'Bang & Olufsen sticks to tradition'

By Kim Yoo-chul

Bang & Olufsen CEO Tue Mantoni

Lego and Bang & Olufsen (B&O) are perhaps the two most recognizable Danish brands.

However, the two brands could not be more different. Lego produces colorful interlocking plastic bricks for children, a set which sells from around $30 and up. B&O, on the other hand, makes well-designed, high-end audio and entertainment systems. Its products include $900-cordless phones with candy colors and intricate designs, and $16,000-3D TVs that few can afford to buy.

Tue Mantoni, the CEO of the 88-year-old B&O, aims to diversify the company’s positioning. The company recently recovered its profitability after market challenges and uncertainties faced in recent years.

Although Mantoni intends to proceed with this new revenue-driven growth strategy, he does not plan to change the company’s longstanding virtue — maintaining client relationships with dialogue, not fancy advertising.

“From a marketing perspective, it’s important to understand that almost 75 percent of our business is done with existing customers, so we really focus on maintaining a personal relationship with our clients. There is less emphasis on advertising and more on maintaining this dialogue,” Mantoni said in a recent email interview with The Korea Times.

“In Korea, B&O participates in a number of design and lifestyle shows and sponsor golf tournaments and VIP events among other events. We find that these give us an opportunity to interact with our clients in a way that’s not possible through more mass marketing communication channels,” Mantoni continued.

The company has said it will both streamline its products and focus on new customer segments. Mantoni explained that to this end, B&O will focus on investing in materials that will uphold the company’s premium brand image.

“We pay attention to the appearance of the product from all angles, not just the front, because we know our products are often proudly displayed, like a piece of artwork, in our customers’ homes. That will help us maintain and exceed our standards, and this is what sophisticated luxury shoppers can recognize in our products,” he said.

The Danish luxury appliance maker has rolled out more affordable products in non-European countries such as China. However, the CEO said that such roll-outs will not hurt B&O’s premium image.

No strategy change in Korea

“At B&O, all our products embody some key characteristics that make our brand unique, so we don’t see this as tarnishing our high-profile image,” Mantoni said.

Korea is home to two consumer electronics giants — Samsung Electronics and LG Electronics. Foreign companies have attempted to capture some of the Korean market but failed. For instance, Motorola and HTC failed in the local handset market owing to weak brand management and marketing.

However, it seems that Mantoni, who formerly worked for McKinsey & Company in Copenhagen and London, doesn’t care too much about B&O’s limited presence in Korea. “Well, we would like to continue providing best-in-class audio and video, which combine cutting-edge design and using the best materials to continue the B&O tradition of excellence.”

According to Mantoni, B&O PLAY, the company’s sub-brand, has several features, including flexible device placement, outstanding sound and picture quality, as well as an affordable price point, which will attract new consumer segments. The remarks are well compared to its bullish stance toward key emerging markets.

B&O plans to open more than 50 new stores in China where it will heavily market its lower-priced PLAY items. This strategy is in line with its expansion in growth markets such as China and Brazil and decreasing dependence on Europe.

While raising brand awareness has emerged as the top priority for most Korean manufacturers, the CEO said differentiation is just as important.

“It’s extremely important that you excel in selected areas—to differentiate the brand. It’s no longer enough to have a cool brand—you need to also have the technology and performance to compete with the best. The products and the experiences we create are built on a deep understanding and a keen interest in the modern consumer,” Mantoni said.

In terms of innovation, Samsung was ranked ninth by Interbrand and third by the Boston Consulting Group.