Sonance Case

Executive Summary

Sonance has lost valuable market share and margins due to brand dilution after entering

the mass retail market. This has alienated their most valuable customer base, the custom

installers. Now they are faced with the decision to either continue on in the less profitable mass

retail segment or fight to reclaim the higher margin custom installer segment. Sonance should

focus on selling their Original Series in-wall speakers to the production developers and position

the high-end Architectural Series for the custom installers (CI’s).

Situation Analysis: 5C’s

Company: Sonance initially was in a strong market position. When faced with aggressive

competition they moved towards further segmentation. This is where they failed and lost their

edge in the high-end market. Moving into the Mass Market they diluted their brand equity and

alienated their high-end customer base, which in turn drove the high-end market segment into the

arms of their competition. With a Marketing department struggling to find a way to regain

market share, Sonance is forced to play follow the leader with their competition. Sonance is not

without their strengths. Foremost is their Brand goodwill. They have been in the industry for a

long time. They also have an innovative and forward looking research and development team

that is motivated in bringing quality and value to their customers.

Customers: Sonance has various channels of customers: retail, new homeowners and high-end

premium customers. Mass market or retail customers are the most elastic of their customer base.

They are concerned with obtaining the best possible product for the lowest price. They are also

concerned with ease of use and installation. The products targeted at this level of customer are

typically do-it-yourself installers. The next target market is the new homeowner. This market

segment is extremely price sensitive. They are concerned with aesthetics at a low price. They

usually...