Sonance Case Analysis

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Sonance is a high-end speaker company with a strong history of innovation and product quality. One of the company’s recent example of their innovative talent is the Architectural speaker series. This is a high end speaker that is essentially invisible. While Sonance excels at providing the consumer a superior product, they struggle to maintain low manufacturing costs. In an effort to compete for more market share, Sonance has been targeting three markets, mass merchandisers, luxury home installers, and new housing developers. These three markets can be broken into two market segments, Owners and Installers. The Owners segment is reached through mass merchandising. This is someone who values a high-end and aesthetically pleasing audio system.…show more content…
The Installers market segment will evaluate the product based on their profit margin, not the value the end-consumer derives from the product. Success with the Installer segment will require a race to the bottom for costs. Counterintuitively, Sonance may lose market share with the Installer segment by offering a superior yet more expensive product. A more technically advanced product will lower margins for the Installer segment and cause the Installer to recommend a competitor’s line of speaker to their customer [Table 3]. However, in the Owners segment, a superior product may result in additional market share because the end-user is also the purchaser. Highlighting the positive attributes during the buying process will allow Sonance to differentiate their product from competition in the Owners segment without competing strictly on…show more content…
Functionally, Sonance will provide the consumer with high quality, aesthetically pleasing audio. Several competitors in the mass market space are capable of providing high quality audio. However, Sonance is a market leader in the Wife Approval Factor index (WAF). The WAF is a metric used to measure the aesthetics of a speaker set. In the Installer market segment, a high WAF is standard. Therefore, Sonance is not able to differentiate itself from the competition. However, in the Owners segment this is considered a gain and provides a point of differentiation. The Owner segment will also evaluate the brand of the speaker used, this allows Sonance to capitalize on its luxury brand image, providing the consumer with the economic value of a luxury product at an affordable price as well as the psychological value of having a luxury product in their home. The Sonance brand will not serve as a point of differentiation in the Installer segment because a luxury brand image is either not a consideration factors as in the new home development market or a required attribute as in the luxury home market. The luxury home market may instead derive negative functional and psychological value from the Sonance brand due to the recent trend toward mass

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