Sunteți pe pagina 1din 2

Analysis

B&O does Niche marketing, i.e. marketing specific products to a limited number of customers.
The media products – TV, radio, speakers are high-end designed and very expensive, on a deep
level B&O does micromarketing. Their product is differentiated through their design. The main
geographical segments are duty-free EU where UK and Denmark contributing most. Out of the
82% of export revenue maximum share came from the US. On a demographic scale high-income
customers are targeted and on psychographic scale liberal art professionals striving for
perfection. The customers of B&O are occasional buyers where most of the sale being driven
near Christmas. The products are highly durable with a life span of 15-20 years where the
industry average is 24 months, the high premium over the price that ranges from 5-10 times can
be justified with this factor. Another reason for the high price was that products offered more
emotional benefit than functional ones through unpredictable design and experience. The product
mix consisted of vast ranges under the category of speakers, CD players, and TVs and for a
particular item say TV different sizes are offered. Designers are the main strength of the
company. The company was considering luxury brands their competitors instead of generic
audio, video manufacturers like Philips and Sony. The main setback came when Apple launched
iPod that is technologically more advanced in terms of networking and interface.

Remedies
The company was providing high-end products for the same targeted customers for very long.
They did not diversify. There are times when moving into new markets and introducing new
products are necessary, B&O shall diversify early. The company did not understand their
competitors very well, although the media products are high-designed luxury items but
comparing them with BMW doesn’t make any sensible rationale. The company should attract
more customers, 80% of US revenue came from 1000 customers only, the concentration
increased risk, however, in the case of B&O they are loyal. B&O never employed in house
designers which it should, this led to unstructured innovation when the company wanted to
counter Apples iPod by building its own software through a parallel design team Idealab, it took
it considerable time to give any deliverable.

ID
The company enjoyed a strong brand. More innovation led activities should have been started by
the management. Their core strength is their designers who bring differentiation in the product.
Their main designer David Lewis was retiring soon, this created a leadership vacuum. Further,
they could not understand the 5th force of Porter’s competition model that is a threat from new
entrants. It was Apple which caused disruption to their market through new networking
technology-enabled device iPod. Although, the iron of Apple in innovation is no match for
others. Further, the company put too much emphasis on designing aspect and disregard
technology initially. This led to lag and it kept increasing, they failed to adapt.
Figure 1: Perceptual map of B&O

S-ar putea să vă placă și