The major issue in the Seiko's moving upmarket

The biggest issue Seiko encountered during its moving up market is its brand recognition in the high-end watch market outside Japan. Several historical reasons resulted in the issue: 1) mass market positioning; 2) different marketing and merchandising strategies in different regions; 3) low pricing strategy; 4) no uniformed brand image with extensive brand portfolio; 5) product/manufacturing-oriented management decisions rather than brand-oriented management decisions.

Judged from customers' expectation in the high-end watch market, we can see that, for high-end consumers and other luxury watch aficionados, the perceived value of a watch hinged upon its quality, uniqueness, exclusivity and the ability to enhance social status or prestige. While precision and technology were valuable, they might not necessarily command significant price premiums in the luxury watch market. Therefore, Seiko should put its efforts on the enhancement of brand awareness rather than the technological advancement.

To differentiate from Swiss-made luxury watches which possessed the image as "classical" and "inherited", Seiko can emphasize its brand image at "history and innovation" which was actually lacked in swiss-made watches and target at younger generation of customers in the high-end market.

This group of consumers looks for originality, exclusivity and innovative mechanisms. They look for something to show their social status or prestige, but meanwhile, different from what their parents or grandparents have. They look for something which combined the “classic” and “innovation” at the same time to represent the charters of them. And most importantly, this group of consumers will present growing consumption power in future.

You get my vote on that. Technical innovation wouldn't be the top priority consider item for the high-end watch market. The luxurious brand recognition may need generation from generation.
Seiko had pretty poor brand strategy. Only one Grand Seiko for the high end market. Take Swatch for example, they have Omega, Longines, Rado, Tissot ...couple brand combination to take over the whole high end market.

In my opinion, if Seiko wants to move up market, it can't only rely on the advanced technology only. Some famous luxury watch brand has its long term history deposits and cultural contents, which can be obtained through very long periods to become “classical”. So, it is not easy for Seiko to shape luxury watch brand in people’s minds……

I could not agree more! Excellent sum-up on the history causes and constructive solutions to address some key problems...
I'd like to add one point on "4) no uniformed brand image with extensive brand portfolio". My idea is that SEIKO may create and foster a toally new brand name for the top class category, so that the connection with SEIKO, a widely belived mass brand, can be severed compeletly. As buiding up a new brand and getting it rooted in people's mind takes quite long time, maybe as long as 2-3 generations or even more, SEIKO needs to map out a long term strategy to guide the process. Any movements trying to gain quick returns could make things even worse. So be patient and down-to-earth for SEIKO...