Bang & Olufsen Ba Exam Essay

2588 Words May 16th, 2013 11 Pages
Bang & Olufsen was founded in Struer in 1925 by Peter Bang and Svend Olufsen. They are one of the leading providers in the market of high-end sound systems, operating in the electronic industry in both the Danish and the International Market.
Bang & Olufsen designs, develop and market a wide range of luxury audio/video products, including music systems, loudspeakers, television sets and multimedia products that combine new technology with Danish stylish design. In recent years Bang & Olufsen have experienced a huge decrease, in sales with repeated deficit. (B&O Annual report 11/12 (AP) p 8). In 2011, t o turn their deficit into profit, Bang & Olufsen launched a new five years strategy plan, “Leaner,
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They value design and high performance and they are a part of the iPhone generation”. (Mantoni, Interview, Youtube 2012)
In order to define the new target group we have used both demographic and psychographic segments through hybrid segmentation to find a new segment for the Beoplay product line. (Schiffmann 2008, p. 57) We have identified the new segment as being young people between 25-35, well educated and with a stable income. Their motivation is often to stand out from the crowd in order to become less mainstream, they are a part of generation Y. They grew up with economical boom flowing the crisis in the late 1980 and a high technological development. They know what they want and when they want it. They focus on brand awareness and what the trend is before a purchase. B&O are aware of this and accordingly they have made a distribution agreement with one of the most popular brands in the world, Apple. B&O PLAY products can be bought in Apple online and retail stores all around the world (AP p. 16).
With Beoplay range they have lowered the price point within the product line to adapt to the segment. (Jørgensen, 2012) Young people between 25-35 generally have a lower disposable income (Danmarks statistik, 2012), therefore it is logical for B&O to lower the prices, to meet their needs and expand to a wider target group.

Competitive analysis
To analyse the nature of competition and rivalry among

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