Sounding The Market Out

In the case of Bose Corporation, hi-fi could easily stand for high-finance, not high-fidelity "" albeit from a "marketplace" perspective.

What does a brand which is priced somewhat over the top do to make inroads into a market like India where the quality of music is still dictated by hard economic considerations?

Dr Amar Gopal Bose "" the legend behind Bose Corporation "" is Indian. But that is only part of the reason why his company is hoping to make sound waves in India.

"What do you think of when you think Bose?" asks Ratish Pandey, general manager, Bose Corporation India Private Limited.

"The answer is unequivocal: great music, but beyond my means. We now want to set the record straight: Bose is high-end alright, but it's wrong to say that it's not affordable.

Five years ago, the most expensive Bose system (available in India) would have set you back by Rs 2,50,000; the cheapest one cost Rs 90,000.

Today, the same systems cost Rs 1,75,000 and 69,000. That's not all. A pair of small Bose speakers are available for Rs 7,900, and the cheapest integrated music system comes for Rs 32,900.

"The cargo, insurance and freight (CIF) charges have been scaled down considerably giving imports a boost," says Pandey.

"The only problem is that not too many people are aware of this "" as a result, there are not enough footprints."

For this, Bose India has embarked on a direct-to-customer programme: take the music to the listener, tell him about the price points, and let him decide whether Bose is worth the extra investment.

But first, it had to create an impression in the marketplace. This wasn't easy.

Bose, which worldwide has annual sales of over $ 1.2 billion, had been eyeing the Indian market since 1995 "" ever since the liberalisation programme had ushered in the open general licence.

However, there was still an embargo on retail products, so it started out with its professional systems division "" in layman's terms "providing sound in public places like hotels, auditoriums amd offices" using software that was proprietory to Bose.

"This was how we started building our equity and base," says Pandey. "Since the Indian audio market was nascent, most people didn't realise the finer points of acoustics."

For instance, at high-profile public functions people were concerned about the quality of sound "" but were clueless about the positioning of speakers.

Bose set up its first retail store in 1998 "" in New Delhi. The idea, at that time, was not to target volumes, but build up awareness about the brand.

This was the first time that an exclusive showroom was created for customers to get familiar with the music. They got to hear their choice of music played on Bose music systems, "There was no attempt to impel purchase "" we only wanted customers to get to know about the 'Bose experience'," explains a company spokesperson.

Today, two other Bose showrooms have sprung up "" in Mumbai and Gurgaon. This apart, Bose also organises demos major cities and big towns across the country.

Here too, the thrust is on the experience. "We realised that you cannot force someone to choose a particular brand of music "" it has to be felt first," says Pandey.

He adds that the company has been keeping its ear to the ground.

For instance, one feedback that Bose received was that people felt that one could shop for Bose products only in cities which boasted of company stores.

So a toll-free number was installed (1600-11-2673) which can be used to place orders or make enquiries. Bose promises to deliver a product within 72 hours to any part of India, post confirmation of the payment process.

"The good news is that the market is waking up to new technology, and people are realising the significance of R&D," says Pandey.

The Indian audio market, he says, will witness significant changes in the next couple of years, and will move towards convergence with audio, video, and software coming together on a single platform.

The audio market was estimated at Rs 980 crore in 2002 "" and this excludes sales from standalone VCD/MP3 players and car audio systems, which are estimated at Rs 200 crore and Rs 320 crore respectively.

Bose is tight-lipped about its market share but claims that sales from its retail stores are growing at more than 50 per cent.

It also says that since its budgetary considerations are tight (all profits are ploughed back into R&D, as per company policy), electronic communication "" the most effective means of being heard "" is ruled out for the time being.

"But we are confident that the Bose experience is going to do the trick," says Pandey.

Will the market wake to its music?