Re-Position A Brand or B O

THE BANG & OLUFSEN CASE STUDY –
Using the Roy Morgan Values Segments 1 to re-position a brand

Discover your edge
By Colin Benjamin, Michele Levine, Simon Pownall & Stuart Tolliday
1 Developed in conjunction with Colin Benjamin of The Horizon Network

Bang & Olufsen brand repositioning case study
THE BANG & OLUFSEN VALUE SEGMENTS CASE STUDY

This report examines in detail the application of the theory of Roy Morgan Values
Segments 1 between 1994 and 1997 to affect a change in the target customers for a
prestige brand in the home entertainment industry, and so increase turnover and
profits significantly above that which could be expected with a “more of the same”
approach.
Background
Bang & Olufsen is one of the oldest manufacturers of home entertainment in the world.
It is a Danish company and the products are often seen as synonymous with good
design of technology based products. The technology itself is rarely groundbreaking
but the quality of materials and the user interfaces are second-to-none. Being possibly
the only manufacturer that produces its own audio and video products “under the one
roof” has given Bang & Olufsen a huge advantage in the area of audio/video
integration.
The company itself is very small, employing fewer than 3000 people in its research
and development, manufacturing and marketing divisions. Most retailing of the product
is carried out through an independent dealer network. The product range is small and
the prices are generally seen as high. The company has won innumerable design
awards and its products appear in the industrial design collections of museums all over
the world. That it has managed to survive at all is testament to the clarity of the vision
laid down by its founders in 1925 – that quality was to be the driving force behind
everything that the company does.
Bang & Olufsen (Australia) Pty Ltd is a wholly Australian owned and independent
agent for Bang & Olufsen in Denmark and has been since the mid sixties. At the time
of this project the company was privately owned by Andrew Donaldson whose father
Godfrey originally secured the agency. Andrew was the Managing Director. Stuart
Tolliday was the Product and Training Manager. Donaldson had run the business for
approximately twenty years and Tolliday had been working with him for ten years.
They worked closely together and ran the company with a small administration staff of
five. In 1994 there were a total of eleven salespeople and five technicians to deal with
service and installations.
Through a series of events over a ten year period the company had gravitated from an
import/wholesaler/retailer to an import/retailer and for the previous five years had
owned the entire retail distribution of five showrooms within Australia. This created a
very close relationship with the end consumer, and a high level of control of the retail
experience. In moving from a multi brand environment to pure Bang & Olufsen
showrooms, Donaldson had had many disagreements with Bang & Olufsen’s
management in Denmark who at that time were convinced that a multi brand
environment was the best way to sell their product.
Donaldson’s belief in the single brand showroom for a prestige product proved to be
very far sighted and his persistence in creating it for Australia paid off. Taking his lead
from the brand values, quality had been a very important aspect of everything he did
and the company was well respected by both staff and customers for that. Eventually
Bang & Olufsen also recognised the value in what they were doing and a number of
people came to Australia to examine Donaldson’s model. Their findings became the
basis for a com plete change of face in retail policy for Bang & Olufsen world wide.
1 The Roy Morgan Values Segments were developed in conjunction with Colin Benjamin of The Horizon Network
Page 2 © Roy Morgan Research 2005

So despite a relatively low turnover, the Australian operation had a disproportionate

degree of credibility in the Bang & Olufsen organisation.
The impetus for change
In some ways the products are too good. The service backup is second to none with
regard to spare parts availability, and customers fall in love with their products to the
point that they will spend hundreds of dollars repairing fifteen and twenty year old
equipment rather than replace it. The average time between purchases was over
seven years, which meant that repeat business was hard to come by. The business in
Australia was small, successful and profitable, with steady but unspectacular growth.
By 1993, Bang & Olufsen in Denmark had just completed a radical restructure, and the
company, under a new young and aggressive management team was in the process
of making a remarkable turn around from the brink of disaster. Following the massive
restructuring program, Bang & Olufsen was looking for significant growth opportunities.
The main European markets were well established and it was assumed that there was
limited opportunity for double digit growth, therefore it was decided to focus on the
agency-run markets and push some serious expansion into the Asian region.
There had long been a belief held by Bang & Olufsen Denmark (typical of many
European based companies) that a country as large as Australia needed far wider
coverage than just the main capital cities. In Denmark, a country of five million people,
there were over 100 B&O dealers, in fact one in almost every town, so they could not
see why at least the top 50 towns and cities in Australia should not have a B&O dealer.
This clearly was not, and never would be a practical solution, but with Holland, a
country with a similar population to Australia, having over 8 times the turnover, they
knew they had to look for more than just generic growth.
While it is usually true that your existing customers are your best and the most cost
effective to work with, they would not provide the growth that both B&O in Australia
and B&O in Denmark were looking for. It seemed that the answer to the desire for
growth lay not so much in increasing distribution but in finding a bigger group of
prospects. That would then drive a demand for more outlets.
They were aware of a group of people who (they felt) should have been customers,
based on the car they drove, the places they lived, their children’s private education,
holidays etc. but weren’t. Donaldson and Tolliday would meet them socially or in
business situations and were amazed that they simply didn’t consider
Bang & Olufsen for themselves. If these people knew the brand at all they generally
assumed it was “the best”, but they weren’t interested in owning it.
The question was “Why weren’t they buying?”. Through Andrew Donaldson’s
membership of TEC (an association for Managing Directors running their own
business) he met Colin Benjamin from The Horizon Network late in 1993. Benjamin
presented some of his work done in association with Roy Morgan Research on Value
Segments 1. He was able to show how Values had been used with the launch of the
Lexus car in Australia and he was keen to find a second case study.
It was as though someone had “turned on the light” as Benjamin described the various
mindset characteristics. They could not only see friends and relatives, but also their
customers and much more importantly, the people they thought should be customers
but weren’t. It appeared that the reason may have been the different Mindsets™ held
by these people.

The possibility that a market for the product existed that they weren’t addressing was a
very inviting one but seemed rather difficult to believe. Donaldson decided to
undertake some basic research to confirm/determine who their customers were. The
outcome of this research was to impact every aspect of the business.
Analysis of existing customers.
Being far from convinced that there was any veracity to the whole Value Segments 1
theory, it seemed logical to start by looking at who the customers were, using
traditional demographics. The intention was to find out where their customers lived, if
that related to their level of expenditure and how that overlayed with where the largest
potential disposable income lay. They were introduced to Simon Pownall of Centar
who was to provide them initially with a geographical picture of their current database,
and if the data was robust enough, an idea if the customers were skewed to any
particular Value Segment. Normally the skew could be established by using traditional
“face to face” interview techniques, however B&O knew that its customers would be
extremely difficult persuade to participate in an interview process. There was also the
overriding confidentiality issue Donaldson quite rightly refused to compromise on.
Initially B&O thought they had a good database – the sales people had written a
detailed sales docket for every sale for over ten years. The details existed on a heavily
customised “Tracker” CRM database that was automatically updated by the financial
system, and the salespeople used it on a daily basis. They placed a very high value on
customer records and their commitment to the confidentiality of that information. Bang
& Olufsen customer details had never been provided to any outside party before and
they did all their mail outs internally where manual sorting was the order of the day.
They did not mail to customers very frequently – usually about once a year to advise of
a “Sale”. The primary use of the database was related to sales prospects.
However to do any mapping they clearly had to hand the data to an outside party. A
long time was spent trying to get around this. The compromise reached to protect the
confidentiality of the database was that they would not supply customers’ names or
street address but only post-codes and purchase history. This was not what Centar
wanted as Pownall believed that it was necessary to work at a CCD level (typically a
CCD has 250 homes, whilst a postcode can have as many as 10,000 homes). There
was much debate about the usefulness of the information they were prepared to
provide but B&O were determined that they would not risk any compromising of the
security of the information held on individual customers. This served to raise the
awareness of everyone involved in the project of B&O’s attitude towards not just their
customers’ privacy, but business in general. It also provided challenges in analysis
because whilst mapping at postcode level to investigate demographic skews is quite
straightforward, using a geographic tool to track mindsets requires a much more subtle
investigative technique because the geographic skew by Values can vary quite
dramatically within a postcode.
Because Australia is largely a classless society (in comparison to other western

countries) the large socioeconomic boundaries between say “ghettoes’ and wealthy
enclaves simply don’t demarcate geographically to the same extent as overseas
societies.
The first thing discovered was that the data base was actually not as useable as they
had thought. It consisted of a little under ten thousand records and a complete list of
products purchased by date and price paid. Some records were over ten years old.

However there were many duplications, some customers having four or more separate
entries, addresses were incomplete, postcodes were missing or wrong, suburbs were
spelt incorrectly, information was in the wrong place or on the wrong line, (especially
with apartments), there was no consistency in the use of capital letters, etc. There was
no way of easily identifying the total spend of many customers who had made multiple
purchases or even to identify the actual number of individual customers.
They also found that many of the addresses provided were business addresses and
not the delivery address. This would skew the picture of where their customers lived, in
most cities giving an abnormally high inner city segment.
They had to begin with a major cleanup, initially having the salespeople identify as
many duplications and errors as possible from print-outs of their customers details. A
person was employed for several months to work through the data base, where
necessary, going back to the original handwritten sales dockets, using the phone
directories, and even calling customers (where they could find a phone number) to
validate delivery address details. The receptionist also spent many weeks correcting
and validating addresses by calling customers. While there are companies who offer
such services, as already stated, B&O were unwilling to let anyone else have their
customers’ details and further felt that it was unacceptable for anyone other than a
person from within the company contact them.
Eventually Centar was given a relatively clean database consisting of approximately

three thousand five hundred (nameless) customers identified by Postcode and spend.
There were five showrooms in Australia at the beginning of 1994, in Sydney,
Melbourne, Brisbane, Adelaide and Perth and so it was decided to map for the greater
metropolitan areas for each city.
Findings
Centar created a series of colour maps showing the customers by spend as well as
density. The maps showed number of accounts by postcode, total dollars by postcode
and average dollars by postcode. Centar also attempted to map the number of
customers as a percentage of the population by postcode, but the percentages were
too small to be of any significance.

Centar then overlayed the various MindSet™ maps for each city against customer
number, customer spend and average spend and started to look for correlations.
From the outset, the visualisation clearly showed a Mindset skew, and to the
experienced geographic eye the relationship was clear. However, the question really
was – how significant were the results? Were the skews strong enough to warrant a
whole change in strategy – especially when the original maps seemed almost counter
intuitive to B&O at first glance.
For example, using traditional statistical regression methodologies did not reveal much
because of the relative “thinness” of the data at small areas of geography.
Pownall had to try a number of techniques that a “purist” modelling approach would
reject. The issue seemed to be that there were many postcodes with data, but that the
because much of the data was “thin” it seemed to be driving the results. The “data tail”
was wagging the dog.
So Centar found it had to make many runs using a combination of techniques to

ensure the results where significant without compromising the methodology. For
example, they created a rank ordering of postcodes by each possible combination of
data sets – customer numbers, household penetration, sales volumes, product
volumes.
Australia had 2,385 postcodes for which Centar had detailed census information and
the Roy Morgan geographic clustering system which effectively allowed modelled
market research data – including the propensity for each postcode to contain varying
concentrations of each of the ten Values segments.
Because of the wide geographic spread of B&O customers, many postodes only
contained one customer record – while they could “see” that these postcodes were
contributing to the view, statiscally, it was difficult to prove. For example, one customer
in each of the postcodes of Claremont, (Perth), South Yarra (Melbourne) Rose Bay
(Sydney) in itself appears meaningless – until you realise each of these suburbs is
practically identical from a Mindset perspective – yet a postcode containing 10
customer records may “override” this subtle pattern.
It soon became apparent pushing all the data into traditional statistical models
(available at the time) was “overfeeding” the model. So Pownall went back to his tried
and trusted method of creating giant paper spreadsheets to literally examine the data
postcode by postcode.
Each postcode was rank ordered by:
Raw customer numbers

Raw dollar sales data
Dollars per customer
Customers as a percentage of the population
Customers as a percentage of households
These spreadsheets allowed them to see the differences between each of the
postcodes and to allow them to legitimately “cull” data from the analysis. For example,
in Melbourne, there appeared to be an unnaturally large “spike” of customers. Upon
further investigation two reasons for this appeared. Firstly, B&O used to have a sales
outlet in the city – clearly this generated sales within the CBD precinct above and
beyond population levels.

The second reason was what was colloquially referred to as the “Harley Davidson”
factor. In the early nineties, Harley Davidson’s became extremely popular with over
40’s businessmen looking to recapture their youth – particularly in “self made men”.
When Centar mapped motorcycle registrations they observed the same spike – but
only for Harley Davidson or other exotic marques such as Ducati and Moto Guzzi - and
the owners tended to register their motorcycles through their business (It is possible
that a great many Harleys were actually listed as” courier vehicles” on the books of the
businessmen!)
As amusing as this was, it was one of the reasons to look at what should be rejected
from the analysis because they were sure there were other anomalies – the data was
real, but could have been disguising the underlaying pattern.
By “manually” observing differences in the rank order of postcodes they began to see
those postcodes which “held” during the rank order process – in other words some
postcodes continually held in the top rank ordering whichever way the data was cut.
This gave a straight ordinal dataset on which to then base the correlations on, and by
comparing the results between the various runs they were able to see where the data
was creating “noise” and where patterns where beginning to develop. This allowed
Centar to see where the data was giving consistent results irrespective of which
correlation model was being used versus the differences.
It also produced surprising results – many inner city postcodes that, as a whole,
contained low income, disadvantaged populations featured amongst the highest rank
orders. On closer examination, these postcodes tended to contain urban
developments that governments had created in the sixties to house lower income
families. As a result, there were literally millionaires living across the road from the
unemployed. From a data perspective these postcodes mindset and demographic
profile where dominated by the disadvantaged residents, yet it was the much smaller
(in numbers) wealthier residents that had to be the B&O buyers.
The initial results proved surprising. There was an amazing correlation between B&O
customers and the Socially Aware1 and the Young Optimism1 segments. However the
alignment with the bigger and higher potential spending Visible Achievement1 segment
was less defined.
At that time B&O believed that their customers were mainly older and they were
concerned that the maps were wrong. Were there actually so many younger
customers? All the “usual suspects” in terms of wealthy postcodes were evident – but
what seemed strange was the incidence of postcodes that would not spring to mind as
wealthy – clearly something more that a simple wealth construct was driving the B&O
customer profile. A little more research of their own, where the sales people were
asked to estimate the age of each customer, showed that in fact the customers
spanned a much wider age group than had been assumed.
Roy Morgan Research was contracted to carry out a brand awareness study using the
Morgan Omnibus, and they tested for both aided and unaided awareness as well as
brand preference and intention to purchase. The awareness was predictably low, but
compared with a number of brands which were considered competition at that time, it
was significantly higher. When viewed across Value Segments 1, the correlation with
the Centar customer mapping research was very clear.
The Visible Achievement1 segment represented some 14% of the Australian

population (compared with the Socially Aware1 at only 10%) and yet their awareness of

Bang & Olufsen was less than half that of the SA group. It seemed that they just hadn’t
registered the B&O advertising as being relevant to them.
Unfortunately YOs usually do not have the spending capacity of the VA or SA

segments to purchase Bang & Olufsen products. While the number of YO customers
was similar to the number of SA customers, the average spend of the YOs was
noticeably lower. And while the proportion of VA was significantly lower than both YO
and SA, the yield was higher, which reinforced the decision to target this market.
The following chart shows the results of mapping the Bang & Olufsen customers
across the Value Segments 1 and the correlation with Young Optimism1 and Socially
Aware1 is obvious, as is the relatively poor representation of the Visible Achievement1
segment. There was also a surprisingly negative result for Conventional Family Life1.
This was surprising because families were assumed to be the greatest consumers of
home entertainment and Bang & Olufsen simply wasn’t there.
A detailed examination of Bang & Olufsen advertising from 1983 to 1993 gave some
insight as to why the customer group looked the way it did.
The basis of being able to link a ‘style” of advertising to a Mindset is through the link
between a battery of attitudinal attributes tracked by Values segments. Particular
Values Segments are quite clear on their preferences with regard to how they process
messages. Each advertisement B&O produced was matched to how each value
segment might perceive (or even notice) a certain style of advertisement.
For example, in most advertisements the photography was very cold and in most
cases pure product. It put the brand on a pedestal which particularly appealed to the
Young Optimism 1 segment, and it accentuated the design element which made it
attractive to the Socially Aware1.
The headlines were self congratulatory which provided an element of exclusivity so

desired by the Socially Aware1. The smugness was very appealing to the Young
Optimism 1 group. There then followed many lines of copy extolling the capabilities of
the product and providing the Socially Aware’s 1 much needed information and
eventually justification for the potential purchase.

There was no mention or suggestion of family, home or success and the images made
sure that a Visible Achievement1 mindset would never see the ad as being relevant to
them, and hence the copy and even the brand would remain unnoticed.
B&O had been running a far more targeted campaign than they realised. In many ways,
that alone was testimony to the power of Values Segments 1.
A typical Bang & Olufsen double page ad from 1992
Bang & Olufsen products have been very much positioned as a Socially Aware1
product through years of catalogues and the company’s own advertising, and hence
the showrooms also reflected that look – a European museum or art gallery style. So it
was all very consistent.
By now, consistent evidence was also building through four independent processes:
Mapping
B&O ‘s own age analysis
Roy Morgan’s omnibus data
Advertising style analysis

Decision to change approach
Donaldson and Tolliday recognised that in Europe there was a big Socially Aware1
market and consequently the product may well have still had significant potential there.
However even prior to their exposure to Values, they had felt that the cultural
differences between the old world and the new were responsible for the different level
of discretionary spending on design and the arts. The problem was that in Australia the
culturally sophisticated or what they came to know as the Socially Aware1 market, was
and still is quite small in numbers. B&O was reasonably represented in that area and
so if they continued down the SA path, the prospects for dramatic growth were very
limited. Serious pressure for growth from the Bang & Olufsen management in
Denmark made that unacceptable.
While growing the distribution would have satisfied the Danes in the short term, there
was little reason to believe that alone would deliver the increased turnover or profit
required by all stakeholders. In fact on a number of occasions in the past additional
showrooms had been opened and closed in both Melbourne and Sydney with minimal
impact on the total turnover. However, if they could somehow gain a foothold in the
Visible Achievement1 segment of the market, then some real opportunities to grow the
demand existed and that in turn would fuel the distribution growth.
Colin Benjamin maintained that it was possible to shift the public perception of the
brand in this direction, provided they were prepared to make a total commitment to the
process. The emphasis was on the word ‘total’. He continually referred to the work he
did with Lexus as evidence that Value Segments 1 worked. Donaldson & Tolliday
visited the Lexus showrooms and examined what they had done to position the brand
so far away from Toyota. It was soon realised that to be successful would require far
more than just a new advertising campaign.
Certainly one important part was to change the focus of the print advertising, which in
Bang & Olufsen’s case was the window through which most consumers would initially
contact the brand. But the critical and much more difficult task was to ensure that the
“promise” made by these new advertisements was delivered by the retail side of the
business.
This entails every aspect of the customer experience from the street presence to the
showroom fit-out, the style, dress and especially the attitudes of the salespeople, and
the entire after-sales service offering. The second part of this is obviously and
unquestionably the most difficult for any organisation to achieve.
A simple SWOT analysis provides a snapshot of the position of Bang & Olufsen in
Australia in 1994:
Strengths.
• The image of the brand was very strong amongst the existing customer
group. The quality of the showroom fit-outs was a considerable step
above every other player in the industry. The Camberwell showroom
had been the first in the world to use the total Bang & Olufsen designed
and built “Accenta” display system. Its success both as an identity
(branding) exercise and as a practical display system which hid the
increasing number of cables ensured that it was rolled out to all
showrooms over a short period.

• There were many customised systems in place and a fully documented

operations manual was the basis for all procedures.
• There was a computerised prospect database that was constantly being

analysed for sales opportunities via a structured activity program that
was monitored from the Melbourne head office. A lot was known about
potential business opportunities both in terms of timing, product and
dollar value.
• Donaldson had invested heavily in the frontline people. They dressed

professionally and in fact were more professional than most. They were
rarely sourced from the trade (except for the technicians) and a
comprehensive training program was a very important part of their
recruitment. They were dedicated and passionate about the brand and
there was a strong team culture. This was actively promoted and
reinforced over many years through regular visits by both Donaldson &
Tolliday to all stores and at a minimum, twice yearly whole-company
training meetings held in Melbourne. These were very effective in
overcoming the feeling of isolation for the non Melbourne staff, given
that most showrooms only had two employees. The salespeople were
paid a salary with no commission.
• They had worked with Ian Ross from Ross Bing Swallow (now The
Ross Partnership) for over ten years with a short break, having returned
to Ian one year prior. His expertise in dealing with premium brands
(Bang & Olufsen and Porsche) was of great value, and having briefly
experimented (with disastrous results) with one of the big agencies,
Donaldson determined that the solution lay in educating the relevant
people in the existing organisation to understand the changes that were
being made.
• Based on the mapping Centar had done, they were reasonably happy
with the location of the five showrooms; B&O had been there for many
years and, in most cases, the company also owned the property or had
long leases so it was decided to retain the existing locations and add in
new locations as required.
Weaknesses
• Clearly the range and style of the product was completely beyond B&O
Australia’s control. Bang & Olufsen products are designed and made in
Denmark. The only variations in the products are to accommodate local
power or statutory authority requirements.
• For many years they had had a strict “No Discount” pricing policy with
an occasional special offer on a particular product and they did not want
to move away from that. Given the attitude of the Visible Achievement
mindset to deals and discounts, this could have proven to be a problem.
• Donaldson decided that he would not significantly increase the media

spend. This was partially due to normal budgetary constraints but
equally it was to provide a constant for the purpose of the test. The
advertising budget would obviously have to increase to cover the cost of
the more expensive local creative, but the actual media spend would
remain, initially at least, as for the previous year. Changing from double

page ads to single pages would however allow for an increase in

frequency
Opportunities
• While Bang & Olufsen annually created a world wide print advertising
campaign, Donaldson had for many years been able to argue a case for
locally created ads based on the very low awareness compared to
Europe, and now he had the added ammunition of the aforementioned
research.
The “penalty” was that to create these new ads locally they would have
to bear all the associated costs, which were not insubstantial. They had
previously used photography supplied by Denmark and rarely had to
shoot locally; it was just the cost of the creative.
• Despite the intention to maintain the total media spend, the media
selection was on the table. They wanted to focus the campaign on the
most cost effective media for reaching the Visible Achievement1
mindset reader. They decided to shift from a predominantly business
magazine focus to more leisure and lifestyle. While the business
magazines were certainly read by the target audience, they were
usually in “business mode”, skimming for business related information.
Advertising for non business related products or services were less
likely to be noticed or recalled by the VA.
Threats
• The home entertainment industry world wide was undergoing a huge

revolution with the imminent introduction of digital television and DVD.
Bang & Olufsen was traditionally very slow in bringing new technology
that was not their own on to the market. Following a disastrous decision
(in hindsight) to back the Phillips V2000 home video system against
VHS and Beta, they determined not to invest in new technologies again
until there was a clear market acceptance, preferring to wait for second
or even third generation product to ensure the stability and viability of
the new product.
This meant in reality that Bang & Olufsen was often two or more years
behind the first introduction of a new technology. While the traditional
B&O customers respected and even appreciated this cautious approach,
there was no way of knowing if this would also apply to the new Visible
Achievement1 segment being targeted, or how quickly B&O would
respond to future developments. Their reactions naturally were based
on demand in their biggest market, Europe, whereas Australia often
follows the US, well in front of Europe in adopting new technology.
• A number of brands, especially Loewe, Bose and Nakamichi, had

recognised the potential of design oriented home entertainment
systems. While the majority of the market kept producing black boxes
and technocrat targeted advertising, the fore-mentioned companies
were certainly looking to carve out a share of the design conscious
consumer market, a segment Bang & Olufsen had owned almost
exclusively for over forty years.

Steps to change
Many of the changes referred to here happened simultaneously and it took about six
months before the first of the new ads appeared in print. By then B&O had to ensure
that the organisation was ready to handle at all levels the new type of buyer they were
hoping to attract.
Educate the Advertising Agency

It was determined that it was necessary for all the people at the agency who
were directly involved with the B&O account to understand what they were
attempting to achieve. These were the Principal who was the account manager,
his business partner at the time who was also the Creative Director, the copy
writer and the Media Buyer. Early in 1994 there were two half day meetings
with them and Colin Benjamin to present Values Segments1 and then discuss
how the brand was to be repositioned to make it relevant to the Visible
Achievement1 segment of the market. There was a high level of scepticism
from the agency.
The first ads had to be noticeably different to anything that had run before if
they were to gain the attention of the VA segment. It took a while for everyone
to understand exactly what they should look like. In fact the creative people
had a very fixed view of how a Bang & Olufsen advertisement should look.
They believed that they were better equipped to design the ad than either
Simon Pownall or Colin Benjamin, both of whom were consulted with
extensively, somewhat to the agency’s chagrin.
Donaldson & Tolliday also had ongoing arguments with Benjamin, not so much
over the look of the advertising, but over the amount of copy. They were very
nervous about removing the majority of the text but Benjamin persuaded them
that too much copy would turn off the very people they were aiming for.
Initially the agency mis-interpreted the brief. This came from a

misunderstanding of the attitude of a VA mindset to status and brands. The first
proposals were to leverage off an existing prestige brand. (Brand bribing)
The first two proposals assumed (wrongly) that leveraging off another prestige brand
would appeal to the target audience

They felt that this approach weakened the B&O brand but, more importantly, it
did not correctly interpret the brief.
It was determined that due to the low brand awareness a unique positioning
statement was needed to clarify the offer. In the past, Bang & Olufsen had
used several of these UPS including in the 70’s “for those who discuss taste
and quality before price” (very SA). In many ways the Australian distribution
was still living this view.
The goal was to find a simple tag or by-line that would cement the position of
the brand as the ultimate symbol of achievement. One’s success could not be
considered complete without Bang & Olufsen. Many statements attesting to the
quality were considered but they all lacked authority or left a question in the
mind of the reader of “really?”
Eg Sharp used the tag “Simply the Best” but it is highly doubtful if anyone
actually believed this statement, in the same way as the “Fresh Meat” sign in a
butcher’s window is unlikely to be taken as a fact. After all what else would one
expect them to claim?
After much consideration, and innumerable suggestions by all concerned with

the project, Benjamin proposed “Of course”. This achieved all of the criteria. It
was short; it was a statement, and its meaning was clear, as it implied that
there was no suitable alternative. It also implied general acceptance and
approval which was going to be very important to the new VA audience, as
they are not trail blazers when it comes to status symbols.
After trying a number of ways of combining the words with the logo they
finalised on it being handwritten in a flowing script under the brand name,
because this gave it more of a recommendation status as opposed to a
corporate statement.
The final look of the new Brand sign-off
Meanwhile, by April 1994, following further input from Benjamin redefining the
Visible Achievement 1 mindset and the drivers associated with that group, the
agency had developed a second concept. This focussed on the type of people
a VA may aspire to be and was a variation on the advertising style Rolex had
used successfully for some years.
It needs to be realised that most creative directors, having being given a brief,
generally do not like being directed themselves. Hence criticism of their work
based on quite revolutionary theory is not easily accepted. It is a tribute to Ross
and his Creative Directors, Phil Kinninamoth and later Meg Sorrensen at The

Ross Partnership, that they accepted the level of ‘interference’ which

characterised the creation of the campaign.
The agency’s second attempt, using an endorsement strategy did not take into account
the low brand awareness
Bang & Olufsen had a corporate policy which did not permit endorsement style
advertising. And Benjamin was adamant that it was too big a step away from
where they had been. There was far too low brand awareness for such a style
of advertising to work. The ads had to provide a message of personal success,
and family. The product had to be seen as a natural way of completing a home
environment. And there had to be some copy, inviting participation. The VA
segment needs to establish a relationship before doing business, and the
advertising needed to provide an invitation to participate.
The next proposal in May 1994 involved using existing photography from Bang
& Olufsen (which certainly would have reduced the cost of the campaign).
The third attempt was too “European” and staged to be convincing to a local audience

These were getting closer but it was decided that the interiors must look more
Australian and less European, and preferably there needed to be an SA edge
so as not to completely alienate the SA customers.
However the look of the ad was now quite close to what they were aiming for
and the task was to find a way of showing the product so that it wouldn’t be lost
in a ‘busy” photograph. The agency went back to the sketch book to develop
the idea to a workable format.
From the previous idea the creative team made a series of sketches to define the
layout
The positioning of the logo and signoff was decided and a mock-up created
The sketches proceeded to mock-ups, with interiors sourced from home maker
and design magazines. Because they wanted the purchase of the product to be
seen as an investment for the family there was some debate over whether a
child should be in the picture.

The final decision was that evidence of teenage children could work but the
child, especially a young one, would detract from the message. A dog was
substituted for the child. The target audience was not likely to be considering
home entertainment while focussing on very young children.
Having decided that the overall look was now right, the task was to find a
location that approximated the mock-up and a professional location finder was
given the brief. The photograph was shot in August 1994, seven months after
the initial briefing.
A sunny, renovated kitchen was chosen as the location, the colours being as
far as possible from the cool blues and pristine whites of the previous
campaigns. Because the picture was to be a full bleed to the edge of the page,
a high and light coloured ceiling was required. This would give added impact
and space to the interior and allow the brand to stand out in the top right corner
of the page. A great deal of time was spent on choosing the right models,
clothes and jewellery.
The dog was carefully cast. The breed was important. They chose a Labrador,
a “VA” pet – a significant, safe, clean dog which would share all the family
environments; home, the farm, the beach etc. (Having decided to include a dog
placed an extra challenge for the location finder as obviously the owners had to
be willing to allow a dog indoors.) The picture was to be a snapshot of a quiet
moment in this successful couple’s life.
The main product was very prominent in the foreground because it was
important that it could be seen as a noticeable addition to the room. VAs
wanted to be reassured that their friends would notice the new system. The
loudspeakers were chosen to provide a sense of size and perspective
Meanwhile the copy was being composed. It

begins with a statement in bold type – “Beyond
mere achievement there is always Bang &
Olufsen” Implying that you may well be
successful but there is actually another step on
the ladder and that step is owning B&O. This
was followed by “Sound systems that blend
effortlessly with the finest home, yet unusual
enough to always provoke comment.” I.e. while
they would work in with any décor they were not
going to disappear. Your friends will see what
you have. This also took a direct swipe at the
in-wall and in-ceiling speaker systems often
chosen for the very reason that they were
virtually invisible.
Next were two product sentences, the first to

explain what the system comprised, and the
second a reference to patented technology to
explain/justify the relatively compact size of the
loudspeakers. The tone of both is very much “of
course” i.e. take the design and add some
special technology and there you have it, the world’s finest sound system. By
placing the name separately as a statement it also implies ”of course it’s
Bang & Olufsen”.

Finally there is a challenge. “If you demand the best for your home and your
family, you owe it to yourself to attend a personalised presentation.” This is not
something selfish, it says, but something for your home and your family – the
two most important things in your life - and you would be letting them and
yourself down if you didn’t look into it further.
And they were offering a personalised presentation, not just a demonstration.

The ad carried a 1-800 number with a tailored message on an answering
machine operating outside normal office business hours. The use of a call
centre was debated but it was felt that anyone calling would expect to speak to
someone from B&O and may want more than to just make an appointment.
The call to action was to make an appointment “to see and hear the Bang &
Olufsen difference”. This was again a very conscious choice of words. Many of
the target audience did not see themselves as audio buffs and felt that the
quality may be wasted on them. The ad had to establish that there was a
noticeable difference and all they wanted was for people to hear it for
themselves. This was a far less threatening challenge.
The Good Weekend double page launch version of the first of the new style ad
The first appearance of the new print advertisement had to be a radical

departure from what had gone before to grab the attention of a new audience.
It was produced in a double page version for the initial insertion on October 8
1994 in the 10th Anniversary edition of the Age/Sydney Morning Herald Good
Weekend magazine, which Roy Morgan data had identified as having a high
VA/SA readership.
It was the first time Bang & Olufsen had used this magazine, although the host
papers (The Age & The Sydney Morning Herald) had been the mainstay of its
advertising presence in Melbourne and Sydney for many years.

The left page was almost entirely white space but it contained in bold type “An
invitation to experience the Bang & Olufsen difference and meet the new
Ouverture Sound System at one of our showrooms”. This wouldn’t be a normal
shopping expedition, but one would be responding to an invitation to meet a
new product. It is fair to say that Donaldson and Tolliday were sceptical about
the wording of this but it proved to have been read, as shoppers actually said
they had come to meet this new sound system.
The single page version of the first of the new look advertisements was created to
enable a higher frequency without increasing the overall media spend

Educate the salespeople
At that time none of the B&O showrooms traded on Sunday and so a meeting
was organised on a Sunday in August 1994 in Melbourne for the entire sales
force to attend. With the assistance of Benjamin & Michele Levine from Roy
Morgan Research the Value Segments 1 concept was introduced and
Donaldson explained the rationale for the changes proposed.
It was a busy and entertaining seminar and there was plenty of discussion. Not
everyone was convinced of the validity of this new approach. There was a
great deal of work involved in ensuring that everyone understood the message.
This was a long term plan which would bring significant change to almost every
part of the organisation. To help pinpoint potential weaknesses, each
salesperson was tested to discover which segment they fell into. As was
expected, most displayed a predominantly Something Better1 mindset. (This
Value is often associated with the sales force of Australia.)
Levine and Benjamin talked in great depth about the Visible Achievement1
mindset and what the drivers were. This developed into what type of people did
those with this mindset like dealing with, and it quickly transpired that the sales
team had to make some changes to accommodate this new customer.
By pure coincidence, Bang & Olufsen Denmark also embarked on a new look
for the brand in 1994. Stine Bang, grand-daughter of Peter Bang, one of the
founders of the company, was contracted to humanise the brand
communication. She began by producing a people oriented catalogue
incorporating pictures of real customers in their home environment. It was
intended as a return to the warmer and more poetically inspired communication
of the 1970s and the timing worked in beautifully with the local plans. Australia
was able to offer the new catalogue as a very appropriate supporting tool for
the new strategy.
Two pages from Stine Bang’s new style 1994 catalogue

The work with the salespeople was at many levels and required a great deal of
persistence. This was about changing the selling style of people who had been
working successfully in the industry for over ten years in some cases. They
needed to be convinced that the changes were necessary and would prove to
be more effective than their existing style.
Donaldson Tolliday and Benjamin role-played a number of scenarios to enable

the salespeople to see and then try out new approaches to creating a
relationship with their prospects.
They discussed the need to be able to talk about the business world and be
aware of the happenings in the corporate sector. To help this they sent every
showroom the Bulletin and BRW magazines (both of which still carried some
Bang & Olufsen advertising) and encouraged the salespeople to read them so
they could keep up to date with current business news and have something to
talk about to their new customers.
They discussed the triggers that would help to identify the type of people who
walked into the showroom or made a phone enquiry. They pointed out that a
VA will not dress up on the weekend to go shopping but that in no way
diminishes either their spending power or their expectation of the way the
salespeople should dress. They confirmed their dress code which was to look
less like salespeople and more like business people. And most importantly,
they showed them how to be a person who could make decisions, and
developed a strategy for dealing with discount requests, keeping in mind the
need for people with a Visible Achievement1 mindset to feel that they are able
to negotiate a “deal”. This included no-charge consulting in the home, and
occasionally subsidised cabling for installations. However above all, the level of
personalised service had to be exceptional.
In comparison to Levine’s rational talk on the outcomes of the surveys and

other work that Roy Morgan Research had done, there was a fairly high level of
“shock value” in Benjamin’s presentation and the staff was continually checking
to see if Donaldson and Tolliday were really committed to this “crazy” man’s
ideas. The general response was a high level of scepticism from the sales
people but a degree of curiosity because some of the observations made by
both Benjamin and Levine did seem to them to make sense. This seminar was
followed up with showroom visits by both Donaldson and Tolliday to ensure that
the goal and the purpose of the changes were understood and resolve any
outstanding issues.
They also instigated a weekly incentive for the sales teams based on
showroom performance to budget. The rewards were bottles of wine which
proved to be a great incentive. The salespeople quickly became educated wine
drinkers! The business week finished at close of trade on a Thursday and it
proved to be very important when a bonus was earned, to get the wine
delivered before the weekend. It is difficult to believe how powerful an incentive
the wine turned out to be but it far eclipsed its monetary value.
The team at the Horizon Network kept a close check on what was happening at
the “coal face” by paying regular surprise visits to all the showrooms; Benjamin
would call with very detailed reports of what he or one of his team had
observed. This was both useful and frustrating but it certainly added to the
focus on changing the salespeople’s ways of dealing with customers.

This was not simple mystery shopping. Various researchers would visit and
closely observe how the salespeople were responding to each customer. A
number of the Horizon Network people bought product and then reported fully
on the entire experience including the installation and follow up. Everyone who
was involved from the consulting side developed a real ownership of the project
as they saw the ideas being put into practice.
It was critical that new types of customers were being recognised by the sales
team and not dismissed or ignored. Donaldson and Tolliday learnt to deal with
well meaning but misguided advice, and extract the valuable input, as they
soon realised that they were still the experts in the areas of consumer
technologies and the practicalities of actual high end retailing.
About six months after the launch of the new campaign, another whole-
company seminar was held and some time was spent discussing the results to
date and re-enforcing the value segments message. Benjamin again presented
and this time actively challenged many of the salespeople over some of the
Horizon Network team experiences. The people from The Horizon Network had
made regular visits to all showrooms and provided very detailed reports of their
observations. As might be expected, the sales people were very defensive but
the degree of detail provided made it hard to deny the accusations.
As can be imagined, this had a much less positive impact and it was decided
that in future all the training and coaching had to come from the company. In
this way the company management would be seen as the driving force rather
than some outsider. The Horizon Network’s regular visits and reports continued.
The Results
The first ad was an immediate success. Except for Good Weekend Magazine, it ran as
a full page ad in the same magazines they had used before and with a similar
frequency. A new type of customer began visiting the showrooms, and one of the
repeated comments made by these people was “I see that you have started
advertising”. Clearly they had been completely unaware of the previous insertions.
While there was an increase in store traffic, it was not huge. But the salespeople could
see sales coming from new areas in all states. They reported a noticeable change in
the mix of customers and, most importantly, the yield increased.
Having made significant impact with the first ad they wanted to follow up with
something which was not quite as radical. The intention was to very slowly move back
to a position which would keep the VA segment involved but not totally alienate their
traditional market of the SA/YOs which the first ad certainly had done. Many of the
existing customers had asked B&O what they thought they were doing and seriously
questioned this new direction.
The launch of the Avant television, a fully integrated 28” widescreen television with
video recorder at $15,000, occurred in mid 1995. The Avant was a piece of furniture,
and all the technology, including the video recorder, was hidden. It was determined
that the ad needed to be more targeted at the VA segment. The VA family uses
television much more than the SA’s. It is almost always on, even if not being watched,
and the price could be justified as a reward for the family, compensation for all the time

spent at work etc. They felt that SAs would see it as too extravagant for a television,
especially one of that screen size.
Because of the price point, the location shifted to an obviously more expensive, brand
new house (no art on the walls yet), a richer interior and a lounge room setting.
The first proposal for the Visible

Achievement focussed Avant ad
(above) and the final ad (right)
The people and the product were more prominent and again a great deal of care was
taken with their dress, to ensure that it was in keeping with the environment. The
woman’s prominent crown brooch indicated a slight conservatism and the man could
have been younger than her. A dog was included but this time it was a golden
retriever, a slightly more exclusive breed.
B&O knew this ad would really alienate the

traditional SA customer but they were not the
primary target for the product. However a black &
white press ad was also produced to address the
traditional SA / YO market and it was run on the
front page of the daily press in Sydney, Melbourne,
Brisbane and Adelaide and in the Early General
News in Perth. The strategy worked. Despite the
price and the fact that there was no widescreen
programming expected for five years, the television
was a spectacular success. The advertising also
appealed to the Traditional Family Life1 segment
who could easily project themselves into the
pictured environment and saw it as a furnishing
solution. Due to its price, it obviously had a positive
effect on the yield.
The SA/YO oriented press ad (approx 16cm x 4 columns) for the Avant launch

In October 1995 the third ad in the series was

produced. It was for a modular television/video
system with a price point starting at less than
one third the Avant.
An apartment setting was chosen and a
slightly trendier and noticeably younger couple.
The art on the wall and the Mexican rug
indicated travel and cultural awareness. This
was aimed at bringing back the SA and YO
segments of the market and so the dog had to
be dispensed with. A more intimate level of
domesticity was provided by a carefully
chosen bottle of chardonnay. The models’
clothes and hairstyle were also carefully
selected While the furniture was still VA in
style, the fabric was not; the setting was aimed
at re-admitting the YO/SA segments to the
brand.
The third ad in the new series was aimed at a broader audience
There were increasing problems encountered with using people in the advertising,
because it immediately generated a presumption of what the Bang & Olufsen customer
should look like both with the market and amongst the sales staff. Regardless of the
models chosen, and their clothes, they couldn’t help but create stereotypes, which
amongst other things, detracted from the message.
In April 1996, Meg Sorensen, the newly arrived creative director at the advertising
agency then provided an inspired change to the look of the ads. She proposed that the
people didn’t need to be in the shot as long as there was some evidence that they had
been there and just left.
The proposal for the first ‘people free’ ad

(above) and the actual ad (right )

This solved the problem of the reader’s perception of any individual model which could
significantly impact on the effectiveness of the message. It also reduced the cost of
making the ad as there were no talent fees.
Hence in the next ad the people were not visible but the reader could imagine their
very recent presence – the unmade bed, the tea cup and saucer and the book. It was
a real bedroom and didn’t have the feel of a studio set.
The full bleed look of the earlier series was replaced with a more sophisticated layout
which was aimed at bringing the SA/YO market back and a “play on words” headline
was adopted.
As in the first “kitchen” ad, the loudspeakers were used to show some proportion, but
this time the main product was taken out of the room and superimposed on the
photograph. In the original shot, the product was sitting on a cabinet against the wall
opposite the bed, but it lacked prominence so it was “removed” and a separate shot of
the product was added in.
Meg’s idea worked and so in September 1996 it was decided to use the same
approach to re-invigorate the Avant video system campaign. A mock-up was created
and quickly approved. However finding a real room to shoot the ad in which was in
keeping with the design concept proved to be a huge problem. Eventually it was
decided to approach the photographer of the actual picture used for the concept
development. The almost monochromatic look of the room made it very suitable for
reproduction in black
and white in the press
which was part of the
original brief.
Based on the success

of the previous ad they
knew that the product
did not need to be
actually in the room so
once permission to
use the photo was
obtained it was then a
matter of shooting the
product in a studio to
get the desired angle
and lighting. This had
the added benefit that
the position of the
television could be
changed according to
the size and shape of
each version of the ad.
The intention was to

create a consistent
back-up to the
magazine campaign
which would provide a
The second Avant ad. A B&W press version was also produced

retail response, at the same time re-inforcing the brand positioning from the magazine
appearances. In Sydney, Melbourne and Adelaide the press ads were run on the front
page.
By 1997, other brands, particularly Loewe, had followed B&O’s advertising lead with a
“designer interior” look. Loewe had also adopted “world’s best television” as a
positioning statement soon after B&O stopped using it. The similarity of the layout with
the Bang & Olufsen “bedroom” ad was striking but if anything it re-inforced the B&O
brand.
Because Loewe was such a little known name in Australia at that time the brand sign-
off did not claim ownership of the headline proposition and the picture of the bed and
the “world’s best” headline were easily confused.
The striking similarity of the Loewe advertising to the Bang & Olufsen style
Redesigning the showrooms to deliver the promise
Bang & Olufsen showrooms at that time looked very Scandinavian. They were simple,
clean and uncluttered. This certainly had a filtering effect on potential customers and
provided an immediate indication that Bang & Olufsen was not just another Hi-Fi
company.
Due to the expansion of the product range, especially in television products, a new and
larger showroom at Bondi Junction was required and it was decided to include a very
domestic looking interior. This was in fact the final “cog in the wheel”. The marketing
had been completely revamped, the sales team were up-skilled and it was only the
showroom (where the new type of customers would come face to face with the product)
that needed to be integrated into the offer.
The key B&O elements of the special wall panels and display system were retained in
the front area but the furniture and other elements were carefully selected to lift the
experience beyond that of a normal hi-fi showroom. Behind that were two extra rooms
that were designed to look like a lounge room and a dining room.

A prominent Sydney interior designer who had done a lot of VA style interiors was
employed to do the fit-out and Donaldson and Tolliday worked very closely with her to
achieve a functional outcome.
The aim was to enhance the

listening or viewing experience by
making it appear more like the
home of a friend than a shop. It
was very important that the
customers could identify with the
interior. This meant that every
detail had to be correct, from the
paintings and furniture to the
carpets and wall finishes. The
lounge room became a single
system Home Cinema area
featuring the top of the range
products, and the dining room The B&O wall panels at the front blended with carefully
had a few systems laid out in a selected furniture and finishes to create a very different
very real looking environment. atmosphere
A section of the “lounge” in the new Bondi Junction showroom
The result was a significant and immediate increase in sales through that showroom. It
actually worked as a “mindset filter” in that some people were more comfortable in the
front section and others would gravitate immediately to the two domestic rooms. The
sales people found it easier and quicker to close a sale and the average value of each
transaction also increased.

As a side benefit it was extremely useful in drawing the attention of the salespeople to
interior design, and exposed them to furnishings and finishes of which many would
otherwise have been oblivious. It became common for customers to ask about the
furnishing elements in the showroom and this gave the salespeople another non-
product subject to discuss. The ability to engage customers in non sales related
conversation proved vital to the establishment of trust with the prospective customer.
These new customers were not only spending more, but they were also willing to
spend more often. The timing coincided with the industry push for home cinema and
so instead of just selling a television, people were now interested in additional
speakers and consequently larger sales.
The Avant wide screen television system included a surround sound processor and so
those customers were becoming good prospects for additional loudspeakers and in a
fairly short timeframe. Previously the repeat business cycle had been a frustrating
seven years plus. With the right approach, the salespeople could create an additional
sale to the same customer in a far shorter period.
Of course the salespeople’s ability to correctly identify the customers by Value

Segment1 varied. Many were quick to categorise every big spender as a VA and to
assume that all customers were either VA or SA. As a group the VA segment had
more disposable income than many of the traditional customers and so as the possible
sale size increased, the VAs became more important to them. Some of the successful
sell-ups and the repeat business happened simply because the salespeople saw that it
could. Once they were successful in promoting additional business with these new
customers, they started to use their newly discovered skills on everyone.
One aspect of the change in customer profile was an increased expectation regarding
the level of service offered. While consumers have in general become more
demanding, the new Bang & Olufsen customer saw that their investment in the brand
entitled them to a higher level of service than most. This included site meetings or
installation at a moment’s notice and immediate response to all queries.
Initially these expectations were quite a challenge for the staff to respond to but an
understanding that this was simply a cost of doing more business, enabled a
satisfactory response to the vast majority of them.
Summary
An understanding of Mindsets™ and Value Segmentation1 shows a very clear

correlation between the type of marketing and the type of customers. However it is
important to understand that Marketing is much more than advertising. If the entire
chain is not consistent then the promise made by the advertisements will not be
fulfilled. The strength of the Bang & Olufsen brand lies in the consistency of the
message and it was this consistency that enabled them to capitalise on the true
potential of Value Segments 1.
The Bang & Olufsen Values based activities resulted in an immediate and positive
change in performance in all showrooms.
The success of the VA campaign definitely alienated a portion of the SA customers at

the start but that was an expected outcome; remember that the VA mindset exists in a
greater segment of the market and that segment has a greater ability to spend.

As the series of advertisements progressed they slowly shifted to a style which was
less antagonistic to the established SA/YO customers. A careful choice was made on
a product by product basis for the advertising style and the media used, and this also
helped to reduce “collateral damage” from such targeted campaigns.
Working with the Value Segments 1 is not an easy or a quick fix, and it requires
complete commitment at a senior management level for it to permeate across the
organisation and throughout every aspect of the marketing process. There must be a
clear understanding of both the rationale and the time frame, and commitment by
those at an operational level. Given all of the above, Value Segments 1 is a valid and
proven tool.

APPENDIX 1
A Summary of the Roy Morgan Values Segments 1
In the past it was possible to identify the target audience in terms of birthplace, age,
education and income. Consumer markets could also be targeted on the basis of prior
purchase behaviour. If it was bought last time, “brand loyalty” was assumed as the
basis of future consumption patterns.
With increasing education, income and social mobility comes an increasing degree of
individualisation, a reduced acceptance of corporate values, increasing search for
diversity, difference and personal development. Market behaviour becomes an
opportunity for personal expression, exploration and excitement. These forces
conspire to make the task for the marketing and corporate planners almost impossible
with old instruments.
Demographic analysis of research data can answer WHO is doing WHAT.

Psychographic analysis can provide information on WHY individuals are behaving in
this way.
However individuals are complex and they rarely behave consistently nor according to
the box we may choose to put them in. A broader model of group behaviour needs to
be used if we are to understand some of the most important questions in marketing
today:
• What would change a no decision into a yes or visa versa?
• What factors influence and predict the behaviours?
• What would happen if your marketing approach to one of those factors were
changed?
Some of the factors influencing yes and no decisions are purely demographic - if you
don’t have any money you cannot usually buy something. Psychographics also play a
role; individuals who are image conscious are more likely to say yes to something
which makes a good impression on other people. However, unless you are dealing
with a truly mass market, generic product, these factors alone will not predict a yes or
no decision. We may live next door to, or work with, someone of the same age, sex,
income, socioeconomic group, marital status, education and job description and even
have the same attitudes and opinions, yet still purchase different products.
To develop a predictive model you must also take into the different forces which shape
our behaviour and responses, issues such as Life Satisfaction, Progressiveness, Price
& Quality expectations, innovation, individualism etc and their interaction. You must
examine the pattern of responses and interrelationships of these issues and how this
influences the decision to say yes or no to your product or message. This
interrelationship of issues becomes the map. The areas where these issues interact to
produce different mindsets and responses to issues amongst groups of people
become the individual Values Segments 1. On the following pages, the segments
referred to in this document are described.

ROY MORGAN VALUES SEGMENTS 1
CONVENTIONAL Conventional Family Life is a pattern of thinking most closely

FAMILY LIFE associated with people who represent the core of ‘middle Australia’,
with values centered around the significant events in their personal
and family lives. Within the segment exists the dream of owning
your own home in the suburbs, driving a good, solid car and having
children. Other products, too, must be good, solid, reliable and
value for money.
They choose media that provides light information and

entertainment relevant to their family-oriented life-style. Their
choices also reflect their need to keep a tight control on their
expenses - television, radio and videos attract higher than average
market shares, while media that ‘costs’ - magazines and cinema,
attracts a lower than average market share.
Conventional Family Life television viewing is slightly above average and

they particularly enjoy the excitement of game shows, and the light drama of
how other families cope in soaps. Serious, information-type shows and
ABC/SBS TV attract a lesser market share than average, except for the
evening news which keeps them informed on the outside world and how it
could affect themselves and their families.
While they are light readers of magazines, their interest in the home
and family results in higher than average readership of home and
lifestyle magazines such as Better Homes & Gardens and Family
Circle, parenting magazines like Mother & Baby, and the major
women’s magazines - Woman’s Day and Women’s Weekly.
They are less likely than average to read newspapers, except for the
regional newspapers, a reflection of where this group is more likely
to live - the outer suburbs of the capital cities and country areas -
and their interest in the local community.
Conventional Family Life are also more likely than average to read
catalogues, possibly looking for bargains to stretch their limited
disposable income.
These results come from Roy Morgan Single Source, the world’s largest single source
database, for which approximately 60,000 Australians aged 14 and over are interviewed
face-to-face each year.

YOUNG OPTIMISM Young Optimism is a pattern of thinking associated with young

professionals, technocrats and students who are optimistic and seek
to improve their prospects in life to gain a respected place in
society. They are into image and style (not fads and fashions) and
are also busy planning their careers, attending university and
thinking about the future.
Their nature, interests and educational commitments make them

much higher than average users of the Internet. Young Optimism use
the Internet both from home and educational institutions, mainly to
research topics of personal interest as well as gathering information
for their academic pursuits.
Their interest in learning more and having a broader perspective

also makes them higher than average readers of newspapers,
particularly the major daily and national daily newspapers.
Their selection of specialist magazines reflects a wide variety of

quality interests. They read the magazines oriented towards the
younger market like Rolling Stone, Juice, Cosmopolitan and Cleo,
but they also read Elle, Vogue, Mode and She, reflecting their
interest in image and style. More specialised consumption can be
seen in business, computer, motoring and sports titles.
Commercial TV holds less of an attraction for them and is watched

mostly as a source of light entertainment and relaxation.
Nonetheless, they are attracted to the more sophisticated ‘off-beat’
and ‘witty’ programmes and are interested in science fiction and
fantasy. The evening soaps like Melrose Place are also commonly
watched.
Their highly active social lives are reflected in their higher than
average consumption of video movies and cinema.
Radio is a medium this busy, active group can listen to while doing
other things, whether it is studying, driving or socialising.

VISIBLE Visible Achievement refers to the pattern of thinking associated

ACHIEVEMENT with people who have “made it” in whatever field they are involved
and are confident in their own abilities and position. Despite being
successful, they retain traditional values about home, work and
society. Being highly individualistic, they do not need to prove
themselves or impress anyone. This, combined with their practical
and realistic natures means they are happy to shop at places like
Target and factory second stores.
Their higher than average readership of the national daily

newspapers reflects their desire for knowledge. They also tend to be
heavier than average readers of magazines, particularly business
and finance related magazines such as BRW, Personal Investment
and the Bulletin. Due to their frequent flying, they are also higher
than average readers of inflight magazines.
Considering work and family time as being important, they are only
average viewers of commercial TV. As well as television
programmes which reflect their magazines reading habits - the
business, news and current affairs - they are more likely than
average to watch ABC and SBS programmes. The ‘light’
entertainment programmes - the soaps, game shows and chat shows
- hold little interest for them.
Their commercial radio listening is similarly light, tending toward

stations playing ‘Gold’ and ‘NewsTalk’. They are above average
users of the Internet, mostly for commercial purposes.

SOCIALLY AWARE Socially Aware is usually associated with the highest socio-
economic group - a community-minded and socially active pattern
of thinking which can be found among politicians, public servants
and pressure groups. They are information vacuum cleaners and are
always searching for something new and different and new things to
learn.
For Socially Aware, media provides inte llectual stimulation rather

than relaxation. Quality and depth of information is required, which
results in a lower than average consumption of the more stereotyped
programmes available on commercial radio and TV.
This segment are much higher than average Internet users. Socially
Aware are using the Internet access both from home and work and
using it mostly to gather information for academic and commercial
purposes.
They tend to be light viewers of commercial TV, preferring the

ABC and SBS which offer more programmes that give an
alternative perspective and more information on issues. Their taste
in comedy tends to be more witty and satiric. Video viewing is
slightly above average and visits to the cinema are popular.
They are heavy consumers of newspapers, particularly the national

newspapers and metropolitan dailies which feed their desire for
information.
Socially Aware’s interest in magazines reflects their desire for new

information which is not presented in mainstream media and offers
the cutting edge in new technology and products. Their heavy
readership of national newspapers also makes them more likely to
read magazines like The Australian Magazine and The Financial
Review magazine. They are also frequent flyers and read the in-
flight magazines.

APPENDIX 2
The maps
Note the incorrect nomenclature “Visible Achievers” vs Visible Achievement



APPENDIX 3
The Campaign development
A typical press advertisement of 1992 which ran on the front page of the Sydney Morning
Herald, The Age, The Adelaide Advertiser The Brisbane Courier Mail and the New Zealand
Herald and in the early general news section of the West Australian

A typical Bang & Olufsen double page magazine ad from 1992

The first attempt – leveraging off another brand


Second idea – an endorsement strategy


The third attempt – too European and lacking a connection with a local audience

The first sketch layout for the new advertisement

The second sketch putting the copy into a panel and bringing the product to the foreground

The third concept where the sign off was moved to become the headline

A mock -up for the location finder to work towards

th
The launch version of the new ad appeared in the Good Weekend magazine 10 anniversary
edition both in Sydney and Melbourne

Single page magazine version of the first new ad for ongoing use

The mock-up for the location search for the first TV ad in the new style

The final ad for the Avant television – the second in the new series

1
The press ad for the new Avant TV aimed at the Socially Aware segment

The third ad in the new series – a less expensive product and aimed at a broader target
audience

Mock-up for the first “people free” ad

Final of the first “people free” advertisement for the second series – 12 months after the
relaunch

Imitation is the sincerest form of flattery?

The second advertisement of the new second series


The ‘living room” in the new Bondi Junction showroom leading through to the “dining room”,
1
both aimed strongly at the Visible Achievement segment and a significant change from any
previous attempt at a demonstration room

Re-Position A Brand or B O

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THE BANG & OLUFSEN CASE STUDY –

Using the Roy Morgan Values Segments 1 to re-position a brand

By Colin Benjamin, Michele Levine, Simon Pownall & Stuart Tolliday

1 Developed in conjunction with Colin Benjamin of The Horizon Network

THE BANG & OLUFSEN VALUE SEGMENTS CASE STUDY

Page 2 © Roy Morgan Research 2005

So despite a relatively low turnover, the Australian operation had a disproportionate

The impetus for change

Page 3 © Roy Morgan Research 2005

Analysis of existing customers.

Because Australia is largely a classless society (in comparison to other western

Page 4 © Roy Morgan Research 2005

Eventually Centar was given a relatively clean database consisting of approximately

Page 5 © Roy Morgan Research 2005

So Centar found it had to make many runs using a combination of techniques to

Each postcode was rank ordered by:

Raw customer numbers

Page 6 © Roy Morgan Research 2005

The Visible Achievement1 segment represented some 14% of the Australian

Page 7 © Roy Morgan Research 2005

Unfortunately YOs usually do not have the spending capacity of the VA or SA

The headlines were self congratulatory which provided an element of exclusivity so

Page 8 © Roy Morgan Research 2005

A typical Bang & Olufsen double page ad from 1992

Page 9 © Roy Morgan Research 2005

Decision to change approach

Page 10 © Roy Morgan Research 2005

• There were many customised systems in place and a fully documented

• There was a computerised prospect database that was constantly being

• Donaldson had invested heavily in the frontline people. They dressed

• Donaldson decided that he would not significantly increase the media

Page 11 © Roy Morgan Research 2005

page ads to single pages would however allow for an increase in

• The home entertainment industry world wide was undergoing a huge

• A number of brands, especially Loewe, Bose and Nakamichi, had

Page 12 © Roy Morgan Research 2005

Educate the Advertising Agency

Initially the agency mis-interpreted the brief. This came from a

Page 13 © Roy Morgan Research 2005

After much consideration, and innumerable suggestions by all concerned with

The final look of the new Brand sign-off

Page 14 © Roy Morgan Research 2005

Ross Partnership, that they accepted the level of ‘interference’ which

Page 15 © Roy Morgan Research 2005

Page 16 © Roy Morgan Research 2005

Meanwhile the copy was being composed. It

Next were two product sentences, the first to

Page 17 © Roy Morgan Research 2005

And they were offering a personalised presentation, not just a demonstration.

The first appearance of the new print advertisement had to be a radical

Page 18 © Roy Morgan Research 2005

Page 19 © Roy Morgan Research 2005

Educate the salespeople

Two pages from Stine Bang’s new style 1994 catalogue

Page 20 © Roy Morgan Research 2005

Donaldson Tolliday and Benjamin role-played a number of scenarios to enable

In comparison to Levine’s rational talk on the outcomes of the surveys and

Page 21 © Roy Morgan Research 2005

Page 22 © Roy Morgan Research 2005

The first proposal for the Visible

B&O knew this ad would really alienate the

Page 23 © Roy Morgan Research 2005