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Marketing Case Study: Bose - Page 2

post #16 of 31

Re: Marketing Case Study: Bose

Quote:
Originally posted by erikzen
The major competitors for Bose
The major competitors to Bose are actually the other mass-market products sold at places like Best Buy and Circuit City: Sony, JVC, Panasonic, etc. You'll never see Bose in a better audio store.


Quote:
Finally, I would like to get the opinions of this community on Bose products. In general, it seems that Bose is not well respected as an audio brand. I would like to know why that is. Is it because Bose has moved out of the niche market of audiophile grade products and become a mass market product and, yet still tries to sell it's product for a premium?
Bose has never been considered an "audiophile" audio company. Through massive amounts of marketing and PR, the company has positioned itself as being "upscale," but it only has that reputation among people that don't know a lot about audio and that buy all their stuff in the big electronics chain stores. By overpricing their mediocre products and then convincing people that the cost premium is getting them "better" stuff, they've convinced the average Joe that Bose is "high-end" audio.

The reasons most educated audio consumers dislike Bose are (1) their stuff is very overpriced and a poor value -- you can always get much better equipment for the same price, or similar quality stuff for much less; and (2) they pretend to be high-end using gimicky sales tactics, anti-competitive reseller agreements, and massive advertising campaigns.



Quote:
If Bose is a weak product, or is perceived to be a weak brand name among audiophiles that is a weakness that needs to be explored. Also, if their products really are crappy that needs to be explored, too.
Not really; from a marketing point of view, neither of these points really matters. Bose is not trying, like many "audiophile" companies, to produce the best-sounding equipment. Bose's goal is to sell the most stuff, even if that means fooling people into thinking that their equipment is much better than it actually is and, therefore, worth much more than it actually is.

Bose is actually the ideal topic for a marketing study, because the company is hugely successful at selling inferior products at premium prices to an uneducated market.


Also, I don't put a lot of stock in the article DanT quoted -- after all, there are plenty of audio products out there that provide great sound quality, great build quality, and attractive designs in tiny, unobtrusive packages. Some are less expensive than Bose stuff. But because they don't have the marketing muscle of Bose, people don't know about them.
post #17 of 31
Thread Starter 

Re: Re: Marketing Case Study: Bose

Quote:
Originally posted by MacDEF
Not really; from a marketing point of view, neither of these points really matters. Bose is not trying, like many "audiophile" companies, to produce the best-sounding equipment. Bose's goal is to sell the most stuff, even if that means fooling people into thinking that their equipment is much better than it actually is and, therefore, worth much more than it actually is.
I think it is a weakness. There are 7,444 members on this board, most, if not all of which, will never buy a Bose product. Let's say we all loved Bose and we all would buy one of their products. If we assume that all 7,444 might spend an average of $500 on Bose products, that represents $3.7 million. On top of that I would bet that many people on this board are considered audio experts by their friends and have influence over their audio purchases. Now how much money is the potential loss?

In marketing analysis, you try to identify all your strenghts and weaknesses and capitalize on them or turn them around. They have a threat to their business because there is a base of consumers that are knowledgable about audio that will not buy their products and have the ability to infleunce others not to buy their products either. Imagine if Bose came out with a new line or product that appealed to the type of people that frequent boards like this. That would represent a substantial amount of money, especially considering the way some audiohiles like to spend money. Identify the weakness and turn it into a strength.
post #18 of 31

Re: Re: Re: Marketing Case Study: Bose

Quote:
Originally posted by erikzen
If we assume that all 7,444 might spend an average of $500 on Bose products, that represents $3.7 million.
to paraphrase somebody much more evil than i. "why make millions when we could make... billions."
post #19 of 31
I dislike Bose because they are, blatantly put, liars. Deceptful is a better word, but it's not a word one who hates Bose would use.

I remember walking into their store. Here are two things that I remember:
1. Speaker underwater
2. Speaker effect on small pieces of stirofoam
What the demonstrations do? Look pretty. What do they prove? Nothing.
post #20 of 31
Thread Starter 

Re: Re: Re: Re: Marketing Case Study: Bose

Quote:
Originally posted by usc goose
to paraphrase somebody much more evil than i. "why make millions when we could make... billions."
I'm not saying switch from selling to the masses and concentrate on a niche market. I'm saying they have an opportunity to make even more money. In other words why make $1.6 billion when you can make $2 billion. Hey, I have no idea what the market potential might be, but you can always make more!
post #21 of 31
IMO, Bose is the "hi fi" of the mass consumer audio market. For the most part, they define what good sound is. They are what the average middle-american consumer aspires to. The same consumers in a higher tax bracket aspire to Bang & Olufsen, which has a tiny (elite?) market share but pulls in 1/3 of what Bose does in $$$ terms.

Both present audio products as home furnishings. Indeed, as elements of decor. Both are "lifestyle" products. Pretty, small machines for producing background music.

"High end" audio, (formerly "hi fi") is a completely separate market, with a different consumer. The consumers of high-end audio generally disdain all non-"high end" products. Bose, as the omnipresent and self-lauded leader of mass market lifestyle "hi fi" naturally bears the brunt of this disdain.
post #22 of 31
Thread Starter 
OK I found out about the lawsuit with Consumer Reports. CR said that the sound tended to wander around the room and Bose was very upset. He sued CR in 1970 and the case was finally settled in favor of CR 13 years later. I have not seen reference to any other type of legal actions and seeing as this lawsuit was started more than 30 years ago I don't think it has much bearing on the company right now.
post #23 of 31
Thread Starter 
Quote:
Originally posted by Carlos3
Both present audio products as home furnishings. Indeed, as elements of decor. Both are "lifestyle" products. Pretty, small machines for producing background music.

"High end" audio, (formerly "hi fi") is a completely separate market, with a different consumer. The consumers of high-end audio generally disdain all non-"high end" products. Bose, as the omnipresent and self-lauded leader of mass market lifestyle "hi fi" naturally bears the brunt of this disdain.
Well, it's not a bad business to be in if you can make as much money as they do.

Imagine if Bose put out just one "true" high end line. They might eventually win over the hearts of the audiophiles and who knows where that might lead.
post #24 of 31
As a marketing issue, I think their Bose brand would actually work against them if they attempted a "high end" product line. Even if these hypothetical products sounded wonderful, I think they would be rejected by the high-end consumer on a branding basis.

But there is no reason for Bose to bother with the small, fiercely competitive, and possibly shrinking high-end market, when they have the leadership and established high-profitability of the market they are in.
post #25 of 31
Thread Starter 
Quote:
Originally posted by Carlos3
But there is no reason for Bose to bother with the small, fiercely competitive, and possibly shrinking high-end market, when they have the leadership and established high-profitability of the market they are in.
You may very well be right. However, I'm not going to be getting that deep into the analysis. I'm going to St. John's, not Harvard Business School.

I'm curious. Why do you say shrinking?
post #26 of 31

Re: Re: Re: Marketing Case Study: Bose

Quote:
Originally posted by erikzen
I think it is a weakness. There are 7,444 members on this board, most, if not all of which, will never buy a Bose product. Let's say we all loved Bose and we all would buy one of their products. If we assume that all 7,444 might spend an average of $500 on Bose products, that represents $3.7 million. On top of that I would bet that many people on this board are considered audio experts by their friends and have influence over their audio purchases. Now how much money is the potential loss?
The people who visit Head-Fi regularly tend to be people for whom sound quality is of utmost importance and who are willing to do a bit of research and learn about the best products. These people are a *significant* minority in the world of consumer audio. Even if they tell their friends not to buy Bose, some won't believe them "because Bose is the best," and the rest won't make much of a dent into Bose's sales.

Most audio customers fall into two other groups: (1) people for whom sound quality isn't that important but "name brand" status is; or (2) people who care about sound quality but who just buy the most "well known" brand available at all the big stores.

Given the relative sizes of these two markets, Bose is clearly going for sales over quality. To appeal to the "audiophile" market would entail shifting money from marketing to research, and the end result would probably be a net loss in revenue because the "audiophile" market is so small.

In addition, if Bose were to come out with a "high-end" line, it would undermine decades of advertising that claimed Bose was "the best" -- after all, if they were already the best, how could they come out with a better line?
post #27 of 31
Thread Starter 

Re: Re: Re: Re: Marketing Case Study: Bose

Quote:
Originally posted by MacDEF
The people who visit Head-Fi regularly tend to be people for whom sound quality is of utmost importance and who are willing to do a bit of research and learn about the best products. These people are a *significant* minority in the world of consumer audio. Even if they tell their friends not to buy Bose, some won't believe them "because Bose is the best," and the rest won't make much of a dent into Bose's sales.
I only use this board as an example that there is a small but significant group out there that Bose will never reach. It will take some work to quantify who they are. I would imagine that this group is also in the demograhic that Bose desperately wants to get into but can't reach - 18-34 year olds.



Quote:
Originally posted by MacDEF
To appeal to the "audiophile" market would entail shifting money from marketing to research, and the end result would probably be a net loss in revenue because the "audiophile" market is so small.
The thing is Bose already spends a good amount of money on research. It's just that they haven't addressed the "audiophile" market. You may very well be right that it might not pay off and that's why they haven't moved in this direction.

Quote:
Originally posted by MacDEF
In addition, if Bose were to come out with a "high-end" line, it would undermine decades of advertising that claimed Bose was "the best" -- after all, if they were already the best, how could they come out with a better line?
An excellent point. Bose would have to get their marketing muscle in full swing to pull that one off. However, they could always say that "through our continued efforts to develop the latest technology in the field of audio we are proud to present the new Bose "Quadport 1001." Every successful company is expected to develop new products so an "audiophile" grade product could be the result of the "latest technological advance".

All in all, you are probably right. Bose has captured the consumer market for speakers among the two groups you outlined. Even though there are opportunities out there the risk might outweigh the benefits.
post #28 of 31
Thread Starter 
Bump just in case anybody else wants to add something. Bose rants welcome.
post #29 of 31

Hi,

 

Doing marketing report on bose too and was wondering did you get many replies in relation to our questions on the bose corporation?

 

Any info that you could pass on would be gratefully appreciated.

 

Kind regards,

Kieran

post #30 of 31

Do you think that the reason they have trouble getting 18-34-year old audience may be the Internet?  For those that really want nice headphones, there is limitless amounts of information on headphones on the Internet, and they would realize that Bose is not really that great in terms of sound quality, while Bose is trying to make themselves sound like they are the best.  Older people would not look at this information as much as younger people.  That is not to mention that fashion has to play a part in this (people don't buy Beats only for sound!)

 

Note- This was done with no research whatsoever-- it just would make sense for me from personal experience and friends I have (I am 17).


Edited by milligan - 10/29/12 at 6:05am
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