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Bose Presentation.pdf
- 1. Case analysis Presented By: Gauri Surti
- 2. Let's talk about your headphones.
- 3. • The market for headphones was booming in November 2017 • Several people had been considering changing their listening devices because of the widespread use of smartphones and music streaming services like Spotify and Apple Music • Consumer electronics businesses' technological advancements led to better feature sets and more affordable costs, producing a $6 billion global headphone market each year. OverviewoftheAudio EquipmentIndustry
- 4. 1964 Bose was founded by Amar Bose 1975 By this year, the Bose 301s were the best-selling speakers 2000 Introduction of the Bose Quiet Comfort (QC) headphones 2017 By this year, Bose had expanded its distribution History ofBose
- 7. CompetitorAnalysis Beats concentrated more on advertising by using internationally recognized athletes and celebrities in order to capture 62% of the market share for high-end headphones • Lady Gaga and Justin Bieber are two examples (Dolan, 2017) • Beats dominated the premium headphone market with a 62% market share in 2017, as opposed to Bose's 22% market share
- 8. Briefoverview ofBeats -Founded in 2006 by Dr. Dre and Jimmy Iovine. -Acquired by Apple in August of 2014 for $3 billion. -Only the Beats Studio Wireless Headphone has noise-cancelling technology. "Hear What You Want" ad campaign: -Featured prominent sports figures. -Also, the campaign ran during the NFL x Bose partnership, leading to Colin Kaepernick being fined $10,000 for wearing his Beats to a postgame interview.
- 9. BEATSVSBOSE The average consumer rating for Bose is higher than Beats. Additionally, Beats' number of reviews for the Beats Studio and Beats Solo3Wireless headphones on Amazon and Best Buy are higher than Bose. ***These two are important to note because online reviews at retailer websites was ranked #1 for important sources of information that is utilized by consumers for the purchasing decision. Source: compiled by casewriter from company websites
- 11. "BETTERSOUNDTHROUGHRESEARCH" Bose has recognition through its noise-cancelling technology, and positions itself as a brand with premium, high-end products that utilize noise-cancelling technology.
- 12. ● Advertising Spending: averaged $200 million in recent years. ● Through 2015, Bose had an in-house advertising program that partnered up with outside agencies as needed. ● Late 2015: Grey Advertising appointed as Bose's "global creative agency." ● Bose also partnered with the National Football League to become the "Official Headphone and Headset of the NFL." ○ Numerous NFL players, such as Russel Wilson, have been featured in advertising. Positioning&MarketingEfforts
- 13. Bose'stargetaudience VALUES Demographics INTRESTS Age: 25-54 Gender: Male and female Income: Middle to high income earners Education: College educated Occupation: Professionals, executives, and business owners Location: Urban and suburban areas Behaviors PERSONALITY LIFESTYLE Health conscious Active Enjoys music & Technology Quality Excellence Prestige Innovative Sophisticated Discerning Travel Fitness Technology Regularly purchase hi-end technology
- 14. SWOT Strength • Stellar brand reputation • Innovative products like Noise Cancelling Headphone • Diversified portfolio ranging from headphones to speakers to home theaters • Strong visual identity • Large distribution network Opportunities • Growing market for wireless audio • Emerging markets • Partnerships & Collaborations • Product line extensions • Technological Advancements Weakness • Premium priced products • 2nd position in Headphone market • Heavy reliance on Advertising • Heavy dependence on Technology that might take years to develop • Perceived boring designs Threats • New Entrants • Changing technology can make products obsolete faster • Negative Reviews or Brand Image • Shift in consumer preference • Acquisition & Mergers
- 15. e s t l e P • Trump takes office in January 2017 • Longest streak of economic growth in 20 years • Increase in disposable income of Americans • Shifting buyer behavior as more consumers switch online • Mass customization is taking the world by storm • Cultural movements such as BLM, #MeToo, and a rise in environmentalis m leads to higher expected brand values from consumers • New music and musicians make a breakthrough in 2017 • Digital device ownership growing among teens • Increase in paid social media advertising • Tik Tok is released • Tax Cuts and Jobs Acts of 2017 slashes tax rates for corporations and individuals • Music Modernization Act improves songwriter royalty rates from digital streaming platforms • US withdraws from the Paris Climate Agreement • Funds for Environmental Protection Agency are cut by almost 30%
- 17. Bose’s current $200 million in advertising is seeing little returns in market share. Although many consumers rate Bose as a superior product, Bose struggles to communicate that value to the market. Bose needs to invest in a new communication strategy that will reinforce its brand persona. CommunicationStrategy Alternative #1: Investing in New
- 18. #1Communications Strategy Pros • Strong potential to change customer perception. • Increase Bose visibility, generate sales, boost loyalty, and improve authority as market leader who rely on research and innovation, “Better sounds through research”. • Differentiates Bose products from Beats through advertising messages and communication strategies Cons - May leave little room/funds left for innovation and new products. - Mislead Bose orientation toward R&D and innovative technologies - High Advertising costs may not be sustainable in the long run - Communication alone may not be enough to differentiate Bose products from Beats, especially if they have very similar products
- 19. For this group of customers, this purchase is a high-involvement purchase. Research has shown that the effect of ads is weak for high-involvement products. Instead of relying on advertising to retain market presence, we can reduce our ad spending and instead reallocate to expanding product portfolio and R&D. ProductResearch& Development Alternative #2: Investing in
- 20. #2Research & Development Strategy Pros • Focuses on Bose’s strength – quality, something that harder for Beats to replicate and allows for more differentiation between ourselves and Beats • Maintains Bose’s competitive advantage of innovative-oriented approach • May improve cost-effective spending in the long run, as improved products can drive sales and reduce the need for expensive advertising. Cons - Awareness for new products might be hard to accomplish, which may lead to a short-term decline in sales as advertising spending is reduced and resources are redirected toward R&D. - R&D costs exceed the profit - Provide competitors an opening to imitate and communicate the new tech more efficiently, which lead to losing market share in a rapid environment. - New technology/innovation doesn’t guarantee the success of the outcome, and consequently sales and revenues. - High quality products are the entry fee to any competitive market, however holding on a competitive advantage and communicating it effectively to the right customer is what makes the real difference for customers and competitors
- 21. Alternative1 Communication Strategy Alternative2 Research & Development Strategy Whichstrategy shouldBose Adopt?
- 23. Anewcommsstrategyisnecessarytoachievemarketpenetration Bose Users Median Age = 45 Beats Users Median Age = 34 Vs. HOWEVER, Millennials and Gen Z make up 52% of the headphones users' market On average, they spend $123 MORE on mobile accessories than the average user
- 24. Aneffectivecommunication strategyputsthecustomerfirst To stay culturally relevant, Bose needs to shift its communications strategy to meet shifting consumer values Changing Customer Values in 2017: • 75% of consumers want brands to be authentic and humorous on social media • 62% of Millennials are more likely to be loyal customers, if a brand engages with them on social networks • 54% of consumers read product reviews online before purchasing • 9 in 10 Millennials would switch brands to one associated with cause customers want brands to be: Relevant Engaging Customer-proven Purpose-driven =
- 25. Relevant,engaging,customer-proven,andPurpose-drivenimplementation 01 Strong Content Marketing Strategy 05 02 03 04 06 New Social Media Campaigns Offer Social Proof Innovation in advertising Improve ux on website Increase engagement on website 07 11 08 09 10 12 Improve after- purchase experience attractive loyalty programs Encourage brand trials Immersive promo events invest globally Partnerships and sponsorships
- 26. Create astrongcontent marketingstrategy To establish and nurture relationships with your prospective and existing customers.
- 27. If we want to meet Millennials and Gen Z where they're at, we need a social media strategy that is consistent and enhances Bose’s presence on consumers' mind. Some social media campaigns could include: • Having customers create playlists which will be featured on Bose's social media. • Everyday consumers showing how Bose products enhances their everyday, at work, fitness, etc. EstablishAnInteractive socialmediastrategy
- 28. OfferSocialProof As mentioned in the case that high involvement products require intense customer research; thus, providing customer -to-customer reviews or UGC will raise Bose chances among customers to be the first choice to consider for a headphone or other audio equipment.
- 29. Focuson innovation in advertising Bose customers value product quality, and since headphones are a high-involvement product, they most likely spend hours researching a product before purchasing. To aid in that decision process and to effectively communicate value, Bose can make their educational advertising more creative and culturally connected.
- 30. UpdateTHEwebsite andimprovetheUxDesign Bose can be seen as old- fashioned and its branding as unattractive. So, updating the look of its assets would raise the perceived value of its customers.
- 31. Increasecustomerengagemen t& experienceontheofficial websiteofBose Providing personalized offers, reco mmendations and customized prod ucts (make customers purchase on t he official website rather than a third-party website)
- 32. Improveafter-purchase experience Increase customer loyalty and retention by offering exceptional customer service and incentives for reviews and referrals.
- 33. attractiveloyalty programs Create loyalty programs that offer early access to new or exclusive products and provide VIP events such as concert meet and greet with artists.
- 34. encouragebrandtrials Offer a trial period for Bose products or a trade- in/recycling program where customers can trade in previous Bose or competitors' headphones for a discounted Bose product. Sustainability is a growing area of concern in 2017, and Bose can communicate their initiative in sustainability through such a program.
- 35. Immersive promoevents We can create immersive experiences for customers to try Bose products whether headphones, speakers, etc. Examples of these can be soundproof pods to try out different speaker types, virtual concert experience, and silent-type disco events to try headphones.
- 36. InvestGlobally Although Bose is well-known in the US, there are opportunities for Bose to become a global leader. They can focus on localized campaigns and partner with local retailers to reach new emerging markets.
- 37. Partnershipsand sponsorships Bose needs to find partners and spokespeople who represent their brand values well. Examples of partnerships include: - Celebrities who are famous globally - Music festivals, sports events, record companies - Leaders and organizations in the digital, technology and businesses spaces - Podcasts geared towards music or tech - Global music education programs giving students access to high-quality audio equipment and trainings
- 38. New Social Media Campaign With Advertising Focused on Superior Innovation + Influencer Activation Increase Personalization and Customization on Website + Improved Customer Service Establish Strong Content Marketing Strategy to transform Brand Perception by year1 Immersive Promotional Events Throughout the US Establish Strong Loyalty Programs to Improve Retention and After-Purchase Experience (Brand Trail and Trade-in) New Product Line to innovate & improve By year5 New Sponsorships and Partnerships Invest Globally with Global Campaigns and Retailers by year10 Implementationtimeline
- 39. KeyProjections 10th Year 5th Year 1st Year Current (2017) 37% 29% 24% 22% Market Share above $100 Price point $6.8B $5.1B $ 4B $ 3.8B Revenue 1,000,000 500,000 100,000 87,846 Followers 85% 82% 75% 70% Brand Aware ness
- 40. CurrentStrategyVsNewStrategy Pricey Product with heavy focus on Technology Perceived boring looks Failing to effectively target younger audience Limited focus on building community & engaging customer Only utilizing sports influencers Targeting a less price sensitive segment Changing brand perception Focused segmentation and targeting Broader collaboration and influencer plan Build and engage community on all platforms
- 41. CREDITS: This presentation template was created by Slidesgo, including icons by Flaticon, and infographics & images by Freepik. Gauri Surti Do you have any questions?
- 42. Appendix– Projectionscalculations Forecast: Global headphone market to grow at a CAGR of 5.46% during the period 2017-2021 - Technavio's Analysts Projected Revenue = Previous Year's Revenue * (1 + Yearly Growth Rate) Projected Market Share = Previous Year's Market Share + (Projected Units Sold by the Company / Total Units Sold in the Market) X100 *Assuming no key disturbances in market and Beat's market share stay same Projected Revenue (in billions) Projected Market Share Growth Rate Assumption Year $3.8B 22% 7% 0 (2017) $4.006B 23.54% 6% 1 (2018) $4.283B 24.99% 7% 2 (2019) $4.617B 26.33% 7.50% 3 (2020) $4.848B 27.61% 5% 4 (2021) $5.109B 28.79% 5.50% 5 (2022) $5.418B 29.87% 6% 6 (2023) $5.827B 31.14% 7.50% 7 (2024) $6.183B 32.18% 6% 8 (2025) $6.543B 33.22% 6% 9 (2026) $6.861B 34.16% 5.00% 10 (2027)
- 43. Appendix–Sources Sources: • CMR Berkeley • CNN • 2017 Cone Communications CSR Study • Council of Foreign Relations • Forbes • Harvard Business Publishing: Bose Corporation • Mintel • MRI SIMMONS Winter 2017 Connect Survey Results • Pew Research Center • Sprout Social