This duo created and built a multibillion-dollar headphone brand in just a few years. Find out how here!
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.
|
||
|
This duo created and built a multibillion-dollar headphone brand in just a few years. Find out how here! Dr. Dre and James “Jimmy” Iovine: Founders of Beats by Dr. Dre 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!
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. As mentioned above, 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.
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, occupying 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. — 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 they could 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. Hope you’ve found this week’s insights interesting and helpful. Follow us on LinkedIn. Stay tuned for next Monday’s Marketing Marvels! Do you know someone who’s a “super fan” of social media—Facebook, Instagram, Twitter, etc.? Learn more about Dr. Nir Eyal and the “Hook” model on next week’s Marketing Marvels! |
