Sunday, January 12, 2014

Beats By Dre: What's The Strategy? (Identity or Ingredient)

"Beats by Dre" is a headphone brand. Wear the headphones and it says something about who you are: cool, you live for the music, you have discerning taste.

Wait, I forgot. You "become" Dr. Dre, just by buying them. The quintessential identity brand.

Photo of Dr. Dre performing via Wikipedia

Yes, except that Beats may actually be selling "bass-delivery systems" - an ingredient, according to Jesse Dorris. As he puts it, writing for Slate:

"He’s conquered the headphones market, but Dr. Dre isn’t selling great sound. He’s not even selling celebrity. He’s selling the concept of 'bass.'"

--and this ingredient has a very particular cultural symbolism--

"Bass has signified both sex and rebellion at least since Duke Ellington got the ladies on the floor in 1920s."

This isn't an abstract argument. The discipline of brand is essentially reverse-engineering others' success and failure so that others may repeat it and earn money.

And in a crowded market where I can buy a working pair of headphones for $1, Dre built a headphone business in which revenue shot skyward from $200 million to $1 billion within two years.

Is Beats By Dre really an ingredient brand, though? One might more easily be able to believe that people shell out $200-300 a pair because he's a celebrity.

Check out's "Celebrity Sneaker Stalker," below. Obviously the appeal of buying such expensive shoes is largely the feeling of being just like the celebrities wearing them. It is not the "superior" ingredients that go into making them - though they may actually be better.

Indeed, other companies, most notably Bose, have developed equity around sound delivery branding.

But Dorris anticipates this objection. As he notes, an expert review of headphones for the popular productivity site misses the point: These headphones make an asset out of something that a subject matter expert dismisses as unworthy.

"Beats’ raison d’etre is to simply blow the lids off the listener."

At the end of the day, it's not clear that companies have to choose between offering identity or ingredient branding. Ideally, they give the customer both. The key point is to know which thing you are emphasizing, when, and in what proportion.

For example, Splenda does not rely on a celebrity and it is not particularly healthy. So - although it could position itself primarily as an ingredient brand - it leans toward positioning itself as an identity brand. 

Splenda is actually geared to women - in particular women engaged in home and family, who relate to the concept of needing a moment for silence and relaxation. 

To save money or make money, consider what your brand strategy is and why, before heading down the path of implementation. 

* All opinions my own.