This is the 3rd of our posts on brilliant brand ideas, this one by David Nichols, Managing Partner Global and our head of invention.
Over the last several years, the premium headphone market has exploded: U.S. sales of headphones = costing $100+ increased 73% year-over-year in 2012, far outpacing the overall headphone market (Source: NPD Group). Premium headphones now make up 43% of all headphone sales. And the brand that has made this happen is Beats by Dr Dre. In the last three years alone, sales have tripled from $350m to $1.4bn. It is now a global business with 70% share of the US $100+ headphone market. The company was recently valued at more that $1bn when it sold a share to Private Equity firm Carlyle Group.
Their brand idea is the simple and clear: Sound. Attitude. Culture.
Here we look at the brand idea in action.
Smart marketing model:
Their main media channel is endorsement – their products are seen around the necks and on the heads of countless celebrities in the music business and beyond. The company’s headphones have shown up in top music videos, including Lady Gaga
’s hit Poker Face. They have brought the cool creds of music to sports, as seen here
with LeBron James . They also got artists to lend their names to limited edition models – Lady Gaga, James and Justin Bieber all have their own versions. This endorsement-led model enabled Dr Dre to charge a huge premium vs other headphones. “People thought we were crazy,” says Beats by Dre CEO Luke Wood. “They said the marketplace would never support a $300 headphone.”
They have stuck to one clear, consistent symbol on all their models – no sub-branding or technical numbering to delineate their range. The result is that the Beats ‘b’ must now be one of the most recognized brand symbols of its age.
Refreshing the core
They clearly treat their brand like a musician: always focusing on the next hit song, but keeping the tone & style true throughout. Each season has a new colour (see here
for "this year’s" Blue . And so there is always a reason to buy a new pair of Beats. Like Swatch before them, they have replaced the functional need for a fashion one – where colour, coolness and being ‘in’ means people are now very likely to own 2-3 pairs of expensive headphones, rather than just the one.
Can Dr Dre keep up the momentum of Beats against the tidal wave of me-too competitors? Only time will tell. The operational complexities of managing such a fast growing global business may be challenging, but the marketing hasn’t missed a beat.