This duo created and built a multibillion-dollar headphone brand in just a few years. Find out how here!
Miles Everson’s Business Builder Daily speaks to the heart of what great marketers, business leaders, and other professionals need to succeed in advertising, communications, managing their investments, career strategy, and more.
A Note from Miles Everson:
Happy Monday, everyone!
We hope all is well in both your personal life and work life.
Let’s start the week with our “Marketing Marvels” where we talk about outstanding people in business and marketing. Every Monday, we highlight these people’s experiences, contributions, and insights in their respective industries.
Today, we’ll talk about the founders of a billion-dollar headphone brand.
Continue reading to know more about these “Marvels” and what their story tells us about the importance of targeting the RIGHT audience.
Miles Everson
CEO, MBO Partners
Chairman of the Advisory Board, The I Institute
Marketing Marvels
In the 2000s, many people listened to music through handheld devices like the Apple iPod. Most of these gadgets came with generic earbuds. For a majority of people, the audio quality of these listening peripherals was good enough.
However, there was a duo who thought differently about the situation. In their minds, the listening experience of the average music fan could still be better if they would use headphones that produce high-quality audio.
With this mindset, these business partners set out to design and create products that sound good and look good.
The names of these people?
Dr. Dre and James “Jimmy” Iovine!
Photo courtesy of The Hollywood Reporter
Dr. Dre is an award-winning music artist and record producer. He rose to fame in the 1990s for his work on rap and hip hop. Later on in the 2000s, he shifted his focus towards producing music.
Iovine is an entrepreneur and record producer. He started out in the early 1970s as a recording engineer who worked with artists such as John Lennon and Bruce Springsteen. In the 1990s, he co-founded Interscope Geffen A&M Records, a music label where he served as chairman and chief executive officer until 2014.
The duo set out to create products that enhanced the listening experiences of music fans. To realize this vision, they founded Beats by Dr. Dre (also known as Beats), an audio brand specializing in the designing and selling of audio products.
Before releasing Beats Studio, the brand’s first offering in 2008, Dr. Dre and Iovine reached out to various artists to give their feedback on prototypes during the initial stages of product development.
Aside from ensuring Beats headphones would sound great, the duo committed themselves to delivering a product that looked good.
Did the pair’s efforts pay off when their brand’s first product was released in July 2008?
Yes!
According to product reviews from Jasmine France of CNET and John Biggs of TechCrunch, the Beats Studio provided users with good sound quality. They also praised the stylish design of the headphones.
The only complaint about the product was it cost USD 350. Despite this criticism, people kept buying Beats headphones.
How was this possible?
Dr. Dre and Iovine targeted the RIGHT market for its products and came up with an appropriate marketing strategy.
As pointed out in a Forbes article, the co-founders targeted younger music fans who have yet to buy their first pair of “fancy” headphones. To capture the attention of this younger demographic, they came up with stylish designs for its products.
Photo courtesy of BMB
Aside from coming up with stylish product designs, Beats’ founders also implemented an advertising strategy that allowed the brand to reach a wide audience.
Taking advantage of their extensive connections in the music industry, Dr. Dre and Iovine secured multiple endorsement deals from famous musicians and other notable personalities.
Prominent artists such as Miley Cyrus, Nicki Minaj, Snoop Dogg, Lady Gaga, Wiz Khalifa, and Justin Bieber featured Beats headphones in their music videos before and after the brand released its products.
Additionally, Beats’ founders also reached out to famous athletes like LeBron James, Kobe Bryant, Tom Brady, and Serena Williams to promote their headphones.
The eye-catching product designs, good audio quality, and high-profile endorsements helped Beats become one of the most famous audio brands globally.
Commenting on the audio brand’s surge in popularity, Iovine said:
“Our thing was to make music sound the way we hear it in the studio. We had no idea this was going to happen.”
A Billion-Dollar Brand
Between 2010 and 2012, Beats raked in USD 1 billion in profits. By 2013, the brand controlled over 50% of the premium headphone market, with its nearest competitor, Bose, taking only 21%.
Due to its lead and high profits, Beats was poised to continue its status as one of the leading brands in the consumer audio space.
Additionally, Beats’ popularity also made it an attractive target for acquisition. In 2014, Apple bought the audio brand for USD 3 billion dollars, shocking industry observers at the time.
Despite the initial shock, Apple’s huge investment has paid off. According to 2021 market figures, the tech giant now controls 49% of the U.S. headphone market.
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Dr. Dre and Iovine were able to build and create a billion-dollar brand in just a few years despite being newcomers to the consumer audio space. These “Marvels” were able to pull this off effectively because they understood how to stand out from the rest of the competition.
What are some lessons you can learn from this duo?
For you and your business to thrive, you have to target the RIGHT audiences and fulfill unmet needs. Having a clear understanding of who your customers are will allow you to create offerings that cater to their needs and wants.
Once you’ve identified your target market and created the appropriate product or service, you need to come up with a suitable marketing strategy that captures the attention of your prospects. After all, for consumers to purchase your product, you must market and make your offerings known to them first.
Apply these insights in your product development and marketing strategies!
Have a great start to the week!
(This article is from The Business Builder Daily, a newsletter by The I Institute in collaboration with MBO Partners.)
About The Dynamic Marketing Communiqué’s
“Monday Marketing Marvels”
Too often, industry experts and the marketing press sing the praises of some brand or company’s marketing strategy.
… only for the audience to later find out that its product was a flop, or worse, that the brand or company went bankrupt.
The true ROI in marketing can’t be separated from the business as a whole.
What good is a marketing case study if one can’t prove that the company’s efforts actually paid off?
At the end of the day, either the entire business is successful or it isn’t. And the roles of marketing and communication are always paramount to that success.
Every Monday, we publish a case study that highlights the world’s greatest marketing strategies, marketers, and communicators.
However, the difference between our articles and the numerous ones out there is that we will always make certain that the firm really did generate and demonstrate earning power worthy of study in the first place (compliments of Valens Research’s finance group) in keeping with a person’s leadership skills in the area of marketing and/or communication.
We’ll also study the greatest marketing fails and analyze what they did wrong, or what they needed to improve. We all make our mistakes, but better we learn from others’ mistakes—and earlier, rather than later.
Hope you found this week’s marketing marvel interesting and helpful.
Stay tuned for next week’s Monday Marketing Marvels!
Cheers,
Kyle Yu
Head of Marketing
Valens Dynamic Marketing Capabilities
Powered by Valens Research
www.valens-research.com
