How an enterprise sees its customers can be understood simply by asking management staff who their customers are: if the answer is generic rather than prepared and clear, it is likely that the enterprise has not yet defined its target priorities within the sector, is unaware of needs and expectations, and has not guided its staff towards a convincing and passionate approach to customer service. The negative experiences in customer service, which many consumers receive even today, are symptoms of a company’s difficulty in really making the client the center of business attention, in addition to developing an effective marketing strategy. This, in fact, is the true essence of X-Treme Sales & Marketing
department: to start from the clients - their needs and expectations - in order to provide tailor-made
products and services and to make customer service
as ultimate goal in all business activities.
Strategic Marketing: the fragmentation of the market
Even in specialized reviews there is often a mention of the sound entertainment
sector or, in general terms, professional audio
; this is a rather imprecise and wide definition considering that, ever since the launch of commercial music (at the beginning of the 1960s), specific sectors of the market have been clearly defined, starting from the widest context above. Because the divisions between the various sectors are so clear, it is better to go through the market segmentation process step by step and, subsequently, see a larger picture of the complex question and the major competitors operating in each field. As it can be seen later on, it is also necessary to define the geographic environment of the analysis: this is crucial in order to compare the difference between geographically distant nations, for example, professional audio in Italy and the United States. In this branch in particular, two situations have been clearly identified: the Italian market, which is very similar to other European countries such as Spain or France, but also has unique features such as the rapid and often very innovative public services development (the latest being dine and dance restaurants
) and the audio market of non-EU countries including the Americas, which are defined as mass consumers or global.
Among the many variables/macros which make it possible to divide the vast audio market and sound reproduction into subcategories, the most important are:
a) PRODUCT variables
| Physical dimension (small/large systems);
| Price (high/low);
| Performance (max power in Watt);
| Materials used, etc…
b) CONSUMER variables
| Entrepreneurial customers or consumers;
| Distribution channel;
| Geographical position, etc…
Therefore, there are many variables through which the market can be segmented in terms of replace-ability among consumers. However, following the advice of R.M. Grant, the three most representative have proved to be:1. Price/Max installed PowerFields
| Low Price/
| Mid Price/10.000-50.000 Watt
| High Price/>50.000 Watt
the two variables are directly proportional and there is often no distinction between them; in fact, as far as the domestic hi-fi is concerned, the price range is the most important factor, whereas for great live systems it is the maximum stored capacity.2. Types of installation
| Professional audio (Touring, Entertainment, Electronic music)
| Public Address (or Commercial Sound)
| Audio Consumption Electronics (Hi-fi, Home Theatre)
| Car Stereo
the difference between the various fields often derive from the various places where the audio system is used: fixed installations such as dance clubs, music pubs, night clubs, disco bars etc…, concerts in closed environments (live music clubs) or open spaces, domestic uses (with a distinction between hi-fis
and home theatres
) and public venues such as sports centers, places of culture, airports, conference halls, etc…3. Location Fields:
| United Kingdom
| Rest of Europe
| North America
: there is no rigorous country-by-country distinction, however, with the exception of Italy and Spain, where unique conditions of economic boom have been identified in the sector, there are micro regions in which the market has common features in terms of complex demand, and also music culture (the total show costs are analyzed).The Segmentation Matrix
The “4 Ps” of X-Treme Operating Marketing 1. PRODUCT
Fig. 1 The segmentation matrix referred to the world Audio Market
Since the very beginning of the X-Treme brand product definition phase, the Top Management of the Sound Corporation
group have been talking to the technical staff from their new “live
” division (founded in 2001) about their intention to create high quality
sound reinforcement systems without compromises and without rivals in the professional audio sector: it was therefore necessary to “push the state-of-the-art hat of professional audio a little forward
Amplitude and depth of the range offered
By defining a line as a group of products which present relative affinities to important aspects of production or consumption, it can be said that the various X-Treme brand product lines meet the needs of anyone who has to organize a concert or a live event, either with reproduced or any kind of live music (from classical to hard rock), from small dimensions (up to 250 people) to great dimensions (over 50,000 people).
Wideness of range means the number of different product lines offered: the X-Treme catalogue previews 6 of them, while depth of range defines the number of different products within each line: in this case the standards are well defined and have always reflected the objective to faithfully reproduce the entire range of audible frequencies recognizable to the human ear.
Please note: it is important to remember that the X-Treme range (or production combination) is extremely coherent, and the correlation between the variety of product lines is well projected, both from the technological point of view and that of the final use.
The product is not recognized by its physical features or its intrinsicattributes, however, in this section, the word “product” refers to the “combination of benefits acquired by the client”.The first and most important of these benefits obtained when purchasing an X-Treme sound system is the product’s “bundle” concept: in other words, customers always enjoy a complete product, which is the product along with its additional services, for example after-sales service, long term warranty, flexible payment methods, EEC conformity certification, etc…
X-Treme products have been designed to facilitate installation as much as possible for the end installer. The accessories and hanging systems represent true added value for anyone who needs to install complex sound reinforcement systems in the field, whether these are line arrays or traditional. For this purpose, the manuals produced by the technical office are able to clarify the concepts expressed.
Reputation, image, brand
Fig. 2 The registered trademark that typifies all the X-Treme products
The X-Treme brand was designed and created by Carlo Rossetti, Art Director of one of Italy’s best known communication and press agencies (www.soluzionidinamiche.it), and is the exclusive property of the Sound Corporationgroup. Due to its impact and its recognizability, the X-Treme division can be identified straight away and therefore it declares its standards of business quality “at first sight”. This is a question of brand equity, or the brand’s economic value, and is level one in product differentiation.
As far as X-Treme’s reputation in the professional audio market is concerned, it would be too general to think of a successful image creation as being the task of the Marketing & Sales division and its advertising campaigns: the message that their Top Management continuously tries to convey to all its direct staff is that the only ones able to make or break the company’s reputation are the customers and final users of X-Treme products (initially known as Early Adopters, and now actual Endorsers).
Extremely heterogeneous from both the technical and project philosophy points of view, all X-Treme product lines (from Linear Source Array to the Monitor Line) have one single common denominator, an authentic strong point compared to rival products, an intrinsic value added to the fundamental qualities of reliability, efficiency and higher performance: a competitive price.
The three major difficulties regarding the price are:
1. its initial establishment;
2. its modifications over time (based on inflation);
3. its changes depending on the opportunities offered by the market.
The last two difficulties are about competence in the Sales department and depend on the situation of the market (or on the general economic conjuncture), the enterprise’s concentration of competition and technological-managerial know how. Referring to the item, it can be said that the establishment of the selling price of X-Treme products clearly goes against the market trend, both with its traditional approach (based on considering its own product cost calculation as the lowest limit and its competitors’ sales prices as the top limit) and the famous quality-price matrix.
Fig. 3 The traditional definition of the sales price as a value between two reference figures
Fig. 4 Price definition according to the Price-Quality Matrix of P. Kotler
(the coherence zones between the two parameters are highlighted)
Ever since the first days of its foundation, the Sales & Marketing department has adopted a non-aggressive advertising campaign (coherently with the business working process philosophy), the objective being to publicize the X–Treme brand and to motivate the staff in its growing department towards reaching the set targets (See “Mission”).
The table below shows the ways in which X-Treme has decided to market its own brand and the image of reality emerging in the market of professional audio systems for concerts, “live” events and music festivals.
Fig. 5 The different typologies for consolidating a brand:
the methods used for X-Treme areindicated in red
The marketing initiatives involve:
- A dedicated web site;
- At least 2 annual trade fairs within the sector (prolight&sound, SIEL and/or SIB);
- Advertising material in specialized magazines;
- Merchandising and promotional gadgets;
- Promotional sales dedicated to specific product lines.
As far as X-Treme product distribution is concerned, selective distribution
- often even exclusive -
could be placed first because of how it chooses a limited number of distributors (usually one per nation) in order to achieve better control over prices and the application of various installations.
Following this, in a second analysis, it can be agreed that the distribution features of X-Treme brand products are typical of those of the “live sound
” sector which, in most cases, can be identified in three ways, all operating on a rather “brief” distribution channel: 1) Direct Sales
: through which the enterprises reach the end client directly, whether they are private associations or organizations; 2) The use of exclusive agents
: similar to an agency contract, these “incumbent” enterprises delegate Sales management to external operators in a specific geographical area (for example a region or state) 3) The use of retailers/distributors
: in this case, the distribution of the company’s own products are delegated to smaller firms (usually consisting of no more than 5-7 members of staff) or public stores (shops selling electronics, electrical goods, etc…) which also sell other brands in more than one section of the market and in a not exclusive way.
It is very difficult to find information on this method, which is why X-Treme has been chosen as a sample company to measure some proxies in the professional audio sector’s distribution channel: X-Treme consists of 5 inside salesmen
(who are responsible for organizing annual trade fairs within the sector), 18 exclusive agents located
“around the world” (in Europe there is one in nearly every EEC country) plus a dozen multi-mandatory distributors
from across the entire globe (see Distribution network
According to the data provided by the Sound Corporation group administration,
approximately 70% of X-Treme’s turnover comes from its direct sales, 25% from contracts with agents (which display their own personalized price list) and the remaining 5% from all other means of contact (i.e. via the world wide web), including distributors.
- X-Treme Sales Department -
Via Monti Urali, 33
42100 Reggio Emilia – Italy –
Tel.: +39 0522 557735
Fax: +39 0522 391268
"The ultimate goal of marketing is not to sell a product, but to find a new client".
Marco Spotti - Key Account for Main Buyers