How Aman Gupta's MARKETING STRATEGY turned Boat into a 1500CR Company : Business case study
Hi everybody board is one of the most incredible brands in the indian startup ecosystem and the most astonishing thing about this company is that within just five years they have achieved such a strong position in the market that if you look at the tws or true wireless stereo market as of q3 of 2021 while bolt stands at five point three percent noise stands at seven point seven percent real me stands at eight point
One percent board stands way ahead with a market share of thirty five point eight percent which is literally more than the next three competitors combined on top of that the revenue of the company has already crossed fifteen hundred crores in fy twenty one and the profits have already shot up by sixty one percent since fy twenty now considering the fact that boat is now going for an ipo the question is how did board achieve such an extraordinary
Position in the crowded hearable market of india what exactly was their business strategy and as investors in students or business what are the business lessons that we need to learn from mr aman gupta and his wonderful team at boat this video is brought to you by cuckoo fm but more on this at the end of the video people one of the most important reasons for both success is its genius market positioning and if you look at the rise of boat it is very very similar to the
Rise of one plus phones in india now many of you must have seen that there was a time when the oneplus brand was just one of the most functional underrated brands in india and it is only popular among tech enthusiasts but suddenly with the launch of oneplus 7 the oneplus tag became one of the most popular brands in india and you could literally see oneplus 7 phones everywhere in 2019. in fact at one point in 2019 oneplus was selling more phones
Than apple and samsung combined now the question is in spite of the phone market being so crowded with vivo oppo samsung huawei and apple how did oneplus become a legend the answer to this question lies in this pricing chart now if you look at the pricing of phones in india back in 2019 you will see that iphone was the costliest with the pricing of 85 000 rupees then we had samsung s10 priced at 55 000 rupees plus and then straight away we had oppo v1
Other companies that were primarily focused on selling phones below 25 000 rupees now although they had costlier phones in india the focus of these companies was more on 25 000 rupees and below that price range now you see there is a huge gap that's left out between 25 000 rupees to 55 000 rupees which was only being addressed by samsung then as we all know samsung phones do not offer as much as a value for money as its counterparts and this audience ladies
And gentlemen was the most premium unaddressed and more importantly a large audience that was left untapped and here's where we saw the rise of two phones number one was xiaomi mi 9 and 31 000 rupees and one plus 7 that was priced at 35 000 rupees and both these phones positioned themselves exactly in between 25 to 55 000 rupees price range and they both had insane specs and offered way more value for money as compared to samsung phones now the
Question is why didn't mi9 become a market leader like oneplus well that is because oneplus built a crazy level of aspirational value for its brand because of getting endorsed by none other than robert downey jr himself now i don't know how many of you noted this but then in the exact same year the avengers end game hype was at its peak because when endgame was about to release in 2019 and everybody knows what an insane fan base robert downey jr has
In india and this aspirational value is something where xiaomi lagged because of which oneplus won a huge market share in india in 2019. now i'm not saying that everyone bought one plus phones because of robert downey jr but the fact is that the aspirational value that robert downey jr's endorsement got to oneplus got enough people to see oneplus as a premium brand because of which it got enough people to buy the phone after that when people saw that the tech was
Genuinely the best that you could find in that range it eventually led to positive word of mouth and hence oneplus 7 became one of the best selling phones in india in 2019. now if you own a oneplus you must have also noticed that you actually considered buying an iphone but when you saw the stupendous difference between the price of oneplus and an iphone oneplus by default looked like an obvious and the most comfortable choice
Of all therefore the oneplus brand was able to build an aspirational value in the minds of the premium customers in india because of which it was able to beat xiaomi and was able to tap into those users who were premium customers but could not buy an iphone now the question over here is how is this related to boat and what does oneplus position have to do with board well if you look closely
After apple introduced the airpods in 2016 three important things happened in the exact same year there was a sudden boost in the fascination of wireless earphones number two the jio wave hit india in 2016 that led to the skyrocketing of the screen time of indians and most importantly many many phone manufacturers stopped shipping earphones along with their smartphones and if they did these earphones were the most basic versions in the market
And all these three factors created a huge market for hearable in india so from 2017-18 onwards many many companies started jumping into the hearables market and if you look at the pricing charts of the most popular brands in 2018 this is what it looks like first we had the ultra premium wireless earphones category wherein we had bose and apple that had a base price of 17 000 and 15 000 respectively then in the premium category that is between 10 to 15k we
Had only jbl as a significant brand with its pod version being priced at 10 000 rupees then for sub premium that is between 5000 to 10 000 we had sennheiser's wireless earphones that started from 6400 rupees onwards and below this price point that is below 5000 there was no giant brand and yet there was a huge demand for wireless earphones in india and this is where we saw four brands come in mivi priced at three to four
Thousand rupees skull candy priced at two thousand rupees onwards we had both rockers at one triple nine and then we had noise shots priced at three triple nine and then we had several local brands including bolt that were priced at 999 rupees and below now the question over here is with these four competitive brands what was so special about boat that it is now market leader by such a huge margin
Well there are two specific reasons for that while skull candy was only popular among enthusiasts and a very limited segment of the audience the other brands like me and bolt were barely known in the market whereas boat had become far more popular because they had roped in hardik pandya in 2018 and this is where the power of celebrity endorsement comes in just like robert downey jr's endorsement brought in an aspirational value for one plus hardik
Pandey's endorsement by default built an aspirational value for boat as a brand as a result in the two to five thousand rupees category board became far more familiar than its counterparts now some people might say bro just because some celebrities endorsing why will we buy earphones we are smart enough to make a good choice without endorsements well you know what guys here are some basics of marketing for you a customer knowingly or unknowingly determines the
Value of a product based on two types of values tangible value and perceived value tangible value is the real value of the product as in if the audio sounds great in one earphone it has a great tangible value and perceived value as the name suggests is basically the judgment that you make based on how the product is portrayed for example if a restaurant looks like this you subconsciously assume that it has a clean kitchen and in our case the fact
About audio devices especially earphones is that only trained yours as in only the people who are involved in video editing or sound editing can actually spot the intricate differences in audio whereas the knife ears will not be able to tell the difference in audio quality between two devices as a result you can barely spot the difference between two products as a result the entire audio market from the customer standpoint is practically
Commoditized and since there is no added tangible value to the product that you can spot the only value by which you will judge an audio product like your phone is by perceived value so if i place two earphones one of some random brand and the other that is being endorsed by hardik pandya you are more likely to trust the latter than the former even if you are not a diehard hardik pandya fan so the only delta that inclines you to purchase a product like
Your phone is the perceived value of the product now just to give you an idea about how super powerful this is here's some simple math merely because of celebrity endorsement if boat is able to charge an average premium of just 200 rupees extra per product here's what it looks like with 16.6 million tws units shipped this year and with boat having 35.8 market share board would have shipped close to 59 lakh units
So if they got you to pay an average premium of 200 rupees per product due to celebrity endorsement boat has already made 118 crores extra in revenue fun fact is that the profit of the company in fy21 itself is 78.6 crores this is the power of building a perceived value in a crowded commoditized market this is the reason why boat obsessively focuses on presenting itself as a lifestyle brand
To build an aspirational value for itself both with endorsements and design so after hardik pandya they also roped in risha panth shikhar dhavan bhumra and prithi shawn 2019 followed by neha kakar kiara advani and karthik aryan after that they also signed up shreya shair 2020. secondly boat also collaborated with celebrity designer mazhaba gupta to launch a limited edition collection of spunky headphones at the lakme fashion week 2020 and now they're also
Collaborating with beera which is again one of the most favorite millennial brands in india this is how just like oneplus was able to present itself as a far more premium product far more familiar product as compared to xiaomi mi 9 both through its collaborations has been able to build the same aspiration value to stand out from the rest of the crowd and we also know from the jockey case study how powerful this aspirational
Value building is and secondly one of the most underrated reasons for boat success was also the foundation they laid with an insane product called boat stone and these speakers are by far one of the best bluetooth portable speakers in the market and the reason why this is such a big deal is because both stone became popular without celebrity endorsements or any fancy marketing strategy during that time while jbl flip was priced at
Four thousand nine ninety nine rupees boston was priced at just two thousand rupees and to my knife years both sounded as good as jbl this is the reason why boat is standing tall in spite of powerful players like real me and oneplus in the market and even today at the entry level in the earphones market boat is still priced at a bare minimum of 299 rupees because of which a student is more likely to buy a boat and when he loves it three years
Later after he graduates when his purchase power increases he is more likely to buy a boat product whereas in case of oneplus the cost barrier itself is very very high and now after laying a solid foundation of positioning itself as a lifestyle brand boat is slowly expanding its price range to position itself in the upper range of four to five thousand rupees and secondly it is also getting into smart watch segment which is again a huge market to be
Tapped into and you know what's very very interesting to note is that just like boat created an aspirational valley for hearables after apple created a huge market for smart watches noise is now getting ambassadors like tapsi and rohit sharma and is even spending a ton of money in social media campaigns to build a spiritual value for its watches and this is boosting not just its watt sales but also the
Hearable sales because of which it is already the number two player in the market right next to boat so now the rivalry of noise and boat is something that's going to be very very interesting to watch this is how by building a quality product by choosing a wonderful time to enter the market by standing out from the rest of the competition through lifestyle marketing and through strategic collaborations aman gupta and team have turned both into a market
Leader in the hearable segment of the indian market and this brings me to the most important part of the episode and that are the lessons from the case study meanwhile people if you're someone who's hungry to learn such business stories and you do not have time to read an entire book you can listen to an audio book in your own regional language using the cuckoo fm app and my personal recommendation to you is to listen to this audiobook called fresh works from
Chennai to nasdaq this audiobook covers the iconic story of how an indian software company went from humble beginnings to rocking the nasdaq itself and in the 21st century india needs entrepreneurs now more than ever and coco fm is on a mission to break the language barrier so that the knowledge of entrepreneurship is not just limited to the privileged english audience which is why they have some of the best
Audiobooks in the world in six different regional languages and you can even listen to the inspiring stories of mark zuckerberg steve jobs and jrd tata in your own regional language and you can get your hands on their thousand plus our content library by getting their annual subscription at just 399 rupees on top of that you can get a special 20 discount using the coupon code think 20 which will bring the price down further to just 319 rupees so if you want to
Quickly get an insane amount of knowledge through audiobooks download the cuckoo fm app from the link in the description moving on to the lessons there are three very very important things that you need to learn from this case study lesson number one whenever you launch a product in the crowded market always try to figure out how you are going to differentiate yourself in the presence of the big guns in this case if someone had told aman gupta that
Dude there is jbl apple skull candy and so many other brands then what is so special about you then on the outside it almost looks like there is no room in the market but the moment you take a pen and paper and you start noting down their price labs you will very clearly be able to see that the 1000 rupees to five thousand rupees lab is literally empty and you could actually make your mark over there so my homework to you is take a pen and paper
And do a thorough market research of the smart watches market and you tell me how noise and boat have a solid chance of building a 1000 crore business in spite of the presence of giants like titan fitbit samsung and apple lesson number two celebrity endorsements although looks like a cash drain in some cases even today it could be a game changer in a crowded commoditized market now considering this factor i've got one question for you me we actually had
Ambassadors like carrie and bb endorsing their product right but boat went with hardik pandya karthikarin and the rest my question to you is do you think this difference in choice of ambassadors made a difference if yes then tell me why in the comments section and lastly if you find time please read this book called alchemist by rory sutherland that's all from my side for today guys if you learned something valuable please make sure to hit the like button in
Post a Comment