Onkyo is a manufacturer of home theater systems, headphones, speakers, and hi-fi components. The journey of a potential Onkyo customer begins with awareness in one of their trade show exhibits, the next stage is consideration when compared with competitors like Bose, Sonos, and Vizio, then the customer can purchase any of their products online or in a showroom. The last stage is service which is also the post-purchase experience. Onkyo constomers can learn about their warranty and ask questions via email or phone call. Onkyo's target market includes millennials; who want to connect with a brand and Gen Xers, the conservative spenders. So far, Onkyo has established external partnerships with over five brands. They have also manufatured up to ten new products within the past year to keep up with trends and recent technologies.
As requested, information on Onkyo USA pertaining to competitors, target market, customer journey, industry, and company analysis has been gathered. In reference to target market, while we attempted to focus on consumers in their early 20s to mid 40s, we found that reliable news sources such as the Pew Research Center categorize consumers by generations alone. Thus, we proceeded to do the same and zero in on millennials (22-36) and the generation X (37-52). Every other information was found by utilizing official websites, press releases, and publications.
ONKYO USA key buying stages
Onkyo is an electronic company that manufactures and sells home theater systems, headphones, speakers, and hi-fi components. The industry standard stages representing an Onkyo customer's journey are provided below:
- Awareness: Onkyo regularly participates in trade show exhibits. In 2016, they participated in the Custom Electronic Design & Installation Association (CEDIA) to increase brand awareness and feature their main products. They also partnered with "Timex Multisport Team to become the exclusive performance headphones sponsor for [athletes] in the 2018 season." These and more are some of the ways consumers learn about their products. While they haven't put out any recent TV ads in the US, it appears the aforementioned methods work for them as evidenced by their strong presence in the media.
- Consideration: With competitors such as Vizio, Sonos & Bose, consumers are presented with a lot of options. Onkyo stands out because of their "well-deserved reputation for innovation in the home theater category [and] adding Sonos’ functionality to their line-up of premium brands.” Less than a month ago, the Onkyo HT-S7800 was ranked by Business Insider as the overall "best home theater system you can buy."
- Purchase: Onkyo products can be purchased in any of the six specialty audio showrooms listed on their website (Abt, Safe and Sound Crutchfield, One Call, Electronics Expo, and Hidef Lifestyle). They can also be gotten at in-store showrooms including Best Buy, Worldwide Stereo, and Walts. Alternatively, one can buy their products exclusively on their website or on Amazon, Accessories4less, and more. They caution customers to not buy their products at unauthorized dealers like Infiniti Electronics and Bass Buys amongst others. The full list can be found here. Customers need to register their products after purchasing for warranty purposes.
- Service: Their products have a warranty period of 1-3 years (parts and labor). Onkyo has a forum where staff and other product owners can respond to inquiries and general questions. Their customer service phone line is another quick way to reach them. One can also email them and get a response "within 24 hours or the next business day." Recently, some of their customers experienced an issue pertaining to "loss of audio/network connection." In May 2018, Onkyo issued a statement expressing their apologies, they also launched a 'special Customer Care Program' to directly address the issues and offered extended warranties. Based on reviews, it appears their customers are repeat purchasers, with some alluding to being customers for over 20 years.
ONKYO Target Market Analysis
- Millennials: This generation is described as those between ages 22 to 36. "Older millennials have higher incomes, with 25- to 34-year-olds having an average household spend of $49,547 and households headed by those under 25 averaging $32,179." Generally, professional millennials do some preliminary research (product reviews, post-purchase experience, etc) on their mobile devices before shopping online or in a brick and mortar store. "When asked about the things that influence their purchase decisions, millennials over-indexed for 12 different factors including friends and family recommendations, in-store experience, and even their moods." This can be interpreted as wanting to connect and relate with a brand. Over 82% of millennials consider word-of-mouth as a main influence when choosing to purchase a product. While millennials do not find 'hi-fi' appealing, In 2015, they "accounted for 43% of all dollars spent on headphones" especially with the recent trend of headphones as a fashion accessory. They spend 18.5% of their income on electronics and hobbies which is more than any other generation. Before or after purchasing a product, they prefer to interact with a brand on social media (Twitter and Instagram) if they have any questions and/or concerns. According to the Pew Research Center, 65% of millennials have at least a bachelor's degree and are better educated than any other generation. They are also more diverse in terms of gender and race.
- Generation X: This generation comprises adults between the ages 37 to 52. Roughly 52% have acquired a bachelor's degree. They spend 16.8% of their income on electronics and hobbies. According to American Express, "Gen Xers produce 31 percent of [the] total US income despite representing a mere 25 percent of the population," they have higher incomes in comparison with other generations. While this suggests that they might be more likely to invest in expensive electronics, they play it safe and shop conservatively. This means they need 'proof of [premium] performance' before they choose to buy a product. "To avoid regretting their expenditures, Xers won’t purchase a product until they’ve researched it thoroughly, which is why they make extensive use of search engines, online reviews, and social media networks before making a purchase." Gen Xers appreciate honesty and want brands that have straightforward messages. On average, the household spend of this generation is $66,981. They are referred to as the "small but financially powerful generation." When they find their brand of choice, they stay loyal and tell people about it.
Competitor Marketing Analysis
After understanding the products offered by Onkyo and their target market, we gathered three top competitors based in the US. They include Vizio, Bose, and Sonos.
Onkyo's slogan is simply 'pure sound.' They live up to their reputation by partnering with several other companies. In 2016, Google partnered with them among other companies, for WiFi connected speakers at a Consumer Electronics Show (CES) in Las Vegas. This allowed "consumers to stream music and other audio content directly from apps like Spotify, Pandora and SoundCloud" while also promoting their brand. With the help of brandwerks3, they implemented 'print, website, digital ads, and trade show booths' in order to attract "a younger and more female audience." They also sought out the counsel of Cargo Collection and Gibson Innovations to change their packaging into one that communicates a 'specific message' and "sets [them] apart from competitors while blending well with their existing portfolio." Another advantage Onkyo has over competitors is their range of products. They are one of the few companies that still manufacture and sell A/V receivers & processors, stereo receivers, CD players, and AMPS.
While Vizio is a well-known affordable brand in the television space, they also produce speakers and other sound bars. Still based in the US, In 2016, they were bought out by a "Chinese video streaming company [called] LeEco for $2 billion." The main strategy that led to their success is "the distribution trick that Vizio pulled off at its founding: becoming a value brand at a price-focused value retailer (Walmart), and at the same time positioning themselves as a value brand at quality-focused retailers (Costco and Sam’s Club)." This is in line with their mission of "creating beautifully simple products that redefine smart while putting the consumer first." In 2017, they partnered with Lucasfilm to create a campaign for ‘The Last Jedi,’ the latest Star Wars movie at the time. This campaign had over 90 million impressions. Their most recent TV ad is only 15 seconds and "ends with a clear brand message: Beautifully Simple."
Bose is a renowned company "making sound systems, speakers, headphones and other audio equipments." They are well-known for their diverse kinds of headphones including 'conversation-enhancing headphones,' aviation headsets, and much more. Bose "relies on a low-key adverting policy. The company's main primary marketing strategy is to make its products available to the consumer directly with no middleman or resellers." They also advertise on Amazon and other e-commerce sites. Bose is an official sponsor of the NFL which means they can put out ads whenever there is a game. In 2016, they launched a campaign which encouraged football fans to "to upload videos of themselves performing their team’s chants on Facebook, Instagram and Twitter using the hashtag #LetsHearIt." Not only did they trend on Twitter, celebrities also got involved which led to more brand exposure. Their tagline is 'Better Sound Through Research." They reinforce this by carrying out extensive acoustic research. Their efforts led to creating the "world's first commercial noise-canceling headphones" now used even by professional pilots and 'space shuttle astronauts.'
Sonos Inc. manufactures audio products such as wireless speakers, headphones, loudspeakers, and home theater sets. They are mainly focused on speakers and offer various types with different shapes and sizes. In 2016, they launched a campaign, "You're Better Than This," which featured 'miserable' attempts to use sub-par speakers. Some include using a mug as a speaker and making use of old speakers with long cords that tangle. While there is no information on how many impressions the ad garnered, it was featured on several news platforms including an article by Forbes and several articles by Ad Age. Sonos also partnered with Amazon, Spotify, and Apple music. The Amazon collaboration allows "Alexa to control Sonos speakers." Furthermore, they have 'pop-up experiences with Airbnb.' They are set out to live up to their slogan, "all the music on Earth" by incorporating new technology such as voice-activated smart speakers.
ONKYO USA Industry and Company Analysis
Onkyo segments their products into home theater, hi-fi components, personal audio, and speakers. However, they only feature one type of headphones on their website. Competitors including Bose and Sonos offer a variety of headphones. Perhaps, Onkyo should begin diversifying headphones especially considering their plans to connect with 'younger audiences'. As mentioned previously, millennials are not interested in hi-fi components.
Another technology that most companies, including Sonos, are implementing is artificial intelligence and IoT (internet of things). It appears Onkyo plans to participate in this trend as evidenced by their launch of the VC-FLX1 smart speakers in January 2017 and VC-GX30 Smart Speaker in January 2018. Onkyo could implement machine learning as well, it could help them understand how customers use their products.
In March 2015, Pioneer sold its home theater entertainment business to Onkyo parent company (and Onkyo USA). The integration resulted in Onkyo being the majority shareholder, while Pioneer would be a minority shareholder. This partnership also opened doors for Onkyo USA in relation to more customers and collaborations.
In February 2017, Onkyo USA signed a distribution partnership agreement with AVAD that allows AVAD to distribute their products.
In September 2017, Jason Sausto became the CEO and sole owner of Onkyo USA, there were no other major changes to the relationship/corporate structure between Pioneer and Onkyo USA. However, In April 2018, it was announced that "Onkyo USA vice president of Sales and Business Development Joe Petrillo [was] promoted to Chief Operating Officer, while industry veteran Bob Weissburg joined the company in a newly created position as senior vice president."
In November 2017, Onkyo USA and Pioneer established a partnership with Hearing Components in order "to include premium eartips with the Rayz Plus Lightning-Powered Noise Cancelling earphones for maximum fit and comfort."
Onkyo USA launched two digital audio players (DP-X1A and DP-S1) in May 2017, two Hi-Fi stereo receivers (TX-8260 Network Stereo Receiver and TX-8220 Stereo Receiver) in September 2017, the PD-S10 Digital Audio Player in January 2018, and two AV receivers (TX-NR686 and TX-NR585) in April 2018. In fact, Onkyo USA will be the official headphones sponsor of the triathlon team Timex Multisport Team’s 2018 season. "The longest-running program in triathlon, the Timex Multisport Team consists of 50 triathletes ranging in backgrounds and abilities" who will be participating in 500 races. Onkyo USA has also signed product partnership agreements with Google Cast, Ironman, and Sonos. Their partnership with Sonos means their products are now "compatible with the Sonos® platform, earning the Works with Sonos badge [thus enabling] users to seamlessly stream music from their Sonos app to their receiver allowing them to enjoy music anywhere including their home theater." The Ironman brand "teamed up with Pioneer & Onkyo USA in a multi-year licensing agreement for branded sport and fitness headphones in the U.S. and Canada." The consumer electronics industry is experiencing "obsolete technologies, impatient consumers, slowing demand for products, and technology adoption." Onkyo seems to be on top of these challenges by providing up to par customer service and manufacturing smart speakers that are compatible with Amazon's Alexa and Google Assistant.
To summarize, the customer journey of a potential Onkyo customer begins with awareness in one of their trade show exhibits, consideration when compared with competitors like Bose, Sonos, and Vizio, purchasing any of their products online or in a showroom. The last stage is service which is also the post-purchase experience. Onkyo constomers can learn about their warranty and ask questions via email or phone call. Onkyo's target market include millennials; who want to connect with a brand and Gen Xers, the conservative spenders. So far, Onkyo has external partnerships with over five brands. They have also manufatured up to ten new products within the past year to keep up with trends and recent technologies.