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THE BANG & OLUFSEN CASE STUDY – Using the Roy Morgan Values Segments 1 to re-position a brand

Discover your edge

By Colin Benjamin, Michele Levine, Simon Pownall & Stuart Tolliday

1 Developed in conjunction with Colin Benjamin of The Horizon Network

Bang & Olufsen brand repositioning case study

This report examines in detail the application of the theory of Roy Morgan Values Segments 1 between 1994 and 1997 to affect a change in the target customers for a prestige brand in the home entertainment industry, and so increase turnover and profits significantly above that which could be expected with a “more of the same” approach.

Bang & Olufsen is one of the oldest manufacturers of home entertainment in the world. It is a Danish company and the products are often seen as synonymous with good design of technology based products. The technology itself is rarely groundbreaking but the quality of materials and the user interfaces are second-to-none. Being possibly the only manufacturer that produces its own audio and video products “under the one roof” has given Bang & Olufsen a huge advantage in the area of audio/video integration. The company itself is very small, employing fewer than 3000 people in its research and development, manufacturing and marketing divisions. Most retailing of the product is carried out through an independent dealer network. The product range is small and the prices are generally seen as high. The company has won innumerable design awards and its products appear in the industrial design collections of museums all over the world. That it has managed to survive at all is testament to the clarity of the vision laid down by its founders in 1925 – that quality was to be the driving force behind everything that the company does. Bang & Olufsen (Australia) Pty Ltd is a wholly Australian owned and independent agent for Bang & Olufsen in Denmark and has been since the mid sixties. At the time of this project the company was privately owned by Andrew Donaldson whose father Godfrey originally secured the agency. Andrew was the Managing Director. Stuart Tolliday was the Product and Training Manager. Donaldson had run the business for approximately twenty years and Tolliday had been working with him for ten years. They worked closely together and ran the company with a small administration staff of five. In 1994 there were a total of eleven salespeople and five technicians to deal with service and installations. Through a series of events over a ten year period the company had gravitated from an import/wholesaler/retailer to an import/retailer and for the previous five years had owned the entire retail distribution of five showrooms within Australia. This created a very close relationship with the end consumer, and a high level of control of the retail experience. In moving from a multi brand environment to pure Bang & Olufsen showrooms, Donaldson had had many disagreements with Bang & Olufsen’s management in Denmark who at that time were convinced that a multi brand environment was the best way to sell their product. Donaldson’s belief in the single brand showroom for a prestige product proved to be very far sighted and his persistence in creating it for Australia paid off. Taking his lead from the brand values, quality had been a very important aspect of everything he did and the company was well respected by both staff and customers for that. Eventually Bang & Olufsen also recognised the value in what they were doing and a number of people came to Australia to examine Donaldson’s model. Their findings became the basis for a com plete change of face in retail policy for Bang & Olufsen world wide. 1 The Roy Morgan Values Segments were developed in conjunction with Colin Benjamin of The Horizon Network

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© Roy Morgan Research 2005

Bang & Olufsen brand repositioning case study

So despite a relatively low turnover, the...
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