Study Case - Bose: Better Products through Research: Assume that you have been hired as a marketing consultant. Required

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Study Case - Bose: Better Products through
Research:
Assume that you have been hired as a marketing
consultant.
Required:
What are the recommendations that can be provided to
Bose to increase their profit and grow their sales?
What is the action plan of what needs to be done and
why?
What to measure, the measurement tool, the accuracy of
measurement needed?
What is a contingency plan - what to do if the plan
needs corrective action? What are the steps?
Reference:
(1) Reference: Kotler, P., Armstrong, G., & Opresnik, M. O.
(2017). Principles of Marketing. Harlow, England: Pearson Education
Limited. p278-280
The case study is provided below
" In a recent survey by brand strategy firm Lippincott, the most
trusted brand in consumer electronics was not Apple. Nor was it
Samsung, Sony, or Microsoft. It was Bose, the still relatively
small, privately held corporation that has been making innovative
audio devices for more than 50 years. Despite putting more than 30
million new sets of headphones alone on or in customers' ears last
year, Bose rang up only about $4 billion in revenues versus Apple's
$234 billion. But when it comes to the passion customers feel for
their brands, the Massachusetts-based technology company outshines
even Apple. Bose forges that deep consumer connection based on the
brand's design simplicity and brilliant functionality. Bose adheres
religiously to a set of values that have guided the company since
its origins. Most companies today focus heavily on building
revenues, profits, and stock prices. They try to outdo competitors
by differentiating product lines with features and attributes that
other companies don't have. Although Bose doesn't ignore such
factors, its competitive advantage is rooted in its unique
corporate philosophy. "We are not in it strictly to make money,"
says CEO Bob Maresca. Given the company's focus on research and
product innovation, he points out that "the business is almost a
secondary consideration." The Bose Philosophy To understand Bose
the company, you must first look at Bose the man. In the 1950s,
founder Amar Bose was working on his third degree at the
Massachusetts Institute of Technology. He had a keen interest in
research and studied various areas of electrical engineering. He
also had a strong interest in music. When he purchased his first
hi-fi system—a model that he believed had the best
specifications—he was disappointed in the system's ability to
reproduce realistic sound. So he began heavily researching the
problem to find his own solution. Thus began a stream of research
that would ultimately lead to the founding of the Bose Corporation
in 1964. It also led to the development of the long-standing Bose
slogan "Better Sound through Research." From those early days, Amar
Bose worked around certain core principles that have guided the
philosophy of the company. In conducting his first research on
speakers and sound, he did something that has since been repeated
time and time again at Bose. He ignored existing technologies and
started entirely from scratch, something not common in product
development strategies. In another departure from typical corporate
strategies, Amar Bose put all of the privately held company's
profits research and development, a practice that reflected his
avid love of research and his drive to produce the highest quality
products. In doing so, he also bypassed the process of figuring out
what customers wanted, instead of keeping his research confined to
the laboratory and centred on the technical specifications of
creating a superior product. Today, this approach is considered
heresy in the innovation world. Amar pursued this approach because
he could. He often pointed out that publicly held companies have
long lists of constraints that don't apply to privately held
companies, noting that "if I worked for another company, I would
have been fired a long time ago," For this reason, Bose always
vowed that he would never take the company public. "Going public
for me would have been the equivalent of losing the company. My
real interest is research—that's the excitement—and I wouldn't have
been able to do long-term projects with Wall Street breathing down
my neck." Innovating the Bose Way The company that started so
humbly now has a breadth of product lines beyond its core home
audio line. Additional lines target a variety of applications that
captured Amar Bose's creative attention over the years, including
military, automotive, home building/remodelling, aviation, and
professional and commercial sound systems. It even has a division
that markets testing equipment to research institutions,
universities, medical device companies, and engineering companies
worldwide. The following are just a few of the products that
illustrate the innovative breakthroughs produced by the company.
Speakers. Bose's first product was a speaker introduced in 1965.
Expecting to sell $1 million worth of speakers that the first year,
Bose made 60 but sold only 40. The original Bose speaker evolved
into the 901 Direct/Reflecting speaker system launched in 1968.
That speaker system was designed around the concept that live sound
reaches the human ear via direct as well as reflected channels (off
walls, ceilings, and other objects). The speakers featured a
completely unorthodox configuration. Shaped like one-eighth of a
sphere and mounted facing into a room's corner, the audio waves
reflected off the walls and filled the room with sound that seemed
to be everywhere but some from nowhere in particular. The speakers
had no woofers or tweeters, composed instead of eight
four-and-a-half-inches mid-range drivers. The speakers were also
very small compared with the high-end speakers of the day. The
design came much closer to the essence and emotional impact of live
music than anything else on the market and won immediate industry
acclaim. The reflective approach, although groundbreaking at the
time, is commonly found in home theatre systems throughout the
industry today. Back then, however, Bose had a hard time convincing
customers of the merits of these innovative speakers. At a time
when woofers, tweeters, and size meant everything, the 901 series
initially flopped. In 1968, a retail salesperson explained to Amar
Bose why the speakers weren't selling: "Look, I love your speaker
but I cannot sell it because it makes me lose all my credibility as
a salesman. I can't explain to anyone why the 901 doesn't have any
woofers or tweeters. A man came in and saw a small size, and he
started looking in the drawers for the speaker cabinets. I walked
over to him, and he said, 'Where are you hiding the woofer?' I said
to him, 'There is no woofer.' So he said, 'You're a liar,' and he
walked out." To resolve this credibility problem, Bose developed
another core competency—identifying and targeting the right
customer with the products it was confident were superior to even
the best offerings. For Bose, this has generally meant targeting
higher-income customers who aren't audio buffs but want a good
product and are willing to pay a premium price for it. For the 901,
this included using innovative display and demonstration tactics.
This approach has served Bose well. Although even today hardcore
audiophiles scoff at Bose products as little more than smoke and
mirrors, customers whose expectations haven't been shaped by
preconceived specifications perceive Bose products to be
exceptional. So far as the 901 is concerned, the product became so
successful that Amar Bose was known for crediting the speaker
series with building the company. The list of major speaker
innovations at Bose is a long one. In the 1970s, the company
introduced concert-like sound in the bookshelf-size 301
Direct/Reflecting speaker system. Fourteen years of research led to
the development of acoustic waveguide speaker technology, a
technology today found in the award-winning Wave radio, Wave music
system, and Acoustic Wave music system. In the 1980s, the company
again changed conventional thinking about the relationship between
speaker size and sound. The Acoustimass system enabled palm-size
speakers to produce audio quality equivalent to that of high-end
systems many times their size—a design so popular it also remains
in the current Bose portfolio of speakers. Recently, Bose again
introduced the state of the art with the Music Monitor, a pair of
compact computer speakers that rival the sound of three-piece
subwoofer systems. And Bose has led the way in developing wireless
speaker systems, a move that was quickly followed by all
competitors. Not only was each of these speaker systems
groundbreaking at the time it was introduced, but each was also so
technologically advanced that Bose still sells it today, even the
original 901 series. Headphones. Maresca recalls that "Bose
invested tens of millions of dollars over 19 years developing
headset technology before making a profit. Now, headsets are a
major part of the business." Initially, Bose focused on noise
reduction technologies to make headphones for pilots that would
block out the high levels of noise interference generated by
aircraft. Bose headphones didn't just muffle noise; they
electronically cancelled ambient noise so that pilots wearing them
heard nothing but the intended sound coming through the phones.
Bose quickly discovered that airline passengers could benefit as
much as pilots from its headphone technology. Today, the Bose Quiet
Comfort series, used in a variety of consumer applications, sets
the benchmark in noise-cancelling headphones. One journalist
considers this product to be so significant that it made his list
of "101 gadgets that changed the world"—right up there with
aspirin, paper, and the lightbulb. Automotive suspensions Since
1980, the inquisitively innovative culture at Bose has even led the
company down the path of developing automotive suspensions. Amar
Bose's interest in suspensions dates back to the 1950s when he
bought both a Citroen and a Pontiac, each riding on unconventional
air suspension systems. Thereafter, he was obsessed with the
engineering challenge of achieving good cornering capabilities
without sacrificing a smooth ride. The system Bose developed was
based on electromagnetic motors installed at each wheel. Based on
inputs from road sensing monitors, the motor could retract and
extend almost instantaneously. For a bump in the road, the
suspension reacted by "jumping" over it. For a pothole, the
suspension allowed the wheel to extend downward, retracting it
quickly enough that the pothole wouldn't be felt by passengers. In
addition to these comfort-producing capabilities, the wheel motors
were designed to keep a car completely level during an aggressive
maneuver such as cornering or stopping. The system achieved Amar
Bose's vision to provide better handling than any sports car while
simultaneously giving vehicle occupants the most comfortable ride
imaginable. Bose invested more than $100 million over 30 years in
the groundbreaking suspension. In the end, the system was simply
too heavy and too expensive for use in passenger cars. Rather than
shelf the product, however, Bose did what it has often done—it
found a market where the technology could be used to provide
genuine customer value. The company now markets a smaller, lighter
version of the Bose suspension as the Bose Ride seat system for
heavy-duty trucks. Surpassing current air ride and other
conventional technologies in performance, its $6,000 price tag also
exceeded the going price of a truck seat by five to ten times.
Although most companies and drivers were skeptical at first, one
Texas driver's reaction drives home the value of this product, even
at the substantial price premium: "I had back pains. I used to feel
every bump in my back and neck. The truck still bounces down the
road, but I don't. It's almost like floating, detached from the
truck." Bose's commitment to research and development has produced
state-of-the-art products that have contributed to the trust that
Bose customers have in the company. Customers know that the company
cares more about their interests—about making the best products
than about maximizing profits. But for a company not driven by the
bottom line, Bose does just fine in that department as well. In the
personal headphone market, Bose is second only to Beats (Apple)
with 11 percent of the market. And with wireless speakers now
dominating speaker sales, Bose leads with a decisive 22 percent
share, a full six points ahead of number-two Sonos. Amar Bose
passed away a few years ago at the age of 83. With the passion of a
genuine scientist, he worked every day well into his 80s. "He's got
more energy than an 18-year-old," Maresca once said. "Every one of
the naysayers only strengthens his resolve." This work ethic
illustrates the passion of the man who shaped one of today's most
innovative and most trusted companies. His philosophies have
produced Bose's long list of groundbreaking innovations. Even
today, the company continues to achieve success by following
another one of Amar Bose's basic philosophies: "The potential size
of the market? We really have no idea. We just know that we have a
technology that's so different and so much better than many people
will want it."(1)