Sunday, November 23, 2014

 

On November 23rd, our team went to one of Bang & Olufsen’s flagship stores located in the exclusive area Xintiandi, in downtown Shanghai. Our observation showed that the location of the store is very strategic as it is located close to other exclusive brands, such as BMW, Omega and Burberry. The exclusivity really matches B&O’s highly distinctive products and target markets.

 

When entering the store, we immediately get the feeling of being in a museum rather than in a regular store. By talking to the senior executive sales manager, we discovered the target segment, target market, and customer’s perspective of Bang & Olufsen specifically in Shanghai, China.

 

First of all, we found out that the majority of the target segment belongs to young people who purchase B&O Play products, which mainly consist of headphones and speakers, which are more commonly used by the younger generation. While the younger people usually purchase B&O Play products, high disposable income families or individuals usually purchase the televisions, surround systems and telephones.

 

Second of all, the average numbers of people who buy Bang & Olufsen products (Traditional and B&O Play) are about 1-2 people during the weekday and 5-6 people during the weekend in one store. We also discovered that people who consider buying televisions do not purchase the product within one visit. This is due to potential buyers need to measure the dimension and quality of the products in order to know whether it fits perfectly in their room. However, customers who buy less expensive products such as B&O Play usually buy the products within one visit.

 

We also found out that B&O has the same strategy across the world. this can be shown as they have the same store layout everywhere. We noticed that the store in Xintiandi had red and green colors on some products and we thought that it was specialized for the chinese market as Chinese people tend to prefer products with more color. It turned out that this product is also available in other countries. This shows that B&O did not analyze the market in China deep enough and this is the consequences of it. Another strategy that B&O implemented is to make partnerships with luxury cars brands such as Audi, Aston Martin, BMW, and Mercedes-benz which shows that B&O focuses on both Business-to-Business and Business-to-Consumer.

 

The majority of customers who buy B&O products are existing customers who actually have the brand awareness. Most of the customers coming in to the store are Chinese, high end customers.

 

Most of the employees working in the store have gone through training to increase their knowledge regarding the products. In addition, some of the employees actually have been aware of the brand and its products before they went through the training.