Power of branding: Bose Corporation

People use Brands as a surrogate for quality. Thats why one would like to think that for great marketing one needs a great product first. However as the story of Bose corporation shows many times thats not the case. When I was young, for years I was told by people around me that Bose is the best speakers available in the world. They were perhaps inspired by the fact that it was founded by an Indian. Also the high price of Bose products did not hurt their argument. The cost of Bose is a part of the illusion. By attaching a high price tag, Bose creates an exclusive mystique to their product. Many consumers who have not seen the full range of speaker selections consider Bose "high end". Endorsements such as the one below also helped

Thats why I was surprised when I found that Bose was more of a great brand rather than great product...

Bose has perhaps the largest and most effective marketing campaign of any manufacturer. What other speaker manufacturer runs television ads? The marketing budget is spent in several ways:

*Sales Incentives. In many cases, the store and the salesperson earn higher commissions from selling Bose speakers than from selling other equally priced speaker. Of course, in other cases, the store may have greater incentives to sell other speakers, but Bose is well above average among mass-market speakers.

*Store Support. The marketing budget also pays for large numbers of marketers who work with the individual stores, encouraging stores to stock and sell Bose products, and arranging in-store promotions and sales. If the experience of some on the audio newsgroups is to be believed, Bose even sends marketers to the stores to pose as salespeople, who steer customers towards Bose under this guise.

Of course, the company with the best marketing does not always offer the best products.

One point often made in favor of Bose is their research. Indeed, Bose has a large and highly-trained scientific research staff. However, it seems that relatively little of this research filters down to their everyday speakers --- their basic speaker designs have remained largely the same for many years. This rather surprising conclusion is supported by comparisons with other industries. For example, Budweiser and MacDonalds also have large and highly-trained scientific research staffs, and yet continue to produce the same products year after year. In essence, most of the research is for purposes of hedging their bets and flexibility --- if the marketplace demands changes, the corporation will have the research results in hand to react quickly. In the case of Bose, the research budget is still quite small compared to the marketing budget. Furthermore, the research makes good PR, and in fact justifies one of their well known marketing slogans --- "Better Sound Through Research."

Even more revealing was section on Bose Innovations

Bose has the reputation among the general public as a leader in innovative speaker design. This is partly the result of their marketing campaign, but also simply because they are unusual --- its sometimes easy to confuse unusual with new or innovative. However, according to the historically knowledgeble on the newsgroups, most of the Bose's "innovations" were actually devised years ago and incorporated into textbooks and commercial speaker designs pre-dating Bose by years and even decades. In some cases, Bose's patents are small refinements of long-established techniques. Thus, according to many on the newsgroups, Bose's main contribution is popularizing their speaker designs through aggressive marketing.