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Danny Mosco
Professor Trapp
Marketing 430
May 8th, 2014
History
“ We know very well absolute perfection cannot be attained, but we will never stop
striving for it” are the famous words spoken by Sidney Shure, founder of multi-national pro
audio company Shure Incorporated that currently operates in approximately four continents and a
dozen countries. S.N. Shure started it in 1925 as a radio company selling radio parts kits. Its first
office was on Wells Street in downtown Chicago. In 1926, just a year later, they were already
publishing a catalogue of radio parts, which was one of only six at the time in the industry. It
wasn’t until 1929, at the start of the great depression, that Shure first got into microphones,
becoming the exclusive distributor for a small microphone manufacturer. In 1931, Shure began
to develop its own proprietary microphone, and by 1932 Shure introduced the Model 33N Two-
Button Carbon Microphone, making it one of only 4 microphone manufacturers in the United
States. This development would forever change the trajectory of the company. Perhaps one of the
biggest breakthroughs in the history of Shure came in 1941 when they secured a contract to
manufacture microphones for United States Armed Forces in WWII. Because of absolute
necessity to manufacture tough and reliable equipment for the United States military, this
radically shaped how Shure would manufacture their microphones from that point forward,
which is rugged durability and at the pinnacle of high quality standards (1).
1965 and 1966 were landmark years for the company; 1965 produced the SM (studio
microphone) 57 and SM58 respectively. To this day, they remain two of the most iconic
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microphones for not only the company itself, but for the entire world. The SM58 microphone has
been the best selling microphone in the world for over 40 years. The SM57 shares similar market
dominance, as virtually every concert anyone will ever attend will feature multiple SM57s in use,
as well as every US President utilizing a pair of SM57s on his podium since Lyndon B. Johnson.
Ironically, the SM57 and SM58 are used extensively all over the world for live performance,
even though they were both intended to be for studio use (hence the SM being studio
microphone). This is due to the extreme durability these microphones have, which routinely are
subjected to abuse through the demands of tours (2).
Competition in the World Market
Shure faces competition in the world market for audio from primarily, but not limited to,
Sennheiser, AKG, and Audio-Technica. All of the brands manufacture products that are in direct
competition to Shure, especially in the realm of microphones and headphones/earphones. Still,
Shure has a competitive advantage due to its the strength of its brand equity (3) it has built over
the years from its SM microphones. Sennheiser and AKG both originated in Germany, with
AKG founding its first subsidiary (4) in Germany in 1955 (http://www.akg.com/About+AKG-
806.html). Sennheiser, founded in 1945, is perhaps the largest competitor for Shure, with a
workforce of 2,239 worldwide and subsidiaries across 17 countries (5). In the United States,
Sennheiser also distributes other renowned studio brands such as Neumann and K-array speakers
(6). Despite Sennheiser being one of the top competitors, it is a well known story within the
company of when founder Sidney Shure sent Dr. Fritz Sennheiser some coil tapping machines to
help them get their production running again after WWII. This anecdote is a microcosm of the
values the company operates under, even to this day.
Shure’s Marketing Mix
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Shure’s product line features a wide range of audio products that go beyond microphones,
including headphones, in-ear monitors, mixers, wireless systems, turntables, and other
accessories. Regardless of what the application is, Shure’s product positioning (7) is about
making products that “help you define your sound,” and taking “equipment issues out of the
audio equation.” As a result, their target market (8) is large and wide, catering to numerous
segments (9), including: the President’s podium, the preacher’s podium, Network Television, the
Grammy Awards, radio, recording studios, churches, stadiums, music halls, gymnasiums, police
radio, etc. Whatever audio application is required, Shure’s diverse product mix is perfectly
positioned to meet the customer’s needs. Shure also has a very favorable position in terms of
product adaptation (10), as their products require virtually no adaptation, save for a change of
language (11).
Shure’s international pricing strategy (12) also stays relatively consistent, as a typical
SM58 or SM57 is going to cost at around $100 (give or take). It is and always will be more
difficult to control prices outside of the domestic market due to several external factors, such as
exchange rates, inflation in other countries, and different cost structures, like choosing to lease
instead of owning or manufacturing within the foreign market. Again, a customer who buys an
SM57 in Hong Kong will end up paying roughly the same price, and also be getting the same
exact product as someone who buys right in Chicago near the corporate headquarters.
Shure promotes their brand through a variegated set of mediums, but one of the largest is
the endorsement of artists. Shure has artists from every musical genre imaginable to promote
their brand. A lot of Shure’s promotion also occurs through product placement (13), being that
their microphones and other products are seen in use at every concert, used by the President,
NFL referees, and on late night TV shows (14).
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Shure distributes through different suppliers around the world, and emphasizes the use of
ethical practices for all Shure suppliers and potential suppliers in the “Shure code, (15)”
including regular audits, unannounced visits and if the supplier is not up to Shure’s standards,
then corrective action, or otherwise termination of the relationship. Shure chooses to focus on
using retail stores to reach the end user of the product, and thus is able to achieve much better
intensive market coverage (16) of the markets they compete it because customers do not buy
directly from them. Shure is able to achieve good coverage of their markets because of their
hierarchechal entry mode (17) approach with wholly owned subsidiaries they have around the
world, demonstrating commitment to the consumers of that market for the long term. Shure has
many more subsidiaries than a company of their size typically will have.
Company Values
Beyond putting out a top quality product, Shure stands for its own set of values. They are
“passionate about enabling performances that engage, energize and inspire audiences -
performances that help shape the course of history.” Shure seeks to innovate so that they can
inspire - a value that remains consistent across all of the markets they serve. Customer
perceived value (18) in this sense comes not only from the functional consequences, which
already results in fantastic sound quality, but the psycho-social consequences of feeling like they
have defined and articulated their own sound, and furthermore the values the brand stands for.
Innovation, striving for perfection, honor, etc. all add to the value Shure’s customers have for the
brand. As founder S.N. Shure said from the beginning, “We know very well absolute perfection
cannot be attained, but we will never stop striving for it (19).”
Implications
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Shure has done a tremendous job to put itself in the position it is in today with the strong
resonance of its brand equity and reputation for stellar performance. No matter how successful
the company, there will never be a guarantee that they will last. Shure may have created the most
utilized live and in studio microphone ever produced, put a microphone on space shuttle flights,
invented wireless technology, and more, but that does not guarantee they will keep their position
in the pro audio market. Shure must continue to innovate and stick to its mantra of pursuing
absolute perfection, and is best advised to keep their efforts concentrated on the Asia/Pacific
market because of its growth and rising ranks of wealth, but also be careful to not neglect the
domestic market, though it is quite saturated.
References
1. http://www.shure.com/americas/about-shure/history
2. http://www.shure.com/americas/about-shure/history
3. Chapter 14, page 502
4. Chapter 12, page 401
5. http://en-us.sennheiser.com/about-sennheiser-at-a-glance-company-factsheet
6. http://en-us.sennheiser.com/about-sennheiser-at-a-glance-sennheiser-usa
7. Chapter 14, page 499
8. Chapter 8, page 283
9. Chapter 1, page 8
10. Chapter 14, page 497
11. http://www.shure.com/americas/about-shure/company-overview
12. Chapter 15, page 535
13. Chapter 17, page 610
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Strengths:
-Product line - 2 of the best selling
microphones in the world
-No product adaptation is necessary
-Large number of subsidiaries makes the
company’s reach long and deep into several
markets
- Strong brand equity and tradition
- Economies of scale
- Low cost manufacturing in Mexico plant
Weaknesses:
- No customization.
- Levels of needed production are difficult
to gauge since they are based on
fluctuating demand
- Some products have much lower
turnover
Opportunities:
Asia/Pacific market growth - opened offices
in China in 2005 and in Japan in 2006
- 2011 acquisition of Informationsteknik
opens up new customer base and
distribution channels
- 2014 open of new office in Miami
strengthens presence in the Americas
and opens up the Latin American market
Threats:
- Production of many fake Shure
microphones are in the market
- Audio-Technica’s headphones are very
comparable in quality
