High fidelity

Entering the Bang & Olufsen headquarters in Struer, Jutland, is just like encountering its top of the range audio products for the first time.

The glass and concrete building, dubbed The Farm, is inspired by its surroundings on the shores of the Limjford, on Denmark’s weatherbeaten north west coast. It is a perfect fusion of landscape and manmade structure. Designed by architect Jan Søndergaad of KHR Architects, and completed just a year ago, the new building expresses the company’s underlying ethos: original, but timeless – and design focussed.

Here, in a fairly remote part of Europe, is where the entire B&O identity is created. All products are conceived and manufactured here; some 2000 people are employed at the Struer HQ and another 400 produce electronics at a factory 20 miles away. Many of them are third- generation employees.

B&O was created here by engineers Peter Bang and Svend Olufsen in l925. Both have been dead for several years, but later this year, the company will celebrate its 75th anniversary. How, you wonder, has it succeeded in establishing such a successful brand, with a worldwide reputation for design excellence and quality performance, from such a distant part of the world, in a small country?

“You can take our position from two perspectives,” explains Jan Dalskov, head of marketing intelligence. “As a brand in the audio video industry we are very small. Only a tiny percentage of the population owns B&O products – in Denmark, just 25 per cent of households have a B&O product in their home. From a European perspective, it’s even less – in the neighbourhood of 2.5 per cent – so in the global sense, we are a small company.

“But we have an awareness which exceeds our presence in the market many times over – and that’s because we’ve been the only ones to stand out from the crowd. Our product has so many outstanding facets – quality, durability, efficiency, strong product identity and, of course, a focus on design,” says Dalskov.

That focus seems to be working. In the past four years, B&O has experienced an annual growth rate of 10 per cent. Products are sold through 12 national sales companies, all owned by B&O, and through a number of independent agents worldwide. Consumer sales are through a network of 3500 retail outlets in over 40 countries – some are franchises, some are part owned by B&O. Current sales volume is 3.5 billion Danish kroner (£300 million).

“We’ve been restructuring our retail network during the past four years, mainly in the distribution side. We had too many dealers’ accounts that we did too little business with. So we’ve concentrated on getting a higher presence with fewer dealers, so we can educate them in our ways. It’s not until you have experienced the benefits of the product that you appreciate it’s value. That requires education and training.”

The company is currently rolling out a new retail concept in a select number of key European cities. Called Matchpoint, the concept will be unveiled at its flagship London store in South Molton Street this month, as well as at its Harrods outlet. The first Matchpoint concept store opened in Copenhagen in July l999.

“Our products are surprisingly different and we want our communication to be the same,” says Dalskov. When people experience the concept we want them to say: “This is B&O, they do things differently, but with a reason. We know that our customers’ expectations are higher, once they experience our products.”

Asked to describe the B&O culture, he says that first and foremost it is about innovation. “There’s a drive to try to make sense out of what is possible – and sometimes even what is impossible. We have retrieved values in the company that we’ve had all the way through. But these characteristics are still relevant [today] – poetry, synthesis and excellence.

“Yes, it is an aesthetic concept, but when people see our products, they smile. That’s the poetry coming out of the hard physics. The product itself is something that is unexpected but then you say ‘Yes, why not? Why didn’t anyone else think about this before?'”, he says.

The design setup

Although it employs 2800 people worldwide and has a brand reputation for design excellence, B&O has no staff designers. “We only use freelance consultants,” explains David Leti, B&O’s communications consultant.

The idea of only using freelances started in the 1970s. “Freelances have the freedom to see things from a broader perspective, because they make other things, fridges or chairs, perhaps. B&O started to use external people because it realised that when you work for a company all the time, you begin to think the way the company thinks – the ‘We’ve always done it this way’ mentality. External designers are not bound by that kind of thinking,” says Leti.

At present, Leti says B&O is working with just four freelance designers. “The designer we’ve used most frequently, who designs virtually everything in our product programme, is English, David Lewis, based in Copenhagen.”

“We are probably the only company in our field to use a design suggestion as a starting point for a new product,” claims Leti. “We have a special department called Idealand, which processes the ideas, thoughts and shapes which come from the designer.”

In most cases, the original design changes little during the design development process, although the technical solutions, mechanics and technology may open up or, on the other hand, exclude certain options.

Idealand consists of a team of l2 concept developers who work with the designers to develop the product. There is no chief design head, instead Eigil Thjomsen, Idealand’s Senior Manager, oversees the development teams.

Once the idea is sufficiently developed, it is presented to the board of directors for approval. Then the product undergoes a rigorous series of assessments; research and development staff number around 300, all Struer based. Only after a very lengthy process – which can run into years – is a new product ready for model making and field tests.

Leti estimates that B&O currently has half a dozen new ideas in the workshop, which is a surprisingly large figure when you consider that its current product range comprises 20 concepts – many of which have been updated constantly over the years. “The longer we have the product, the more we learn,” says Leti, pointing to the current best seller, launched in l99l, the BeoSound Overture, a CD, radio and tape unit.

He also cites the longevity of the CX100 passive speakers, which were “launched in l97l and [they are] still profitable.”

“Because our target groups are so specific, we can consciously add or remove certain features. For instance, a Sony TV may have ten buttons – ours will have just three. We edit out, rather than put in features the consumer probably won’t use. We only want to incorporate technology when it will be of benefit to the user,” says Leti.

B&O is often way ahead of its time: for instance, back in l98l, it developed a remote control unit for an entire room. “We decided many years ago to focus on different concepts for different consumer needs. The company will never make a ‘me too’ product,” adds Lenti.

The new concept

Six months ago, B&O set up a small communication strategy group, Storylab, based at Struer, to deliver new concepts, marketing tools, ad campaigns and brand websites.

The Matchpoint concept, also created by Jan Sondergaard, will be seen in London at B&O’s South Molton Street store and in Harrods this month. According to Storylab head, Francesco Ciccolella, Matchpoint is: “A pure expression of our values and the relationship the customer has with our products.”

In the Matchpoint store, the products are set in grooved glass walls around the store, creating a partly transparent effect, in addition to privacy, although the customer remains visible.

From slide projectors discreetly placed in the ceiling, slides are projected on to the grooved glass surfaces, the floor and the white walls. The process creates a series of changing moods as the slides are changed daily; from day to night, or from country landscape to urban skyline.

“This is the communication, the product’s dreams, if you like – the images can be changed every day and as they change, it alters the appearance of the shop,” explains Ciccolella, former managing director of B&O in Milan.

“The London plan is to renovate the South Molton Street premises and the shop within Harrods. After London we will roll it out to Dusseldorf, Munich and Paris, B&O shops where we know that people are used to an urban environment. Matchpoint makes sense in an ideas-led environment, it wouldn’t work so well in small towns.”

Prices are displayed on discreet electronic signs. Flooring is soft, grey rubber, lighting is from Guzzini Lamps, seating is soft, grey suede.

Ceilings are dark blue, half matte. All installations are installed by Struer staff. The new concept will run concurrently with the company’s new European ad campaign. “The subjects change every month – because we never repeat ourselves,” explains Ciccolella.

“Instead of just showing the product, the ads talk about B&O’s attitudes in different statements; we stand out and we challenge norms. Our customer needs an extra dimension in their life and this comes across in the campaign.”

Eric Boas, who runs the Copenhagen Matchpoint store located in Stroget, the city’s busiest shopping area, says sales have increased since its launch last year. “The previous concept – the Bl – was set up like a living room. But with Matchpoint, we’re not telling people how to live, we’re just showing the products,” he says.

Boas has worked with B&O since l962. “B&O designs from the inside, as well as the outside. And time is not relevant to the creation of the product, they believe in doing it right, not fast.

“What is special about B&O is that it is from a small town in Jutland. In that part of Denmark, it has resources that we don’t have here in the big city; it thinks before it does anything. Here we do it first – and then think about it afterwards,” adds Boas.

The UK market

There are l55 B&O UK outlets, of which just 32 are solo shops selling only B&O products, the rest are multi-brand stores. Annual turnover for the UK is currently around £40-50m.

‘It has increased significantly in the past five years, we’ve virtually tripled our business, due to brand marketing and the distribution clean-up,’ says UK marketing manager, Graeme Taylor.