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Arindam Chaudhuri, Editor-in-Chief, 4Ps B&M Editor-in-Chief
Arindam Chaudhuri
A.Sandeep Editor's Desk
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Is The Bose always Right?
Bose’s Products are Undoubtedly its most Powerful Sales Team. But should The Company continue to let them alone do most of The Talking?
Issue Date - 19/05/2011
It’s most ardent fans say that Bose is to audio systems what Microsoft is to operating systems, Intel is to microprocessor chips and Google is to search engines. The reasons stem from the company’s genesis itself, based on its founder Dr. Amar G. Bose’s (former professor at Massachusetts Institute of Technology) philosophy that “audio products exist to provide music for everyone, everywhere – music, not equipment, is the ultimate benefit.” His focus on user experience backed by top quality R&D ensured that Bose sound systems made their mark in most products that they have launched in the audio space.

With the Indian market for high-end products giving room for optimism across categories like apparel, cosmetics, home furnishings, cars, consumer electronics, et al, Bose has also been growing its presence at a brisk pace, and is well received by customers. But there is one aspect of the company’s growth that would keep marketing theorists aghast – their apparently high aversion to advertising and creating some sort of brand personality for Bose Systems.

Promotions are almost entirely restricted to the 33 retail points of presence it has established across major hubs in the country; including smaller towns like Pune, Jaipur and Ahmedabad. Here too, executives aren’t willing to talk much about the company and would only be happy telling you about products, as my personal experience suggests. Marketing has evolved from the school of thought that a great product just sells itself. Then why does a highly successful brand like Bose still follow the old school and rely on product brilliance, highly premium pricing, retail presence & word of mouth alone?

“(Consider how) a brand like Body Shop became a £2 billion brand without spending a shilling on advertising and entirely driven by word of mouth,” counters brand consultant Kiran Khalap. Of course, one advantage that comes out of this is the positioning of Bose as a very exclusive brand for a special set of people. For many years, Bose has been one of the world’s leading makers of speakers for home entertainment, automotive and pro-audio markets, and also manufactures a variety of consumer models for stereo systems and home theatres, including its compact Wave radio system. In fact, some aficionados are known to save for months, as the starting price of these speakers is around Rs.l lakh!

The company follows a ‘direct to customer’ approach; with no middlemen or resellers, by setting up exclusive stores for its products. But isn’t the company severely restricting itself by not investing in advertising? Bose officials refused to respond to 4Ps B&M, citing that being a private limited company, they do not divulge such information to media.

Particularly in the consumer durable segment, product features change quite frequently and regular communication is a must to keep customers in the loop. In Bose’s case, their approach towards acoustic technology is unique and their products are very atypical. To understand the true value of a Bose, you need to have a connoisseur’s sense of music. While those who do would never forget a brand, the others could well respond much better to advertising.

If you look at the quality and style conscious consumer segment, which are very few in numbers in India, Bose is able to appeal to this target audience. With the current marketing strategy, it cannot expect huge volumes. The frequency of advertising inputs needs to be re-looked at. The company could well use classy creatives, which not only appeal to the niche audience, but generate aspirational value among other segments too.

High decibel advertising is a given for mass brands, even when they are well established. Apple spent around $691 million, Mcdonalds spent more than $887 million and Coca Cola spent around $2.9 billion towards global advertising in 2010. According to Crispin Reed, Managing Director, Brandhouse, “If broad awareness is an important objective, then it is quite possible that above the line advertising is an important component of a marketing plan, assuming the return on investment is attractive.” Besides, mass markets are extremely competitive.

The question before niche brands like Bose relates to how much advertising works for them and how they can make it more targeted. Yet, it must be noted that the Indian luxury market is growing at a brisk pace and is expected to touch $30 billion by 2015 and account for nearly one fourth of the luxury market globally along with China by that year. Moreover, other brands in the consumer durable’s space like LG and Samsung are also moving up the value chain and definitely command much more consumer attention. Therefore, it is very important for luxury brands like Bose to also move towards mass advertising in some way to build their appeal; their premium positioning can do the rest. With the market poised for such growth, the company could certainly look at some intervention beyond product innovation. Bose is highly differentiated both as a corporate brand and as a product brand.

As a corporate brand, 100% of profits are apparently reinvested in the company’s growth and development. This is unique. As a product brand, it does not believe in explaining technical features of its headphones: it believes the human experience is the only arbiter of brand experience. This, too, is a unique stance. Even Steve Jobs does not hesitate from taking pot shots at competitors, though Apple’s differentiating abilities are well established.

In case product advertising seems daunting, the company could look at corporate branding instead, talking about the company’s history and values and even the beliefs of Dr. Bose. The rub off could be quite similar to the effect that iconic leaders like Narayana Murthy and Bill Gates have on their organisations. As we said, Bose’s technology is unrivalled, but a little marketing intervention wouldn’t hurt either, or would it?!

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