Muhle puts into the movement. I'm no expert but it seemed like they did a pretty thorough job of stripping it down and putting their own stamp on the movement.


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    Apparently the Calibre 5 is based on an ETA 2824 movement. I imagine Tag also do their own enhancements like Muhle.


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    But here's the rub. I then looked at the retail prices for both, expecting them to be pretty similar. But no, the Muhle retails for around £900 ($1,450) on a bracelet while the Tag is £1,875 ($3,000). Do Tag do lots of work to their movement that Muhle don't? I would have thought that Tag could achieve far greater economies of scale than Muhle so even if they were reinventing the ETA movement, the price differential should be minimal. Like I said, I'm no expert on movements and maybe someone can enlighten me as to why the Tag costs twice the price of the Muhle, but at the moment I can't quite get my head around that difference. Is this simply a case of people having to pay extra for the recognisable brand on their wrist?

    P.S. I'm not being anti-Tag in anyway (I quite like a lot of their watches) and hopefully this won't open a can of worms.
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  2. #2
    Member ShaggyDog's Avatar
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    Re: Am I comparing chalk and cheese?

    The difference in price has absolutely nothing to do with the differences in how the movement has been embellished or even the materials used, but everything to do with how Tag's Heuer wants to position it's brand and that particular model in the luxury watch market and Tag's massive marketing budget & celebrity endorsements etc. You are paying a premium on top as it were for all these things when you buy from many brands. How much do you think they paid to sign up Di Caprio or Tiger Woods? A lot.

  3. #3
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    Re: Am I comparing chalk and cheese?

    He's going to buy the Tag no matter what you tell him. Save your breath.
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  5. #4
    Member drunken monkey's Avatar
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    Re: Am I comparing chalk and cheese?

    OK, seeing as this WUS truism has been brought up again, let's take a little look at the reality of it.

    TAGHeuer spend about $20million on marketing in the US market.
    They also make around 700,000 watches every year.

    Simple maths gives us about $30 per watch.
    Let's say they spend that much again in South America, Europe, Russia and Asia and then add one more for luck which gives us a neat $180 per watch.
    Let's say that the money for ambassadors is a separate issue. If that is the case, every additional 5,000,000 adds $5 per watch produced.

    So while you're not entirely wrong when you mention that it is to do with the market sector in which they operate but mostly, it will be because of the differences between the operations.
    I am not sure just how big Muhle Glashutte is but when you sell internationally, run boutiques in most of the major markets in the world, employ around 800-1000 people and produce 700,000 watches a year and have to manage the supply chain to do so, there will be costs involved that the smaller manufacturer doesn't have to think about.
    End result, higher prices despite the seemingly obvious economy of scale argument.



    Quote Originally Posted by ShaggyDog View Post
    The difference in price has absolutely nothing to do with the differences in how the movement has been embellished or even the materials used, but everything to do with how Tag's Heuer wants to position it's brand and that particular model in the luxury watch market and Tag's massive marketing budget & celebrity endorsements etc. You are paying a premium on top as it were for all these things when you buy from many brands. How much do you think they paid to sign up Di Caprio or Tiger Woods? A lot.
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    Member ShaggyDog's Avatar
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    Re: Am I comparing chalk and cheese?

    Of course. I did mean to make that point about Tag having a massive global retail presence but I guess that I forgot to mention it above. But I think as well the price is directly related to how Tag wants people to perceive it's rung on the ladder as it were. They need their entry level watches (F1 range) to be priced above say Tissot's similar watches so that the brand is perceived as being a higher end luxury one, and also then to give Tissot or similar brand owners something to aim to 'upgrade' to. You then need to price your other lines (Carrera say) accordingly to give F1 owners something to upgrade to for example and so on. Tag will also be looking at the Carerra range with a view what Omega for example are putting out in the same perceived sector and trying to position their own watches price range in relation to that. So yes, a lot of things do come into play when companies are pricing their watches, not just marketing as rightly pointed out above.

  7. #6
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    Re: Am I comparing chalk and cheese?

    No, it's more like cool v mundane, the Muhle is cool.
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  8. #7
    Member mpalmer's Avatar
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    Re: Am I comparing chalk and cheese?

    To me, the Carrerra is a plain jane watch both in movement and the case and dial for the price they are asking. I might even go so far as to say it is about the worst value out there (sorry owners, feel free to rip me up and down if you like).

    You can buy a grey market Zenith El Primeiro, for the same money!! This is where I would look if you want something semi dressy yet sporty and had $3,000.
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    Re: Am I comparing chalk and cheese?

    Quote Originally Posted by mpalmer View Post
    To me, the Carrerra is a plain jane watch both in movement and the case and dial for the price they are asking. I might even go so far as to say it is about the worst value out there (sorry owners, feel free to rip me up and down if you like).

    You can buy a grey market Zenith El Primeiro, for the same money!! This is where I would look if you want something semi dressy yet sporty and had $3,000.
    +1

  10. #9
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    Mühle Glashütte 29er vs. Tag Heuer Carrera Calibre 5

    Quote Originally Posted by Armchair View Post
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    Like I said, I'm no expert on movements and maybe someone can enlighten me as to why the Tag costs twice the price of the Muhle, but at the moment I can't quite get my head around that difference. Is this simply a case of people having to pay extra for the recognisable brand on their wrist?
    I guess the problem is your location.

    That watch seems to be model TAG Heuer Carrera WV211B.BA0787
    In the USA you can buy that watch on bracelet any day for $1875,
    and perhaps find it for closer to $1600 if you spend some time shopping.
    Do some online searching, and you can see the prices for yourself.
    Of course, you have to pay the 20% VAT.

    So, the Mühle 29er is about the same price as the Tag. However, in
    my opinion Mühle watches have better craftsmanship. I would choose
    the Mühle.


    Thanks,
    rationaltime

  11. #10
    Member ken_sturrock's Avatar
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    Re: Am I comparing chalk and cheese?

    Quote Originally Posted by mpalmer View Post
    To me, the Carrerra is a plain jane watch both in movement and the case and dial for the price they are asking. I might even go so far as to say it is about the worst value out there (sorry owners, feel free to rip me up and down if you like).
    I think the Carrerra is a beautiful watch, but agree that they are expensive for what they are. Ultimately, though, people are gonna buy what they want (or are told to want).

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