What High End Manufacturers Could Learn From Bose

interesting thread--reminds me of the case study i worked on Chivas Regal (the worst scotch around). Chivas was a marginal player in the low dollar blended scotch mkt, and meer fodder for jokes amongst single-malt scotch conniseurs..but then chivas did 2 things: new box / packaging, and raised their price. results go against economic theory (sales increased!), but testify as to the effect of a good marketing program.

this has a lot in common with audio. high end audio is the equivalent to the scotch conniseur--who knows what regions were known to produce good scotch, what labels / years to watch for, etc. point being, they're very educated about product, and as such have no problem paying $80 for a liter if they think its amongst the best. of all the people who own stereos, how many are very educated about product? only those on this board.

audio has a couple serious problems, financial aspects aside. in order to compete w/ mass mkt product, they have to educate the public as to how much better it can get. and to do so requires retail outlets for demonstrations (and we all know the difficulties for the highend retailer these days).

couple that with these factors: bose recognizes 3 things in serving the market: 1) product must have aura of high-end (face it, most people think its the best!), 2) product must be at a price point that is still discretionary, and 3) product must be small (i.e. households buy furniture, and when speakers are not in use, they're furniture---best to keep em small guys else the wives don't like it).

so what is one to do? madrigal has a good starting point w/ the multi-dimensional line (levinson in lexus), and would be well served to purchase the gallo speaker technology and begin w/ a new brand...

the rest of high end will always be a cult.

rhyno

very enjoyable thread...the comment about the porsche deserves response.

yes, its a typical strategy to have a high price product as the intro to get snob appeal and status in the mkt (ala mercedes--used to start at $70k, now down to $30k), and then introduce lower price product that has substantially higher volume. some audio mfgs do this...not many though.

why?

it is my sincere belief that the high end audio industry is an anomaly..what you have are a lot of hobbyists who are DIYers and ultimately tweak enough until they decide to start a company where there product is their best effort--and they're concerned about iterative product improvements, rather than a long term profitable go-to market strategy. lots have done it, and lots have failed. very few have the business discipline to do it properly--as a business. the most notable exception, to whom i give all the credit in the world, is mark at rogue audio. from what i gather, same boards used in every pre and every amp.

smart man.

there's way too many speaker manufacturers to serve this small, niche market. if it weren't for low overhead models (i.e. guys working at home and using the tax write-offs), you'd see far fewer companies. anyone out there want to be a speaker manufacturer, here's a hint: use the same drivers and cabinet base in every model, differ products by # of drivers and crossover parts (inexpensive relative to drivers). electronics mfgs--see rogue for an example how to do business.

and btw: be prepared for bankruptcy if the industry rags dont like you.

(exception: an alternative that may be viable is to go the ULTRA high end route, ala Rockport's $70k turntable and its low cost $30k entry level model--this assumes you have the knowledge to be the best engineer out there, and frankly, there's few guys with that capability...maybe 5. want names?)

all of this may or may not be a good thing. but it is what it is.

rhyno

good comment will, but one more thing--this industry NEEDS consolidation. how many speaker / amplifier manufacturers can a niche mkt support? well, it shouldn't support the amount that it does, but it does through the low overhead (working in my garage) model along w/ outrageous markups that are the norm for the industry...little more than collective unorganized collusion.

and another thing--a fool and his money are soon parted. the best gear is rarely the most expensive...i feel sorry for krell owners who never considered belles.

rhyno