EME End Term Assignment

Saksham Bhagat
Section-D
Roll No. 20220404034
9560580724
 A. Company brief with the latest update
  
Boat is an Indian consumer electronics and lifestyle brand. They started the sail in 2014 when
the founder Aman Gupta and Sameer Mehta saw the need for an affordable audio product
that appeals to today's youth. Aman Gupta, a CA keenly interested in a Marketing role, joined
JBL as a Sales Head in 2012. It was that time when he fell in love with the Audio industry
and started Boat in 2014 with his close friend Mehta. 
Boat designs and markets a wide range of audio-centric consumer electronics products,
including wireless earbuds, wired headphones, wireless speakers, home audio devices, smart
watches, and various mobile phone accessories. It sells a range of wireless earbuds under the
Airdopes brand name. Similar to competing wireless earbud brands and models, the Airdopes
line offers Bluetooth connectivity for proper wireless use and a carrying case with an internal
battery to charge the wireless earbuds when not in use. increase.
Like other wireless headphones, Boat's device doesn't connect to an audio source with wires
or cables. This device has a Bluetooth connection for playing audio from an audio source
(mobile phone, computer, stereo, etc.). In wireless mode via Bluetooth, the Boat headphones
draw energy from a lithium-ion battery built into the headphones. Many of their wireless
headphones come with an extra audio cable that plugs into a standard headphone jack (or any
other audio jack that doesn't come with an adapter). On many models, the battery will not
drain when headphones are connected to an audio source via an additional audio cable.
It offers a range of smartwatches that offer many health modes, fitness tracking features,
calls, texts and social media notifications. Boat’s Wi-Fi audio system comes in a variety of
sizes and shapes, Designed for unique use cases. Its small, underpowered device is more
affordable than the plethora of speaker options that offer loud audio output, long battery life,
and various other features.

B. Customer Segments - Who are the customers? What do they think? See? Feel? Do?
 
● The Customer segment for the brand is the youth who are fitness enthusiasts. 
● They are between the age group of 18-26 living in Tier 1 and 2 cities, who want
affordable products and do not want to give up on the quality. 
● They want their product to be the best; they have aspirations of big brands but know that
with 20% value comes 80% features and don't want to pay that extra 80% for a big
brand name if a smaller brand like Boat offers features at an affordable price.
● They want to relate to a brand as their own, which Boat does beautifully.
● They see how much a brand cares for its customer, whether after-sales service or tech
support.
● They feel cared for if the brand caters to them after the sales transaction, and they hence
because a loyal customer
● The youth of today is a self-marketer for the brand; if their needs are met; hence it
becomes essential for the brand to understand and tap into customers' minds and needs.

C. Value propositions - What's compelling about the proposition? Why do customers

buy, use?
 
Boat started by experimenting with anti-vandal properties to replace Apple's charging cables.
Apple's charging cables broke for no reason and suffered.
It seized the opportunity and stepped up its game by creating an indestructible charging cable
for Apple devices. So, they entered the market with a unique product that solves a customer
problem. From there, the company began developing products such as headphones and
earbuds. It was reliable enough to be worn while exercising or training. These products
became popular among younger generations interested in fitness.

One of the biggest parts and reasons for the brand's success is its pricing strategy. It's neither
extremely expensive nor incredibly cheap, just targeting the sweet spot. Apart from the brand
being affordable, special attention is paid to the quality of the products

D. Revenue Streams - How does the business earn revenue from the value
propositions?

After Apple announced Airpods in 2016, if you look closely, interest in wireless headphones
suddenly increased in the same year, with three big things happening. The Jio wave hit India
in 2016, and Indians' screen time skyrocketed. Most importantly, many phone makers have
stopped shipping headphones along with smartphones. When they do, these headphones are
the most straightforward version on the market, and all three factors were created. A massive
demand for wearables in India. In 2017-2018, many companies started to enter the wearables
market. Look at the price charts of the most popular brands in 2018.

There were following given segments:

Segments Price Range Brand
Ultra-Premium 15,000+ Bose, Apple
Premium 10,000-15,000 JBL
Sub-Premium 5,000-10,000 Sennheiser
Economy + Affordable 1,000-5,000 Mivi, Skullcandy, Noise,
Boult, Boat

Skull Candy was only popular with die-hard fans and a minimal audience segment, while
other brands such as MIVI and Bolt were largely unknown in the market; Boat launched
Hardik Pandya in 2018 and became much more popular, and this is where the power of
celebrity endorsement came in. Endorsements brought desirable value; Hardik Pandey's
endorsements established Boat's desired value as a brand by default.
As a result, Boat has become much better known than the 2,000-2,500 Rupees category
counterparts. It has two kinds of value: Tangible and perceived value. Tangible value is the
actual value of the product. Because if the audio sounds great in headphones, it has real
excellent value, and as the name suggests, perceived value is based on how the earphones are
presented and judgment of the product.

Let's see how this aspirational value helped them:

Because of celebrity endorsement if Boat can charge an average premium of just 200 rupees
extra per product.

16.6 million TWS shipped in 2021 in India

Boat = 35.8% market share

Boat total shipment = 59,00,000 units

Assuming = Rs 200 Avg premium/unit

Extra revenue = 200 X 59,000,000 = 118 Cr

Profit in FY 21 = 78.6 Cr.

This is the power of building a perceived value in a crowded, commoditized market.

E. Key Activities - What uniquely strategic things does the business do to deliver its
proposition?
 
To sell the products' sturdiness, Boat made athletes wear them and work out in the
advertisements; this proves what they are attempting to deliver to its audience.
From the very first, Boat targeted advertising through digital marketing and social media. It
took up the social media influencer approach to sell the products. They also targeted major
celebrity cricketers like Rishabh Pant, Shikhar Dhawan, Virat Kohli, and Shreyas Iyer, who
today's youth followed and could relate with. Hence, these celebrities became a part of the
boat promotion campaign who now promoted Boat, all at once.

They didn't stop here. Next were Bollywood stars Kiara Advani, Kartik Aaryan, singer Neha
Kakkar and Diljit Dosanjh were part of their celebrity list. The specific focus on athletes was
to promote their brand among youngsters.

Apart from all these, the brand collaborated with Lakme Fashion week in 2019, promoted its
merchandise, and portrayed itself as a lifestyle brand instead of a digital one. With the growth
in merchandise space like smartwatches, speakers, and wearable devices, it successfully did
the same.
These collaborations with other brands and movie labels are preferred and loved by
youngsters; hence, Boat is loved amongst them. Recently, Boat has collaborated with Bira 91,
marvel, and various other brands, and boat products can be seen in Bira's video.

IPL
This is a great opportunity for Boat. Their exclusive collection includes earphones, available
for the IPL cricket team squad in all different colors. The company seized an opportunity to
grab the attention of cricket fans and persuade them to make products for their favorite teams.

The Marvel collection

They have launched the latest collections for the Marvel fanbase: collections of Iron Man,
Captain America, and Black Panther offer a special collection of earbuds, headphones, and
speakers for his Marvel fans.

Independence Day
A manufacturing department was established in India to contribute to the vision of Make in
India. They focused on his Atma Nirbhar Bharat mission and took the perfect opportunity to
announce the launch of various new products.

The Masaba collection

As soon as the Masaba Masaba Web Series was launched, they jumped at the opportunity and
released a limited collection. This included their sound with the vibrant style of Masaba
Gupta. It also integrates the fashion theme of the web series.
Experiential marketing
Boat gives people an unforgettable experience through concerts. The photo booth, the
Nirvana Zone, was the most common element of two-way communication and audience
engagement found in all these partnerships, concerts, and tourswereZone. A place where an
audience is invited to participate. By sharing audience stories on their official Instagram
page, brands have built emotional connections and gained loyal followers. In doing so, they
created a stir and gained media coverage.

The takeover tour - 2020

Concerts are with musicians like AP Dillon, and there are takeover tours. To date, five
chapters of his have been completed in different cities across India, including Mumbai,
Chandigarh, Goa, Gurugram, and Hyderabad.

The sunburn festival in Goa – 2019

Artists such as Tyga, Yellow Claw, DJ Snake, and Wiz Khalifa performed at the festival.
Boat has also collaborated with big labels like T Series, Lakme Fashion Week Show, Dolby,
Kings XI Punjab, Delhi Capitals, and Brut.

It combines influencer marketing and brand associations with sports teams and public events
to promote its products and calls its brand influencers "BoAtheads."

F. Key Resources - What unique strategic assets must the business have to compete?

● Whenever we launch a product in a crowded market, we try to find a way to stand out in
the presence of big guns. Pricing worked for Aman Gupta as he found the exact
price bracket, which was empty, and captured the space with his offering.
● Celebrity endorsements may seem like a waste of money in some cases, but even today,
they can be a game-changer for crowded merchandise.
G. Cost structure- What are the business' major cost drivers? How they linked to
revenue? 

The cost drivers are:

● No. of set-ups
● Setting up a manufacturing plant
● No. of Machine Hours
● Import Duties
● No. of Processed Orders
● No. of Orders Completed
● No. of labor hours
● No. of deliveries

H. Fundraising status – Bootstrapped / Angel / VC / IPO etc? 

According to reports, it intends to launch an initial public offering (IPO). The business hopes
to collect between Rs 3000 and Rs 3500 crore with its maiden offer. According to Economic
Times, the consumer electronics business will be valued at around $1.5 billion after the IPO.
The Economic Times also said that the company's management has started talking to
investment bankers. The IPO mandate will be signed in a few weeks. There are still some
unknowns regarding the primary and secondary shares that will be sold as part of the IPO.
Several investors, including Warburg Pincus, Qualcomm Ventures, and Fireside Ventures,
are now supporting Boat. The largest investor in Boat is Warburg Pincus, with a 30% interest,
followed by Qualcomm Ventures and Fireside Ventures. The last two investors hold less than
5% of Boat.
 

I. Your take on the startup

The company has a high share in the portable audio market and is now focusing on personal
care and smartwatches, rapidly expanding its product line. It has acquired two companies,
Tagg & KaHa. KaHa is a Singapore-based startup that develops smart wearable IoT (Internet
of Things) devices. This acquisition helped boat develops more innovative products. Tagg an
Indian electronics startup founded in 2016 with smartwatches, headphones, and speakers. A
pure bootstrapped company founded by Rohit Dhingra, Amitesh Bharadwaj, and Saulav
Prakash.

Most Boat products are made in China by third-party manufacturers. In 2020, companies
faced many problems when importing products from China due to the dispute between India
and China and Covid-19. To solve this problem, they have set up a 50:50 joint venture with
Dixon Technologies under the PLI program to manufacture some BOOT products in India.
But that still doesn't solve the problem in the short term. Manufacturing in India is expensive,
and by 2024 around 50% of Boat products will be manufactured in China.

Boat has held up well even in this highly competitive field with established traditional payers.
It has carved out a quarter of the wearable industry's market share in such a short period. It
also has many challenges, so time will tell if Boat will continue to grow or decline.
References
1. Bhandary, Damini. “Boat Branding Case Study: How boAt Captured the Audio Market.”
StartupTalky, 1 February 2022, https://startuptalky.com/boat-case-study/. Accessed 16
September 2022.
2. Gupta, Aman. “BoAt (company) - Wiki.” Golden,
https://golden.com/wiki/BoAt_(company)-9MR3. Accessed 16 September 2022.
3. “The Success Story & Business Model of BoAt.” Finology Insider, 23 May 2022,
https://insider.finology.in/entrepreneurship/success-story-boat. Accessed 16 September
2022.