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2024年5月10日发(作者：储又菡)

Report for Beats

Lou Shiyu

History

In the world of headphones and speakers, Beats by Dr. Dre are well-known, even though

the company is relatively young. The idea of the company came from the collaboration between

Andre Young and Jimmy Iovine. Andre Young, better known as Dr. Dre, is a hip-hop artist and

famous producer. Jimmy Iovine is also a producer and the chairman of Interscope Geffen A&M

Records. Dr. Dre was approached to back Dr. Dre branded sneakers, but Iovine suggested

speakers instead. Both men wanted to bring back the experience that music has to offer which

had been lost due to a decline of audio quality. The company was established in 2006, and it

released its first pair of headphones in 2008. Today, Beats offers a variety of sound systems,

high-quality headphones, and operates a digital music service. Beats headphones include models

such as, Pro, Studio, Wireless, Mxr, Solo (HD), and Executive. For earphones, Beats offers Tour,

Powerbeats, Heartbeats, and Urbeats. The types of speakers offered by Beats include the Pill,

the Beatbox, and the Beatbox Portable.

Beats by Dre has one storefront located in New York, New York, which was opened in

2011. Even though this is the company’s only store, Beats products are sold by number of other

retailer whether in their stores or on their online sites. Some of these stores include Best Buy,

Target, Nordstrom, Brookstone, and Walmart. In order to promote its products, Beats by Dre has

used several celebrities, mainly popular artists. Musicians such as Nicki Minaj, , Lady

Gaga, and Justin Bieber all have promoted the brand. Famous athletes, like Lebron James, also

promote Beats products. These types of endorsements help create the strong brand image that

Beats by Dre possesses.

Mission Statement

“The company's mission is to provide a superior end-to-end music experience - with headphones,

devices and services - so fans feel the emotion and hear the music the way artists intended it to

sound from the studio.”

Beats by Dre is a well-known company providing customers a variety of headphones,

earphones, and sound systems. Beats promotes the idea of music being an experience with the

proper audio equipment. The company sells its products at one storefront, online, and through

other authorized retailers.

In the future, Beats hopes to keep its strong brand image. Beats wants its customers to

continue associating the company with high-quality products. Through the development of new

products, Beats by Dre could also reach out to different target audiences in the future.

Beats by Dre’s main customers are music lovers. This group consists of people who

enjoy listening with high-quality audio, aspiring artists and producers, and people in the music

business. Beats customers pay higher prices than others, but they feel that owning a Beats

product sets them apart and shows their appreciation for music.

In terms of capabilities, Beats by Dre can expand its reach by opening more retail stores.

While the products are sold in other authorized retailers, Beats storefronts can express the

company’s brand image more clearly than the other retailers.

To further the business, Beats by Dre wants to incorporate two new ideas. The first idea

consists of a rental service for airplane flights. The second idea offers customers the option to

personalize their Beats products.

SWOT Analysis

Strengths

Brand name: Named after the successful and famous, music producer, Dr. Dre. The use of

Dr. Dre’s name helps create a brand image for the customer that suggests Beats products are the

best for those producing music.

Product quality: Beats by Dr. Dre is manufactured by the well-known brand called Monster.

Monster’s cable and technologies has been proven to the consumers, thus, Beats by Dr. Dre will

be recognizing as a high performance and quality headphone. The design is innovative and

fashionable.

Product line: Beats product line includes headphones, earphones, speakers and audios with

various models and colors to choose from.

Multiple distribution channels: Beats distribution channels include online shopping, a retail

store, and merchandise stores such as Best Buy.

Product placement: The Beats by Dr. Dre headphone sets are marketed throughout the music

industry by music professionals and well-known musicians. Also, Beats is trusted by music

producers and fashion designers. Beats products have been used in several music videos for

artists like Lady Gaga.

The products are also loved by celebrities:

Weaknesses

Price: The brand positioning is towards high-end, thus the average price for a set of

headphone is about $150, compare to other brand which their average price will be around $80.

As the result, the costs for the consumers will inevitably be high.

Market share: For competitive brand such as Sony and Panasonic, they have different types

of product for different market. For example, they have noise canceling headphones similar with

Bests by retailing price from $100- 300, however, they also have ordinary headphones

start from $15-100. Beats currently don’t have headphones under $100 that may appeal to

individuals that are on a budget.

Opportunities

Product line extension: Beats need to extend to a larger market like home theatre

experience and high-end audios to meet customer’s needs. Similarly with the continuous

progression of the Apple’s iPods, Beats should look to create new products in order to offer its

customers different and newer options.

Corporation with Car Company: By providing cars with high performance audio systems,

Beats can reach out to a larger market.

Marketing and PR: Beats can improve their PR skills by hosting evening parties with

celebrities to improve brand awareness. Beats can also do more marketing campaigns to

strengthen the brand impact.

Expand international market: With the influence of Hip-Pop music and American

celebrities, Bests is more and more well-known out of Unites States. This is a great opportunity

for Beats to start promoting outside the United States and gain market share from foreign

countries.

Threats

Technology advancement: With the constant development of technology, Beats by Dre may

be threatened. If there is a new type of technology that other manufactures have and Beats do not

have, it will be a huge problem for them.

Competition: There are several other companies that make similar products to Beats. Some

companies include Sony and Senheisser. Many of these competitors have lower prices than

Beats by Dre, which causes further problems. Beats will always have to compete with other

companies with their similar products and lowers prices.

PR with celebrities: Beats uses several celebrities and artists to promote its brand. If any of

these individuals gain bad publicity, it may reflect poorly on the company. If the celebrity has a

negative image within the media, customers may think that Beats by Dre accepts the bad

behavior portrayed by the individual. This would affect the company’s image and possibly sales.

Idea

Specific Item

Beats brand has limited styles of headphones. There are two categories: earphones and

headphones, simply means in-ear phones and on-ear phones. There are four different kinds of

phones under the earphone category and six different kinds of phones under the headphone

category. All the earphones do not require battery and some of the headphones do require

battery. The phones that will be available to rent on the airplane will not be those that require

battery. After considering the characteristics of all the earphones and headphones, the company

should provide one kind of phone from each category to serve the rental market. We do not want

to provide more choices to the customers because: 1. It takes time to introduce the characteristics

of every phone 2. It just makes it hard for customers to make a choice with so many options. It

makes it simpler to choose just between either earphones or headphones. Under the earphone

category we will provide our customers with “urBeats.” The main characteristic of this earphone

is its durability. The sounds are guaranteed under our brands, so to save cost for both customers

and our company urBeats is the best choice. This earphone is described as “Grid-Iron Touch” on

our official website and it offers customers a relatively cheap price. Under the headphone

category we will provide our customers “Executive”. Beats Executive is made for travel. The

headphones provide customers with very good sound quality and it is lightweight and

comfortable to wear. It also helps to reduce the jet engine noise.

Pricing

The rental price will be based on the products original prices, and also will be based on

flight hours (or in other words, how long will you use the headphones or earphones). The retail

price for urBeats is $99.95 and for Beat Executive the price is $299.95. The rental price of each

phone will be less than 10% of the original price to make sure customers think it is worth it to

rent. The price that will be charged if the flight duration is around 6 hours (half hour is allowed)

is $ 4.95 for the urBeats and $ 8.95 for Beats Executive. If the flight duration is 6.5 hours we

will still charge the same price as the 6 hour flights. If the flight duration is more than 6 but less

than 14 hours (far international flights) the rental price of urBeats is $ 9.95 and Beats Executive

is $ 17.95. We will follow the 95 cents strategy for the rental market to make the price look less

but still with 95 cents profits.

Advertising

To advertise and introduce the new rental option for flights to customers, we will post

advertisements on the official Beats website. Pamphlets will also be available within the stores

where Beats are sold (eg: BestBuy). These outlets will help introduce the new rental policy

“when you are flying with a plane.” Also there will be advertising through media like television.

The ad may include a line such as “phones rental is available, check it out now!” at the end of the

television commercial to give customers an impact that “Beats will rent their phones?” This will

help attract customers and encourage them to get further information about the flight rental

market. By contacting airport advertising departments, ads can also be placed within the airports

on plasma screens. Shuttle buses will also be used by placing advertisements on the outside of

the shuttle to introduce the new service to potential customers.

Store Design

The rental service will be available through different airlines. First we will collaborate with

airplane companies rather than have our own store at airport. It is very expensive if we need to

reach our target market. The cost of renting stores at different airports will be so expensive and

will only reach a limited number of customers. Some airports have many terminals. Assume the

rental store is located at terminal 3 of an airport and a customer is by terminal 1. Although

he/she knows that Beats has a rental service at terminal 3, he/she most likely will not go all the

way to terminal 3 just for a rental phone. However, by indentifying the major airports within the

United States through research, the service can also be provided within existing airport stores.

This then allows customers to get the products from both the airport stores and on the planes.

One purpose of the airport stores is to provide customers a way to try the products and get their

feedback. Another purpose is to advertise our band. By working with airplane companies and

making deals with them, the plane attendants can help reach the customers and provide our

products to them.

Visual Merchandising

As mentioned above, the service will only have two products available for customers to

rent during their flights. In order to present the products, pamphlets will be printed out and

placed in the back of the seats on plane for customers. These pamphlets will introduce the

products to the customers and help them decide whether they want to rent earphones or

headphones. A POS machine will be needed during this process. Both the earphones and the

headphones will have numbers on them to identify with one and another. Customers will need to

use credit card for the rental service of either kind of phones; cash will not be accepted. When

customers use their credit card to rent the earphones, attendants may need another device like a

laptop or a similar system to record the last 4 digits of the cards with the number on the

headphone together. This will make it easier when customers return the earphones to the

attendants after they have arrived at their destination because we will still be able to check if

there are any damages to earphones or loss of the earphones. If the earphones are lost, then we

will charge the original price of the lost earphones on Beats website from the credit card, which

was recorded together with the earphone’s number. If there is a damage we will check the

damage and charges will be depends on the damages. Beats will make sure to provide customers

good quality earphones (clean and no damage) on flights. There will be extra or back-up

earphones on each airplane to make sure the quality of the earphones is kept up to standards for

each customer.

Idea

Beats by Dre is a new service in the market targeted at music lovers and the innovative.

The Beats range of headphones is attributed to its high quality sound. Designed by one of the

best music producers (Dr Dre), these headphones are intended to allow users to enjoy music as it

was intended. The fact that these headphones receive the endorsement of celebrities puts them

on high demand.

According to Vaishali, a retail mix is a method of combining different retail variables in

an alternative to achieve a high marketing strategy. The aim of this strategy is to attract more

customers. Such variables include aspects such as specific items, pricing, advertising, store

design and visual merchandising.

A comprehensive SWOT analysis of the headphones reveals certain aspects that are

important to the development of this retail mix. The headphones have a reputation. This

reputation revolves around the pure sound quality that the headphones produce and popularity

among young people especially college students and workplace newbies and celebrities. This

builds strong sense of trust for customers. However, the price of the headphones is quite

prohibitive to most individuals.

One new service we are going to offer is personalization. Personalization is the process of

adding words, numbers, colors, designs and other characters onto existing models of electronic

products of Beats through engraving, embroidery, different ways of assembly or other

personalization techniques. This allows customers to create exclusively designed headphones or

speakers with names, dates, poems, sentiments or any other message to make it unique and

memorable. The customization service would make Beats products meaningful as gifts when

customers have needs to send gifts to others.

Specific Item

Basically, we recommend for Beats to provide two specific personalized services, which

are changing colors and engraving. When customers browse the official website of Beats, an

added section called “personalization” will appear on the site to introduce features and pricing of

this new service and direct customers to online shopping.

One headphone has separate parts being assembled together. However, for existing

headphones of Beats, every headphone body is painted with one color and customers can only

select one color for one headphone. Whatever the unpopular color you choose, you are able to

find the exactly same product that others are using. For those who are not necessarily

professional towards music but proud of their sense of taste, they have a strong personality and

the desire for specially designed product for themselves. Beats is likely to lose attention from

them due to the lack of customization service and the widespread popularity among the public

that makes Beats common. By customizing headphones online, people are able to create their

own headphones with various colors for each part of the product and the logo on the headphone

as well. Moreover, people are able to select the color of the cables that come with the

headphones. There are eight basic colors available at present, which are black, red, white, dark

blue, light blue, green, purple and pink. Beats can offer more colors if the personalization

reaches expectation and makes profits. After designing a colorful headphone, customers are

directed to the final step to type whatever they want to be engraved on the headphones. Beats

will engrave words on the body by laser, which is permanent. In order to achieve more flexible

customization, three positions can be selected from to display the engraving, which are the left

side, right side, and the top of the frame of the headphone.

Beats also sells speakers and earphones. Considering that speakers have lower demand

than headphones and earphones are too tiny to hold different colors and words on one body, we

will first implement the customization service for headphones only. Then after some time we

will evaluate feedback to decide on later actions.

Pricing

Personalized headphones would be priced higher than existing models that are available

online and in-store. This is a result of complex technology for painting different colors.

Additional laser engraving technology and intensive labor effort of handling the task and

assembling is also needed. On the other side, the main aim of a business is to sell its product.

Since the target market of Beats are music lovers from 18 to 34 years old, primarily males, who

are urban, hip and tech-savvy, high prices are likely to prevent them from purchasing Beats and

direct them to Beats’ competitors. The final price is based on how many colors the customer is

selecting for the headphone. If the customer picks a light blue headphone and only changes the

blue logo to red, the sales price would be lower than changing the logo’s color to red as well as

changing the color of the surface on the left side to black. The pricing range is between 10% to

15% more depends on models of headphones and their original prices.

The engraving feature is free since it is already an advantage compared to competitors of

Beats. Hopefully this will attract a cluster of customers away from its competitors. The

engraving makes Beats headphones a unique and desirable gift for oneself, for friends, and for

family members. For the purpose of appealing to more customers, the engraving service is free at

the beginning and then waits for market response. If it attracts enough customers and increases

sales figures by large amounts, Beats can price the service for several dollars to make more

profits.

Advertising

Beats seldom runs television commercials, so magazines that feature music and the

fashion industry would be selected as the media for Beats to advertise its new services. For

example, Nylon Guys, GQ, Men’s Vogue, Vibe and Billboard are good choices to display Beats

advertisement. Specific samples with different colors and engraved words are needed to be

showed in print ads to exhibit the sense of trend and innovation. The engraved words are

designed to be moving, inspiring or creative to impress and persuade readers.

Outdoor advertising is the other major media tool Beats should use. Effective channels to

promote a new service for the company of electronics would be digital billboards, bus

advertising, and street furniture, which can reach the public easily and are relatively long-lasting

compared to other outdoor channels.

Store Design

A place designed for the personalization service will be planned, of which the area is

based on size of the store, within Beats’ existing stores. Upon this, the store should be situated

where its targeted clients have no problem venturing. An interactive television screen on the wall

will play an introduction of how to personalize the headphones and produce samples of the

customized products. Two or more helpful salespersons are there to promote the new service.

The retail mix has to ensure that it has enough staff to run the store and to interact with clients.

Clients are fundamental in facilitating the success of the business. Catering to their needs

guarantees the survival of the business in the volatile environment. Also, various types of

personalized models will be exhibited in the area, and customers can make a purchase if they

don't want to spend time designing by themselves. In this case, these personalized headphones

are sold as ordinary headphones but with higher retailing prices. Drawing in new customers is

fundamental to the success of the business. Posters featuring customization services will be

shown in the door-way of the store to catch attention of passing people.

Visual Merchandising

Successful visual merchandising has the ability to maximize sales. Various samples of

headphones with distinctive designed styles will be displayed in the show window to attract

attention and engage passing people. On the opposite side of the door way, a magnified model is

hung from the ceiling by a string so that it can rotate around to show the product in 3-

Dimensional degrees. It is creative and eye-catching to motivate people to walk in and increases

the possibility of them making a purchase.

In the personalization area, pictures of people’s upper body are shown on the wall, which

indicates that they are enjoying the music and customized headphones are hung on the position

of their ears, which makes it look like they are wearing headphones. Customers can freely take

the headphones down and try them with media players.

Effective marketing for the store will see its sales increase and the store achieving its

objectives. As is with any business organization, the main objective is to make profits. It can

achieve this through different marketing strategies among them direct marketing which involves

directly reaching out to customers. Retail mixing is a profitable opportunity that allows the

observation of different customers and analyzing it to maximize on profits by offering products

that suit them.

Conclusions & Recommendations

Beats by Dre are very high quality headphones, but the only thing that makes the customers

choose other brands like Sony and Sennheiser over Beats is that Beats are very expensive. The

Beats in-ear headphones start from $99.99 and the over-the-ear headphones start from $199.99,

whereas Sony and Sennheiser have in-ear headphones starting from $19.99 and over-the-ear

headphones starting from $39.99. Beats should make a line of headphones that are less

expensive.

Beats should also offer customization of headphones in terms of coloring and engraving.

Currently websites such as customize these headphones according to the

requirements of the customer.

Another suggestion for Beats is that they should allow the customers to exchange their old

beats headphones for newer models, because these headphones are so expensive, it should allow

its customers to get them exchanged for an appropriate price depending on the model and the

condition of their old headphones.

Beats by Dre are known because of Dr. Dre. It is important that the brand has its own

identity. It should be known for the quality and design of the headphones and not because Dr.

Dre is associated with the brand. So, Beats should promote the brand for the high quality of

sound that it provides.

Also, Beats by Dre are not widely available internationally. In the United States, they are

very easily available, whereas in some countries like India, they are not easily available.

Because of this, people end up buying headphones from other brands like Bose and Bang and

Olufsen, which are far more expensive than Beats. Also, people do not know about Beats in

these countries because they see them only in the music videos. Beats should, therefore, be

promoted by the local artists, like they are promoted here in the United States.

Works Cited

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Management Study Guide. . n.d. 20 April 2013.

McGraw Hill. The World of Retailing. McGraw Hill, n.d.

Martin, Andrew J. "Headphones With Swagger (and Lots of Bass)." The New York Times. The

New York Times, 20 Nov. 2011. Web. 14 Apr. 2013.

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"CCT322Beats - Part Two - SWOT." N.p., n.d. Web. 2013.

Company?page=company>