Introduction
The market of Hi-Fi equipment comprises several sectors. They include media players, Blu-ray players, headphones, sound bars, speakers, and other products necessary for high-quality sound reproduction. The global Hi-Fi market has been experiencing an increase in recent years due to the development of wireless technologies. Taking into account geographic division of Hi-Fi market, Asia Pacific region is considered to be a leader, and the forecasts state it is going to preserve the leading positions in the following years. Asia Pacific region includes such countries as China, Japan, India, ASEAN, Australia and New Zealand. This research provides an overview of the Hi-Fi market of one of the countries of Asia Pacific region, India. It also includes the analysis of the major competitors, the profile of an ideal customer for Hi-Fi products, recommended retailers in India, and a presentation of a marketing communication strategy for Hi-Fi product promotion.
Overview of India Hi-Fi Market
Hi-Fi or home audio equipment market can be divided into the following characteristics. Thus, by price range, it can be low (with products cheaper than $500), moderate [price range from $500 to $1000), and high (prices over $1000). If divided by technology, the Hi-Fi market can be wired and wireless. Also, the market can be product-specific and focus on certain products such as speakers, sound bars, home radios, etc.
The development of Indian Hi-Fi market is under the impact of a global tendency of the Internet of Things and connected devices. It influences the choice of consumers and stimulates their decisions to buy connected household entertainment systems. Moreover, growing integration of mobile applications with the mentioned devices is observed. This fact is another driving force of the home audio equipment market. Similar to the rest of the world, the major part of Hi-Fi products prevalent at the Indian market, are equipped with Bluetooth and Wi-Fi. It increases the flexibility and functionality of these products and allows their operation through a smartphone. Another tendency is an increase in the volume of Internet-based content. Thus, music, podcasts, and internet radio are becoming more popular thus creating the demand for products suitable for several media types, which is a challenge to manufacturers. Moreover, the rapid development of e-commerce has a direct impact on sales of such devices. Finally, retailers also study and implement innovative strategies to gain a competitive advantage in the market. The complex of these factors influences the development of both Hi-Fi industry and the marker of Hi-Fi equipment.
While India is the second most populated country in the world, it is not accepted by the rest of the world as an active consumer of Hi-Fi devices (Pacula, 2015). Still, India is a part of Asia Pacific market which is considered to be the biggest when it comes to Hi-Fi equipment. The audio market in India has many differences compared to other world markets, primarily in developed countries. The major differences are its size and volume meaning that it is smaller and has fewer retailers. Nevertheless, it has both a mass market and a more specialized higher end segment, which is similar to western countries. The main offer of the mass market is dual purpose systems. They are popular because they reproduce both video and audio content. For example, it can be the classic A/V receiver (Pacula, 2015). Still, the stereophonic segment demonstrates a demand for more specialized integrated amplifiers. At the same time, the demand for “stereo separates and higher end speakers/electronics” is rather low (Pacula, 2015, para. 12). A specific feature of Indian Wi-Fi market is a relatively low sales rate. It is explained by the high price of the products. Moreover, high-end foreign equipment is more expensive and thus less affordable in India than in the West because of compulsory customs fees and taxes. Certainly, India-manufactured equipment is cheaper, but there are few manufacturers of audio equipment in the country.
PESTEL analysis can be applied to identify the factors influencing Indian Hi-Fi market. First of all, the political business environment in India in the 21st century is influenced by the US-India relationship (“India – Political environment,” 2017). As for inner factors, corruption can be an obstacle in providing business in the country. Economic aspect of the Hi-Fi market is strongly influenced by such strong competitors in Asia-Pacific region as China and Japan. China traditionally provides cheaper equipment thus not allowing new European brands to enter the market. Social aspect is also strong in Indian business. The fact that India is one of the most populated countries in the world allows choosing target population. Still, social inequality observed in the country demands a careful choice of products to be distributed in different areas. Technological factors are favorable for the development of the Hi-Fi market in India. The country has both 3G and 4G technology and has a strong IT sector that is rapidly developing. Legal aspect of the market can be a challenge for a European company entering the market because it has changed recently. Finally, environmental factors are related to the Hi-Fi market in the aspects of waste management and possible recycling of products.
Based on the findings of the PESTEL analysis, it is possible to identify strengths, weaknesses, opportunities, and threats of the Indian Hi-Fi market (SWOT analysis). Thus, the strengths include small size of the market because it is relatively new, and the country’s population. The weaknesses are the near competitors such as China and Japan, and social inequality that can negatively influence the ability of people to purchase Hi-Fi equipment. The opportunity includes the rapidly developing technology that empowers the use of brand-new Hi-Fi products. Still, there are some threats. They are the existing corruption and international relations of the country that can have an impact on the position of a European company in the market.
The Major Competitors
The Hi-Fi market is traditionally highly fragmented due to the diversity of products suggested by producers. Although the Hi-Fi market in India is not very big and active, there are some retailers that create a competitive environment. They provide diverse customer service and suggest a variety of products to attract and preserve loyal clients. The majority of these retailers provide their activity online, and only some have real shops to test the purchased products.
Amazon India is one of the big retailers that offers Hi-Fi equipment among a variety of other goods. The company is known for empowering small and medium-sized businesses and help then reach millions of customers (“About us,” 2018). Amazon.in has some programs aimed at boosting revenue and productivity. One of the benefits of Amazon.in is the delivery even to distant regions, which is valued by customers in India.
Audio Planet is one of the oldest companies in India dealing with Hi-Fi equipment. They claim that their “passion for creating groundbreaking experiences with new standards of performance has made us the pioneers of sound aesthetics in the industry” (“About Audio Planet,” 2018, para. 1). The company is an expert with significant experience in delivering bespoke systems that are grounded in acoustics and demands of clients. Attention to customer needs and desire of excellence allowed the company to develop from Home Theater dealers to a popular and authoritative “Audio Consultants and Home Theatre Specialists” (“About Audio Planet,” 2018, para. 2). Audio Planet gained its popularity due to a diversity of the provided services. Thus, the company suggests delivering International audio products, expert consulting and acoustic design, and, what if the most import factor for many customers, balancing the cost of a product to customer’s buying opportunities. In addition to professional consult and a varied choice of products, Audio Planed suggests high-quality customer care. One of the specific features of the company is their experience center with a demo room, which cannot be provided by online-only retailers.
HiFiMART.com is one of India’s online shopping facilities. Its major activities are focused on selling audio and video related goods and accessories. The goal of HiFiMART is to suggest Hi-Fi products to those customers in India who do not have access to showrooms, are not interested in this type of service, and are ready to buy equipment without any demonstrations (“About us,” 2015a). The company applies secure technologies of online purchases, and its facilities are easy to use. HiFiMART provides its clients with brand new and genuine products authorized in India.
KEI Hi-Fi is another retailer involved in Hi-Fi equipment distribution. It provides customers “with the highest quality Audio and Video residential products in India” (“About us,” 2015b). The company prefers certain international brands and introduces these premium products to many smaller retailers in India. The major focus of their business is to ensure that all of their partners have the necessary equipment and can set up the stereo or home theatre system for their customers. Thus, the company provides all ranges of service from selling products and their installation to further customer service. This approach allows Kei Hi-Fi stay competitive in the marked and have loyal customers for many years.
Ideal Customer’s Profile
Since Audio Frequency AB is an innovative company suggesting high-end active speakers, its customers should be interested in high-quality contemporary audio products and love music. Thus, the demographic characteristics of the group of customers are as follows. Gender is not significant in general, so the customer can be both male and female. Nevertheless, due to certain cultural peculiarities of India and the existing gender gap, the most probable customer will be male. The age range is varied. However, the age of a potential perfect customer will be restricted by his or her buying capacity. Thus, the ideal customer for the product under consideration is a young adult or an adult aged from 25 to 60. This category of people usually has education and is employees, and thus can afford to buy devices for hobby and entertainment. Geographically, since the target audience for the product is the population of India, the expected customer is an Indian citizen, most probably a city dweller. This person is not an accidental customer. The choice of devices such as high-end speakers is usually made by people who already have some Hi-Fi equipment and wants to try something new to improve the quality of sound. These customers usually have significant buying opportunities. They are deeply interested in high-quality audio and frequently buy additional accessories to complete their systems. Moreover, they trace the technology development and seek for brand-new and highly-technological products.
Recommended Retailers
It is possible to recommend some Indian retailers for Audio Frequency AB. First of all, Amazon India is a probable partner to distribute a new product. It is a retailer with the international name that pays significant attention to Hi-Fi equipment segment. Moreover, it allows advertising products thus allowing to reach more customers than other retailers. Another benefit of Amazon.in is its wide geography of delivery. It provides more customers with an opportunity to purchase a new product. However, the disadvantage of Amazon.in is the lack of opportunity to test the equipment before purchasing it, which is often important for Hi-Fi products’ customers.
Another retailer that can be recommended for Audio Frequency AB is KEI Hi-Fi. The company distributes high-quality audio and video equipment from all over the world in India and thus is a reliable partner with international experience. In fact, it distributes the products purchased from bigger companies to smaller ones in India. Therefore, it is expected to have a big customer database and has potential to distribute a new product quickly. Another benefit of Kei Hi-Fi company is its attention to installation service, which can be important for the high-end products.
Still, the suitable retailer that can achieve the target audience is Audio Planet. Being a company with sufficient experience in the Hi-Fi market, Audio Planed is an expert in providing its customers with high-quality audio equipment. It also has the experience of international cooperation in the field of audio equipment and well-developed customer service. The major benefit for customers who prefer to test new speakers before buying them is a demo room, which is a privilege not offered by online retailers.
Marketing Communication Strategy for the Product Promotion
Marketing communication strategy for promoting Audio Frequency AB new high-end speakers comprises the four Ps, which are price, place, promotion, and product. All of them are important to promote a new product on the market with high competition. Thus, the price is frequently decisive during the customer’s decision-making. Therefore, it is necessary to set a competitive price for a new product to create its positive image. Thus, to enter the market, the price should be slightly lower than that of the competitors with similar products. Nevertheless, the price should not be a primary focus but high quality of the product for a lower price. As for the place, it is India in a more global context. Speaking in more detail, big Indian cities should be selected as locations for the product promotion because of bigger buying capacity of the population.
The promotion itself should be multi-component. Thus, it is a good idea to involve diverse social media as well as advertising on billboards and e-mails to subscribers of the selected retailers. Digitalization of the contemporary world influences Hi-Fi choices as well, and many people surf the Internet for both for music and devices to provide high-quality sound. Thus, the involvement of social networks and emailing is expected to be effective for the product promotion. Also, a variant of contextual advertising on the pages of websites can be considered but may need additional resources from the company. Finally, the product is the most significant component of any marketing strategy. It has to be of high quality and correspond all of the announced characteristics. Moreover, it has to be simple to use, and the installation process should not be too long. Also, post-purchase support from the producer is a factor considered a significant benefit by the customers who want to be sure that in case something goes wrong, they will get the necessary support.
Marketing communication strategy applies some tools that make promotion more effective. Thus, for Audio Frequency AB, advertising and sales promotion can be the suitable tools. Advertising is an opportunity to make potential customers familiar with the product. It is closely connected with sales promotion and can use the same interventions. Thus, one of the possible measures to promote sales and advertise the product is its presentation. It can be organized by the company itself or with the involvement of the retailers. Such presentations allow potential customers study the product, observe its qualities, and test it. Moreover, presentations provide an opportunity to ask questions that are not included in information releases about the product.
Conclusion
On the whole, Audio Frequency AB has good opportunities to enter Indian Hi-Fi market. The market itself is relatively new and smaller than those of western countries, which means that the competition can be less severe. Still, the company can face certain challenges. First of all, the closeness of China as a huge manufacturer of cheap devices can be an obstacle for Audio Frequency AB. Secondly, the customers can be suspicious of a new brand and prefer well-known producers. Nevertheless, a well-planned marketing communication strategy can lead to the company’s success.
References
About Audio Planet. (2018). Web.
About us. (2018). Web.
About us. (2015a). Web.
About us. (2015b). Web.
India – Political environment. (2017). Web.
Pacula, W. (2015). The editor’s series: Sridar Vootla. HiFi Today. Web.