Disclaimer: This is an example of a student written essay.
Click here for sample essays written by our professional writers.

Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com.

Bang And Olufsen Sound Of The Future Marketing Essay

Paper Type: Free Essay Subject: Marketing
Wordcount: 3743 words Published: 1st Jan 2015

Reference this

Europe is currently experiencing a recession, which has had a significant effect, with some countries being close to default, and with some to starting question their common monetary policy and their cooperation in the EU. This has created uncertainty amongst people, which has slowed down consumption, due to the fact that people are fearful of losing their job. Bang & Olufsen, from now on B&O, has felt the effects of the recession, but with their new strategy; “Leaner, Faster and Stronger”, B&O aims to regain their former position (Annual Report 11/12). In this essay, an analyse of B&O’s marketing environment, and afterwards I will evaluate factors in the marketing mix, that have contributed to their superior performance, and which factors that are crucial for B&O’s long-term success. The scope of this paper will be the European market, because it is B&O’s largest market and have a considerable impact on their overall performance (Ibid.). In will be concluded, that B&O will be able to attain long-term future success with a continuous differentiated product strategy and product focus, and thus B&O will be able to overcome the difficulties in the current marketing environment.

Get Help With Your Essay

If you need assistance with writing your essay, our professional essay writing service is here to help!

Essay Writing Service


B&O has been chosen for this paper, because they have very distinct competitive position in the market of consumer electronics. They differentiate from their competitors with their high-end products with luxurious design, and superior sound quality. Even under the current recession, B&O’s financial performance has improved, but their superior performance is assigned to other metrics (Annual Report 11/12). Another metric is their brand recognition, which has given B&O a brand and is considered one of the strongest in the world (TCBA [1] , 2012), and with their strategic position in the market and a trimmed organisation, B&O been able achieve superior performance.


Kotler et al. (2012) defines the marketing environment as “an environment there that includes various different actors and external forces that affect the company and its ability to serve and build successful relationships with customers”.


To analyse the macroenvironment the PEST-analysis will be applied, which consist of four factors, Political, Economic, Socio-Cultural and Technological.


In general, the political environment of Denmark is very stable for B&O and their concerns are directed toward the instability of the EU due to the economic situation in members’ states. B&O is based in Denmark, which is part of the EU, meaning that B&O is dependent on both Danish and EU regulation. As a member of the EU, the country is subject to common technological restrictions (EU, 2012), which most likely minimize the chance of a quick change in regulations. Being subject to EU regulations also reduces the chance of trade barriers and protectionism, since these will be acts of violation of the EU-treaty (EU, 2010). On a national level, Denmark is currently under a new government, which has increased the tax level to be highest in the OECD, 48.2 % of GDP (Hansen, 2012), and this has led to an increase in company tax, which will reduce companies’ international competiveness.


The economy’s well-being and expectations of the economy are crucial for a company’s ability to attract customers and improve their performance. But in early 2012, Europe experienced the credit crisis and debt crisis, which both extended to the current recession in Europe. The different political institutions in EU have tried to minimise the effects of the recession, by lowering the interest rate at which companies can borrow, as seen in Figure 1 [2] to encourage companies to invest. This has however not had the intended effect. Because companies still have problems borrowing for their investments, they have been forced to cut cost in their business’s, which means people have been let go.

The recession has increased unemployment to 11.6 % in September 2012 from 10.3 % in August 2012 in the euro area (Allen, 2012), which has created uncertainty amongst people, and led to a behaviour where people are less likely to purchase high-end consumer electronics or luxury goods. When more people are unemployed, it creates a fall in the average disposable income, which has a causal relationship with reduced buying power. This has a continuous negative effect on consumption and spending by consumers, which will cause sales to decrease, because of the lack of certainty.


The demographics variables, which have been included in the analysis are birth rates, age groups and their income distribution, as these are major factors in the determination of future demand. These are used as proxies for the determination of the general demand for goods, because they set a solid groundwork for consumer behaviour, their preferences and a future market. In Figure 2 [3] , we can see the number of births from 1961-2011, which shows a downward sloping trend of births. The people, who were born in the mid-1900’s, are starting to leave the job market and enter into retirement. This change of one of the largest generations, moving from one stage to another, will create a significantly pressure on countries governments, but also on the company’s product portfolio, that earlier was focused on a younger generations (Lanzieri, 2011).

The downward sloping trend of the birth rates helps to illustrate the decrease of the total population in the Euro area, which is strong evidence for a smaller market in the future. In the meanwhile, the euro area is facing a growing aging population, because of higher life expectancy among the elderly (Lanzieri, 2011). This indicates a trend for a different market being formed in the future, where the elders are a dominant consumer group. Figure 3 [4] shows the average consumption expenditure, which outlines that there is an increase of expenditure through the mid-life of people, whereafter it decreases again. There can be multiple factors that affect the increase in mid-life expenditure, but according to Radermacher (2012), a major factor is children leaving their home, which creates an increase for the parent’s disposable income.

The differences are great among consumers’ preferences and their purchasing power in the EU, but a common denominator for demand of high-end and luxury products in general is an above average disposable income for these people. Engel’s Law states, that if you experience an increase in your income, your consumptions pattern will change from inferior goods and move to luxurious goods (Kotler et al., 2008). Figure 3 shows groups that have experienced an above average increase in their income and these groups might change their consumption patterns to more luxurious products.


The speed of technology is moving faster each day, and the market for consumer electronics is no different. To follow this fast development it would require a great effort in R&D combined with a great capital stock to keep up with the leaders in the market. In a market as innovative and fast paced as consumer electronics, the market leaders want their technology to be the market standard, which means that speed of product development is crucial for a products life expectancy. The market leaders sets the marked standard in the market, which means smaller companies follow this direction of technology (PwC, 2012). However, a technology follower can reduce the R&D costs, because the follower merely use the newest technology development from the market leaders (i.e. Samsung, Sony). Since there are a vast number of market leaders in consumer electronic, the prices of new technology tend to be lower, because these also compete to supply smaller companies (Ibid.).


The microenvironment is defined by Kotler et al. (2012), and consists of several actors that are close to the company and affect its ability to serve its customers. ‘Publics’ in the microenvironment will not be part of analysis, because it is irrelevant in this context.


The company, B&O has a history and proud traditions in making televisions and audio products of the highest quality. B&O became known for their exclusive design and high quality of sound (Annual Report 11/12), which helped them build a strong brand and image in the mind of the consumers. Inside the company, B&O has experienced quite some changes in top management with three different CEO’s over the past five years (Ritzau, 2012), which can indicate B&O’s marketing concept does not apply for the company (Kotler, 2008), and can have lost their direction as a company. Even with the turmoil in the top management, B&O still possess core competencies, which according to Kotler et al. (2009) have three distinct characteristics; first of all, it must be a source of competitive advantage that contributes to perceived benefits for the consumer. Secondly, they can be applied to many different markets and lastly, they must be difficult to imitate for competitors. B&O core competencies are sound, acoustic, design and concept development, which makes B&O’s customers willing to pay extra for the product, since it is deemed to be of high quality. This can indicate the product concept applies to B&O (Kotler, 2008). The core competencies can be applied to the markets ranging from TV to the automotive industry, to the laptop market. All these activities are made in-house of B&O and, therefore their competitor have difficulty imitating them (Annual Report 11/12). These core competencies mean, that B&O have a powerful brand and well-respected image among their current customers. B&O have also attained a strategic position, as a niche in the market for TV and audio by differentiating their offerings (Porter, 1980).


Given B&O’s product strategy, which focuses on design and sound in general, rather than being a first-mover in technology, B&O is a technology follower, who just follows the trends of the market in technology, from LED to OLED. This also means that B&O is dependent on their suppliers, and actually, B&O has more than 200 suppliers of different component (B&O Fortegningsretemission, 2009), e.g. Samsung is supplying B&O with cathodes for their televisions. Being a technology follower provides both strengths and weaknesses. A strength can be reduced R&D costs for B&O, which can allocated to other departments. A weakness could be that it makes B&O too dependent on their suppliers R&D development in technology (Annual Report, 11/12).


B&O operates on both Business-to-Consumer and Business-to-Business. In the B2C market, B&O operates more than 900 dedicated B&O retail stores, called B-1, which only sells B&O products with special educated personnel providing customers with service and information. B&O also have 244 shops-in-shops, where the concept is the same with a designated and educated seller. B&O only choses external retailer that match their concept and B&O require a specific area of the store to be dedicated only to their products (Ibid.).


B&O is a “small player” in the market for consumer electronics compared with the magnitude of their competitors like Sony, Samsung etc. in terms of resources and capital. The market for consumer electronics is characterized by a high competitive intensity among the existing providers. It is a combination of many manufacturers, with high fixed cost, moderate market growth and constant technology development (PwC, 2012). As mentioned earlier, B&O is a technology follower, which means that they do not compete on technology, but instead compete on parameters such as sound, design and quality. B&O has created a place for their offerings with a focused differentiated strategy (Porter, 1980), which creates a strategic advantage by positioning the offerings as an exclusive high-end product for a specific segment in the market. The competitors mainly focus on broad target group, while trying to keep costs low with economies of scale in the production like Sony and Samsung, who offer cheaper substitutes to B&O’s offerings.


Overall B&O operates on B2C and B2B markets. In the B2C market, they sell through self-owned retail stores and specific resellers, where both channels have educated and certain sellers, who only sells B&O products (Annual Report 11/12). The customers of B&O are a specific segment of people that are well educated, with a high income, and range from the mid-life to being elder. Among these current B&O customers, the brand is well known and regarded as an exclusive brand, but B&O have lost the younger generations to their competitors.


To create an overview of the marketing environments’ impact on B&O, a SWOT-model is used to illustrate, which internal strengths and weaknesses B&O has, and at the same time show which external factors they are exposed to. This is an overview of the most important factors for B&O in the micro- and macroenvironment.



Brand and image


Loyal customers

Differentiation strategy (Focus)


Technology follower



Changing demographic

New markets


Now B&O’s marketing mix can be evaluated, with the knowledge of the SWOT-analysis and the analysis of the marketing environment. This will help develop an understanding of how these parameters have contributed to their superior performance.

Product: B&O markets a wide range of high-end quality multimedia, audio and video products. All the products are consistent in their exclusive design and quality, whilst at the same time, remaining highly functional. With their products B&O, differentiates itself from the competitors in the market for consumer electronics, because their products are aimed at a narrow target group with a high degree of differentiation. With the purchase of a B&O product, you are not just purchasing another TV or audio product, but a piece of art (Annual Report 11/12).

Find Out How UKEssays.com Can Help You!

Our academic experts are ready and waiting to assist with any writing project you may have. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs.

View our services

Price: Given B&O’s exclusive products, and given that they have differentiation as the product strategy, they charge a higher price than their competitors do, because the price represent a higher product quality and B&O’s superior brand. The price level also attracts a certain group, who wants to pay a premium for a differentiated product. Lastly, the price also indicates a high level of performance and durability in every aspect (Ibid.).

Promotion: B&O produces products that are aimed at an exclusive target group, which means that B&O promotion regards only this group of customers. B&O also attempt to engage their customers in personal experience when buying a product from B&O, because the environment around the products is different and exclusive, with a dedicated and educated salesperson. Whenever, B&O is doing promotion with others entities, whether it is another product or a person they keep it aligned with their concept (Ibid.).

Place: B&O have their own private retail stores, where only their products are sold. These stores are normally located in areas, which are exclusive and related to higher standards, so B&O is selective in their market coverage. In the stores the personnel is well educated in the products of B&O and the newest trend of technology, which can help the customer meet his needs. Customers are able to make appointments online for a personal presentation, which includes after normal work hours (Ibid.).


From the evaluation of B&O’s marketing mix, it can be determined which factors that are crucial for B&O long-term success. The concept of ‘Critical Success Factors’ is applied, and this describes the strengths and weaknesses that most critically affect an organisation’s future success. They are measured relative to competitors (Daniel, 1961).

B&O have two overall critical success factors relative to their competitors. First, B&O have a product strategy, which is differentiation focus which secures them a strategic position in the market of consumer electronics, as a niche. With this product strategy, B&O have attained a strong brand, which create an awareness of them with their customers, because their products are unique and differentiated from the competitors’. Secondly, their products are designed with exclusive touch and made of materials of the highest quality, but remain functional for usage. B&O only uses fully tested technologies in the market, which means that their standard of products, are consistently high. The design and consistency of high standards have given B&O a strong brand, which labels them as being innovative and different from their competitors.


In this paper, an analysis was performed of B&Os marketing environment, and afterwards their marketing mix was evaluated. This helped show what has contributed to B&O’s superior performance and which factors in the marketing mix are crucial for their long-term success. The focus of this paper was the European market, since it is still B&O’s largest market. B&O is exposed to a recession, which has led to a change in the consumption patterns of customers. Furthermore, the demographic composition of Europe is radically changing, where the elderly are becoming an increasingly dominant factor. In the microenvironment, B&O is challenged by being a small player amongst giants in the market, but B&O have managed to differentiate themselves from their competitors with their exclusive products aimed at a narrow target group, which is to say, that they have created a niche in the market. In B&O’s marketing mix, their product strategy is the most crucial and is embedded throughout the whole organisation, from concept development to sales. The product strategy and the products themselves are crucial success factor for B&O, and will make B&O able to attain superior performance and success in the future.

7. References

Adams, S. (2012) PwC: Consumer electronics – Market analysis, [Online]. (URL http://www.pwc.com/gx/en/technology/scorecard/consumer-electronics.jhtml), (Accessed 04/11/2012)

Allen, T. (2012) Euro area unemployment rate at 11.6 % [Online] (URL: http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/3-31102012-BP/EN/3-31102012-BP-EN.PDF), Eurostat, (Accessed 04/11/2012)

Andersen, O. and Mantoni, T. (2012) Annual Report 2011/12, Struer: Bang & Olufsen Group

Bang & Olufsen, (2009) B&O Fortegningsretsemission, [Online] (URL: http://www.bang-olufsen.dk/investors/company-announcements/~/media/838B0941FDFF4885B4C01C04BD12E0C0.pdf) (Accessed on 04/11/2012)

Daniel, D. R., (1961) “Management Information Crisis,” Harvard Business Review

European Union (EU), (2010) Consolidated Treaties: Charter of fundamental rights, [Online], (URL: http://europa.eu/pol/pdf/qc3209190enc_002.pdf#nameddest=article179)

European Union (EU), (2012) European Journal of Law and Technology (EJLT), [Online], (URL: http://ejlt.org/) (Accessed 5/11/2012)

Eurostat – Statistic Database for the European Union (2012)

Hansen, H. L., (2012) Danmark har OECD’s Højeste Skattetryk – Sammenligning af skattetryk mellem OECD-lande. [Online]. (URL: http://www.cepos.dk/publikationer/analyser-notater/analysesingle/artikel/danmark-har-oecds-hoejeste-skattetryk-sammenligning-af-skattetryk-mellem-lande/). (Accessed 04/11/2012)

Humphrey, A. (2005). “SWOT Analysis for Management Consulting”. SRI Alumni Newsletter

Kotler, P., Armstrong, G., Wong, V. and Saunders, J. (2008) Principles of Marketing, 5th ed. Harlow: Prentice Hall

Kotler, P., Brady M., Goodman, M. and Hansen, T. (2009) Marketing Management, 1st ed. Harlow: Prentice Hall

Kotler, P., Armstrong, G., Harris, L. C., Piercy, N. F. (2012) Principles of Marketing, 6th ed. Harlow: Prentice Hall

Lanzieri, G. (2011) Population and social conditions, [Online], (URL: http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-11-023/EN/KS-SF-11-023-EN.PDF), Eurostat, (Assessed 04/11/2012)

Porter, M.E., “Competitive Strategy: Techniques for analyzing industries and competitors” New York: The Free Press (1980)

Radermacher, W. (2012) Eurostat regional yearbook 2012, Belgium: Publications Office of the European Union.

Ritzau, (2012), B&O-analytiker: Tue Mantoni leverer varen, Børsen [Online], (URL: http://borsen.dk/nyheder/virksomheder/artikel/1/238783/b_o-analytiker_tue_mantoni_leverer_varen.html) (Accessed 5/11/2012)

The Centre for Brand Analysis (2012) CoolBrands 12/13, London: CoolBrands, [Online]. (URL: http://s3.coolbrands.uk.com/files/2012/09/CB012-13-Official-Results-tAKy0N.pdf) (Accessed 04/11/2012)


Cite This Work

To export a reference to this article please select a referencing stye below:

Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.

Related Services

View all

DMCA / Removal Request

If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: