Bang Olufson Marketing Analysis

sack out Olufson Marketing AnalysisThe advise of this report is to critic solelyy assess the merchandise strategies of lie with Olufsen considering their bound of credit in United Kingdom. It comments on the B2B and B2C crossroads in brief. The report comments on the followingThe large business environmentOrganisations Marketing MixOrganisations segmentation, targeting and positioning strategies.Based on the findings and observations, rough(a) recommendations be put forth at the end of the report. company BackgroundBang Olufsen manufactures a highly distinctive and sole(prenominal) betray of televisions, music carcasss, loudspeakers, telephones, and multimedia proceedss that combine technological excellence with horny solicitation.Founded in 1925, by Peter BangandSvend Olufsen in Struer, Denmark, Bang Olufsen a/s is world renowned for its distinctive range of attribute audio, impression and multimedia reapings that represent their vision Courage to constantly question the ordinary in search of surprising, long-lasting experiences.Bang Olufsen employs all everywhere 2,550 staff members and had a overthrow of DKK 4,092 million (EUR 5486 million) in the 2007/2008 monetary year. (Bang Olufsen)The Macro Business Environment closely of the BO products be manufactured in Denmark. Considering the business in UK, it has to understand the political, economic, socio-cultural and technological environment in UK. Since Denmark and UK argon the members of European Union (EU), there are approximately advantages for the organisation.PoliticalThe European Union (EU) altogetherows the free movement of goods and receipts between almost 500 million consumers in 27 EU member states. payable to this, import duty is not payable on goods sourced from Denmark, being one of the EU member states. (Business Link UK)There could be changes in the VAT and service taxation policies with the formation of current-made government. scotchThe economic crisi s and recession had affected the business of BO as throng and businesses are much likely to hold on to their cash and not to authorise it on high charged consumer goods.Due to the f on the whole in share prices and legitimate estate markets, the consumers of the high end products, like BO, go away be undersized likely to spend as earlier.An early(a) economic factor set about by the BO is currency exchange rates. As large part of the products make believed in Denmark and with the Danish Krone (DKK) pegged to Euro, devaluation of GBP to the Euro has affected sales in UK which is one of the largest markets of the company.Socio-culturalBO has follow the doctrine of Danish Design, which is renowned for its high family form and part. The products of this class are considered as status symbols and products of pride.TechnologicalCompetitors like Bose, Loewe who are to a fault known for their forge, character reference with the high prices are coming up with new products with the same functionalities as BO with equal or slightly lower prices.Due to the advancements in the technology, components are getting cheaper which may help companies like Sony, Samsung and so forth with range of products in various qualities, targeting customers spanning across price conscious segments to prime(a) foc habitd segments.LegalThe company has to ensure the protection of the trademarks of the brand. The logos and other trademarks should be registered in UK.The company should ensure that there are no patent infringements.EnvironmentalDevelop and produce products under circumstances that keep up with the makes of the standards ISO 14001 and OHSAS 18001.Bang Olufsen as an environmentally responsible company desires to create sustainable products. The considerations involved in the operation, design, and longevity of the products must be in vulgar balance with the environmental impact of output. (Environment, Bang Olufsen)The Marketing MixThe marketing mix is a combi nation of the quatern Ps ingathering, worth, Place and onward motion all used to together to meet the customer needs. To create the expert marketing mix, businesses have to meet the following conditionsThe product has to have the proper(a) features for example, it must look good and work well.The price must be right. Consumer go away need to buy in large numbers to produce a healthy profit.The goods must be in the right cast at the right time. Making sure that the goods arrive when and where they are treasured is an outstanding operation.The target group needs to be do alive(predicate) of the existence and availability of the product through promotion. Successful promotion helps a firm to spread costs over a larger yield (The Times 100).ProductBang Olufsen manufactures a highly distinctive and scoop shovel range of televisions, music systems, loudspeakers, telephones, and multimedia products that combine technological excellence with emotional appeal.Classification o f ProductSpeciality products have unique characteristics that are important to buyers at any price.BO products are classified speciality product. BO products are made to fit in at a push through where people opinion at home.BO products are designed with the philosophy that they should provideUnique experiences simplenessComfort and stabilityUncomplicated solutions make life easy placidity and longevityConsumers are ready to pay premium prices for all the above characteristics.Product Mixes, Lines and ItemsBO product mix comprises of several product pipelines such as audio, video etc. The company has a diverse product portfolio. The product range today consists of acoustic, audio, video, plasma, telecommunication, gift items/accessories, as well as the business areas Automotive and Enterprise. The portfolio has more than 50 individual products, many of which are designed and manufactured as per the customer desires. (The Beoworld)Product LineBO has various products in each line, e.g. their audio product line has passs as BeoSound 8, BeoSound 5, BeoSound 9000, BeoSound 3200 etc. They all belong to the same product class high-end audio systems. (Audio, Bang Olufsen)Four Dimensions of Product MixThe four dimensions of BOs product mix are as followsWidth various product lines such as acoustic, audio, video, plasma, telecom etc.Depth on an average, in each product line 6-8 items are offeredLength video line of the BO offers various dimensions of TV (e.g. BeoVision 7 comes in 3 different dimension viz., 50, 40 and 32)Consistency all the products lines closely related in end use as all the products finalize under similar set of products (i.e. high-end consumer appliances)(Adopted from Bang Olufsen)New Product DevelopmentThe four product-mix dimensions permit the company to expand its business in four ways. It can fetch new product lines, olibanum widen its product mix. It can lengthen each product line. It can add more product variants to each product and deepen its product mix. Finally, a company can pursue more product-line consistency. (Kotler, 381)Line Stretching and fillingThe company usually adds the items in the current product lines go bying it both-ways to some extent by adding lower as well as higher(prenominal) price products. It likewise fills the lines by releasing the products in same line with different versions e.g. a new 50 TV was engrossed in the video line.BO markets its products in a manner that opens up more than one product from the product portfolio. E.g. the home integration line which consists of remote comprises designed to control all of the other lines in just one remote control. In addition all products carry the same type of design and thus fit together aesthetically.Product managementGreat design, mixed with hardy technology, allows it to charge obscene sums to well-heeled consumers who want to buy originality and quality from an exclusive brand.Competing on price and product variety would be a unreliable game. The company is a pipsqueak in a consumer-electronics world dominated by giants such as Sony, Samsung, and Royal Philips Electronics.Like Apple, it brings out real hardly a(prenominal) products a year. In fiscal 2007 it released just 10 new models. however unlike Apple, BO keeps its handful of products on the market for up to a ecstasy or longer without abandoning them for new models or cutting their prices. (Jay Greene, 2007)Product Features/benefitsBO products are made to fit in at a place where people feel at home.Products are to a fault designed to be serviced and are expected to have a long life span. BO will actively support products for 10 years following its discontinuation and often longer.The design itself carries a price tag as does the exclusive image.BrandingBO regards itself as the only company currently bridging the gap between design and consumer electronics. (Hansen and Nielsen, 2008)The philosophy is creating audio concepts that combine brillian tly authentic sound quality, simple that surprising design and a touch of magic. So that living with it becomes a special pleasure. (Bang Olufsen Design Philosophy, Beoworld, 2010)The gear should look smart, but technical executing should be outstanding. Designers and technicians work together in close collaboration from the very start of a new product. (Bang Olufsen Design Philosophy, Beoworld, 2010)After sales serviceEvery Bang Olufsen customer is offered customised installation of products and link systems on delivery. Bang Olufsen provides the guidance and advice needed to ensure that the customer gets the full benefit of the new products from day one. (Installation, Bang Olufsen, 2010)The BO products offer performance and pleasure beyond expectations, so does the BOs International Guarantee. The Bang Olufsen product is guaranteed against all defects in guile and materials for three years. (International Guarantee, Bang Olufsen, 2010)PriceBang Olufsen for those who di scuss design and quality before price. (Who are Bang Olufsen customers?, Beoworld, 2010).BO follows the Image Enhancement Pricing object glass because BO products are seen as lifestyle products. BO products are always highly priced as the company delivers the quality, elegance, design, status quo equivalent of the price.(Solomon et. al., 2009)(Hansen and Nielsen, 2008)QualityBang Olufsen products are designed to be not only aesthetically pleasing but also essentially functional and easy to use. The expectations raised by a strikingly individual appearance must be completely fulfilled in terms of high quality performance in all areas when the system is switched on. Therefore, excellence in providing the consumer with the highest pleasure in both ownership and use rests on high quality as the common denominator of all activities and competence areas. (Competences, Bang Olufsen, 2010)PlaceBang Olufsen products are interchange by over 1.200 dealers in more than 100 countries in a n extensive network of retail stores. Approximately 65% of these stores are B1-stores, which exclusively sell Bang Olufsen products. The B1 stores score for 81% of the contribute dollar volume. (About us, Bang Olufsen, 2010)(Bang Olufsen (2010) Annual Report 2009-10, p24)Bang Olufsen products sold with the premium and luxury cars such as Aston Martin, Mercedes AMG and Audi A8 to name a few.Considering the long costs involved in the luxury boat market, it is amazing how little customers spend on their on-board estimatetainment systems, and how little consideration they give to the total entertainment experience, often buying a pre-defined package says Torben Ballegaard Srensen, CEO, Bang Olufsen. (Ecoustics, 2005)Along with premium cars, BO also offers entertainment systems in the luxury yacht market.PromotionPull PromotionIn order to promote their products and utilise their existing distribution channels (exclusive BO stores), BO needs to address their product turnover li fe cycles and provide newer and improved products to their stores.In attempt to meet the customers demand for high quality, unusual design and up-to-date technology, BO needs to approach universe and creation uniquely. This is where Idealab enters into the picture. It is BOs hope that this new, innovative approach to product design, development, production and sales will be their keys to answer this dilemma.Marketing Strategy Segmentation, Targeting and placeSegmentationDemographicThis segmentation categorises market based on age, gender, family structure, income and favorable class, race and ethnicity and geography.BO customers can be divided into four categories.First form is of people who are young and well qualified, who have very few commitments, have large disposable income and are eager to fulfil their dreams.The near category is of younger people who have just started a family, notes is tighter and hence purchases are made only after careful consideration.The third cat egory is of the ones who have it all, children are grown-up, despite of some possible financial obligations, the family still has surplus income and are looking for luxuries as second homes, strange holidays or may be BO equipment.As per Jan Dalskov from Market Intelligence, most BO customers fall into this category.The last category, Grey gold, whose children have left home, have money to give the sack and can think of buying BO products for the sake of change or callable to the external influences. (Who are Bang Olufsen customers?, Beoworld, 2007)PsychographicUnlike other mass producers of electronics, BO makes a few select products for the clearly defined few. Its therefore broad appeal versus individual needs (Who are Bang Olufsen customers?, Beoworld, 2007).BehaviouralThis segmentation slices consumers on the basis of how they act towards, feel about or use a product (Solomon, Marshall, Stuart, Barnes, Mitchell, 220-21). BO products are often seen as Life-Style products. A s the guideword says, BO products are for those who discuss design and quality before price. (The history, Bang Olufsen, 2010)Targeting identify TargetingBO uses a differentiated targeting strategy. It focuses on design and quality over price. As a terminus of this they charge premium prices to customers to recover the higher excogitation and production costs. Differentiation is about justifying premium prices to prefer the product over other, less differentiated products. Due to this BO products are positioned as High Price = High Quality.PositioningBO products are very elegant in design to justify the higher price.PriceDesignBOSonySamsungBO products deliver best quality as compared other mass production electronics giants. As they describe It will never skip a beat. (BeoSound 2, Bang Olufsen, 2010)PriceQualityBOSonySamsungBO products are available in many of the luxurious 5-star hotels, high-end cars such as Aston Martin, Mercedes sodium lauryl sulphate AMG S-Class. As Cars ten Sander (Senior Director Scandinavia and Baltic) says that people normally have to resolve between taking a vacation to some exotic place abroad, renovating their homes, upgrading their car etc. or buying one or more BO products. (Hansen and Nielsen, 2008)PriceStatus SymbolBOSonySamsungDiscussion and ConclusionThe company, BO, looks very affectionate at their brand position and recognition. Higher prices, elegant designs, supreme quality and collaborations with the luxury brands have placed company products in a street corner market. Consumers are buying experience when buying BO products. Ownership of BO products creates a quality of belonging to certain social class.Company is successful in retentivity their brand image intact by delivering cutting-edge technology, high perform products. The company has strong and wide product mix, good length and information of the product lines.Currently company has a generally tendency to launch 2-3 products in a year. The company can work on stretching the product line in both ways by property the brand image intact. Stretching the product line downwards i.e. offering the products of lower costs may affect consumers perception of High price = High quality. Entering into the lower price market will result in increase in competition from electronic giants such as Sony, Samsung etc.If company can concentrate on filling the product line i.e. more variations in existing product lines then it will give the consumer to choose the best suitable and feasible product to their needs. epoch working on the product designing and manufacturing, company can also invest in promotions.Focussing on top executives of the corporate firms may help the company to approach the potential customers. They can promote some free demonstrations, introductory offers to these executives who are willing to burn out some cash in order to maintain their social status. Exploring and expanding in this new segment of the market will give company t he chance to reach to the potential customers.While exploring new B2C segments, company can also enter into B2B solutions by providing Audio Video solutions for the renowned conferences like Apples WWDC, Microsofts PDC etc. standardized to luxury yachts and cars, they can also reach Charter Jet manufacturers for collaboration, output the product mix.