Segmentation, Targeting and Positioning Strategy of Bose Headphones

2869 words (11 pages) Essay

8th Feb 2020 Business Strategy Reference this

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Introduction

The STP model which are segmentation, targeting and positioning is a useful strategic approach in our marketing and it helps marketers to priorities unique selling proposition and then present characteristic messages to commercially appealing more customers (Annmarie, 2018). Therefore, the STP model can be easily applied into the company, Bose, founded in 1964, famous of its home audio system, speakers and noise cancelling headphones etc. Bose noise cancelling headphones generally is used by consumer, aviation and military. According to Bose, the company applied their noise cancellation technology is to protect the hearing of pilots and eliminate the engine noise effectively. The essay will focus on the understanding of the targeting strategy used by Bose in the noise cancelling headphones’ market of the range of product offerings and then identify the segmentation variables and product positioning strategy. Finally, the perceptual map will be covered which helps marketing analyst understand where consumers rank their product with relation to product characteristics in comparison to other competing products.

Targeting strategy

Targeting strategy is a strategy which aim to target audience the company can sell the product to. A good targeting strategy helps the organisation to be focused on the product selling, pricing strategy, brand loyalty and customer loyalty. Basically, targeting strategy can be divided into three main types of strategies which are undifferentiated, differentiated and concentrated strategy. In this case, Bose QC noise cancelling headphones are designed to attract different age, gender, race income and also education level. Thus, Bose can occupy a market which is “less congested” with undifferentiated strategy. The business targets of mass marketing are the whole market which is more focus on what buyers wants, needs and demands. By indicating the direction in the preference space that is best-liked overall. Morris B and Douglas V (1984) suggested that possible strategies for programming one offering is aimed at the mass market. Hitesh (2019) examined that Bose company has a low-profile adverting policy in comparison with the other competitors such as Beats. The main marketing strategy of Bose company is to sell the product directly to consumers other than to middleman or reseller (Hitesh, 2019). However, as a marketing analyst, advertising is one of the important techniques in modern marketing and it acquired a “great significant” in economy (Chandra, 2010). According to Elliot (2014), the selection of marketing strategy “compromise between the necessity to respond to the particular desires of potential customers”, and the goal is to achieve a lowest of marketing and production. Therefore, the objective of Bose is to focus on advertising and create products that can combine high technology with a small size, and a better sound system. Trying to make the product more simplicity and accessible to all consumers. Bose, in-ear quiet comfort 20 Acoustic Noise cancelling headphones of Android devices has 3 pairs of Stay Hear +tips, clothing clip, rechargeable lithium-ion battery, USB charging cable and a carrying case in box (Bose, 2019). For the additional details of the rechargeable lithium-ion battery, there is only 2 hours charging time and can use for 16 hours per full charge (Bose, 2019).

Targeting market and segmentation variables

A target market is to determine a specific group of people and narrowing the customers thinking, needs and wants to a target group (Elliot, 2014). The target market of Bose QC noise cancelling headphones can be segmented based on demographic variable such as age, gender and income. Pride & Ferrell (2011) indicates that a market segment profile explains the difference between individuals and organisations and represents the similarities among potential customers. The profile for Bose target market is for young adult to middle-aged business Australian and on the middle or upper class that have reasonable disposable earns and willing to buy a noise cancelling headphone in order to have a quiet space and away from the noise environment. Elliott (2018) state that market segmentation involves examining the variables in meaningful market segments and creating profiles of the market segments Moreover, Market segmentation divided the market of potential customers into different set of groups and each segment has certain characteristics (Arieez, 2018). In some other ways, market segmentation is essentially a “merchandising strategy” and it is used to adjust the market offerings of consumers and user requirements (Smith, 1956). In Bose, the behaviouristic segmentation applies to those people who are labelled as a good brand loyalty and benefit expectations (Arieez, 2018). For instance, for the current users who already know well about the product, they can also be labelled according to their usage. So, some users may use the product everyday and others will be weekly or monthly. Bose also focus on psychographic variables such as personality, lifestyle, especially for officer worker, business man and college students who want to enjoy a quiet and personal space in the airplane, subway, train, bus and other environment (Hitesh, 2019). The geographic are segmentation of Bose are targeting all of Australian and not any specific region or location.

Product positioning

Wang (2015) claimed that product positioning become one of the important business strategies to “enhance customer retention, customer acquisition and customer satisfaction” in a competitive environment. Palmatier and Sridhar (2017) claim that product positioning “entails changing both the actual offering and the perceived offering” that determine product features, benefits, price, quality, brand reputation and competitors. In 1978, Bose used a headphone in the plane, and he realized that he could not enjoy the music because of the high-volume noise of plane. After that, Bose starts the famous project “noise cancelling headphones”. Then, Bose headphones becomes more and more popular because of the “noise cancelling” and also a start of Bose technology the noise cancelling product. Cansu (2014) indicates that Bose compromise with three main elements which are “consistency, style and branding”. Bose believed their high quality and define their brands with “a brand one can trust” (Cansu, 2014). Bose provide a noise cancelling feature, the QueitComfort 20 lets the customer focus more on their music by reducing ambient sound distraction. Also, the Bose noise cancelling earphones feature an “Aware” mode, so that you can know what is happening around you. Moreover, the logo of Bose has its own type face and makes customer to have a quicker brand recognition (Cansu, 2014). The well-known manufactures of Noise-Cancelling headphone competitors are Audio-Technica, Beats, Sony, Sennheiser, Harman Kardon, Philips and Monster. Even Bose has high brand reputation of their headphone quality but the price of noise cancelling headphone is $369 which is pretty high for middle level class. In conclusion, Bose headphones have one of the best noise cancelling feature to compare with the other headphone company like Beats and Sony, but the price is also more expensive than the other companies.

Perceptual mapping

Modern marketing realized that customer loyalty has a powerful influence on organisation’s performance (Vlachos, Krepapa, et al., 2013 as cited in Agustin and Singh, 2005). Another criterion is responsibility, for instance, acting a good social responsible manner shows the company is being “profitable, obeying law, being ethical and pursuing philanthropic responsibilities” which effects in the respect of human, community and environment (Bose research, 2010). Nowadays, more and more companies have incorporating their social responsibility into their marketing strategy (Chris, 2018). Having a social responsibility policy may impact the buying decisions of customers and some customers may willing to pay more as they know a portion of profit will be worthy cause (Chris, 2018). Bose has a sustainability program which manages the social, environmental and economic responsibilities and trying to accomplish the environmental goal that create value for the consumers (Bose corporation, 2019). To consumer, the product of Bose has been highly valued in the market place as their high performances and good brand equity and brand loyalty. And Bose will be continuing to provide high-quality products. Bose is one of the in-demand audio equipment and is best known for its noise cancelling headphones, so the brand loyalty should be high. Amin (2019) claimed that Sennheiser is being labelled as overrater because of the celebrity’s endorsement and they are spotted using it. Then, the brand loyalty should be lower than Bose. The company of Sony is probably one of the popular brands and the product portfolio raging from as lows as $10 to as high as $1,000 in global earphones market which means Sony are targeting to everyone because of the cheap price and fair sound quality (Steph, 2018). Philips is also a well-known brand and it is specializing in producing high quality product with inexpensive price.

In conclusion, Bose, as one of the most prominent sound system brands in global by taking unique strategies to reach the demand of the consumer. Bose is focusing on premium brand reputation and gather the customer loyalty to let people known other than Beats by using high-profile endorsements. By using undifferentiated strategy, it is easier for Bose to know what the consumer needs and wants. For segmentation, Bose applied into three variables which are geographic, demographic and behaviouristic which is easier for the organization to determine the characteristics of individual and groups. Bose targeting to young adult to middle-aged business Australian who is on the middle or upper class. And have reasonable disposable incomes to buy a noise cancelling headphones to let them keep away from noise environment and enjoy their quiet personal space. Product positioning is the changing in actual offering in product features, price and quality. At the end, perceptual mapping provides 3 top well-known competitors of Bose which are Sennheiser, Sony and Philips.

Appendix

Appendix A: https://skemaheadphonebrandsaudit.wordpress.com/beats-vs-bose/bose/

Appendix B: https://www.harveynorman.com.au/bose-quietcomfort-20-noise-cancelling-in-ear-headphones-for-samsung-and-android-devices-black.html

Appendix C: http://www.boseresearch.com/html/bose-research-social-responsibility.html

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