1

Boardless Innovations

Team 19

Holt Linde, Hamilton Spivey, Brianna Walker,

Lauren Thrasher, Drew Davis

Index

Executive Summary: Pg. 3

Industry Analysis: Pg. 5

Target Market Analysis: Pg. 17

Product, Pricing, Distribution, and Promotion Strategies: Pg. 28

Start-Up Costs/SWOT: Pg. 35, 45

Resumes: Pg. 50

Works Cited: Pg. 55

Boardless Innovations

Contact: Holt Linde, CEO

(615) 779-3546, hlinde@samford.edu

Boardless Innovations offers a set of high quality, wireless studio headphones that work in tandem with an app and a wireless signal sender. Instruments are plugged into the signal sender, and the sound is sent to the app and the headphones. Our industry is electronic equipment, specifically audio equipment. The audio equipment industry has recently taken a large turn for the better when Beats by Dre was introduced to the industry in 2008.

The app acts as a downsized studio soundboard; however, the headphones have small, retractable knobs on the ear cups to control each individual instrument’s sound level in order to hear the nuances of the music. Up to 6 individual instruments can be controlled, and any combination between 1 and 6 instruments can be used. For instance, if the music producer wanted to tune out everything but the singer and the piano and see how just the two sounded together, he could use the respective retractable knobs on the ear cups to hone in on those two. The major benefit of this product, dubbed the NewBI, is that it is specifically designed for the musical artist. The NewBI provides a much more efficient and cost effective way for new artists that cannot afford to pay for expensive sound equipment and studio rentals, to record music.

CEO: Holt Linde. Holt is from Nashville, TN, and is an entrepreneurship major at Samford University. He has entrepreneurial experience from founding and running his own pressure washing and sealing business, starting back in 2010. The business was very successful, allowing him to purchase his first car and a round trip ticket to China, and because of the experience, he knows how to lead others to success.

Marketing Manager: Brianna Walker. Brianna is a marketing major and Spanish and Latin American studies double minor at Samford University and plans to graduate in 2016. She is from Buford, Georgia. Although she has not had a lot of formal business environment experience, her work ethic and optimistic attitude bring a positive view to the team, and into the field where she will market our product.

Sales Manager: Lauren Thrasher. Lauren is from Birmingham, Alabama and is studying management and economics at Samford University. Her work experience includes retail sales and marketing management, specifically web design and editing, for small companies similar to Boardless Innovations. This past experience is directly applicable to her managerial position at Boardless Innovations in order to help generate sales, since Boardless will be a primarily online business to start.

Finance and Economics Manager: Hamilton Spivey. Hamilton is a freshmen University Fellow at Samford University. Although Hamilton personally does not own a business, his father has been the owner of a small business that has been in the family for three generations, which Hamilton worked at over the summer. Although his experience is predominately in physical labor, he also kept the books and received invoices on a near daily basis.

Administrative Manager: Drew Davis. Drew is an up and coming double major in accounting and entrepreneurship from Dallas, Texas and plans to graduate Samford University in 2016. Drew believes that communication is key to any startup business, whether that is between him and the clients or the co-founders of Boardless Innovations.

The NewBI by Boardless Innovations will serve the new artist market, typically for consumers between 18 and 40. There are several competitors for this market who sell high quality headphone as well: Beats by Dre, Bose, Sennheiser, and Sony. There are, of course, many smaller competitors, but these are the top 4. When Beats by Dre was introduced in 2008, it redefined what studio headphones are to the consumer. Boardless Innovations looks to do just that; no longer are headphones simply pieces of technology, they are pieces of art. The NewBI reaches the niche of new artists that cannot afford expensive equipment or rent out professional studios. By downsizing the studio soundboard onto a tablet or phone app and syncing it with our headphones, the NewBI provides a way for the artist to produce music cost efficiently and take his tools with him or her wherever they go. While there is not a way to measure the exact amount of new artist and music producers in an area, we can say that approximately 21% of all headphones purchased are high quality, meaning $100 and up in price, studio headphones, and that sales in our market increased by 73% in 2012 (Sanburn). An expert analyst of the industry, Ben Arnold, states, “We're likely to see the premium-headphone market continue to grow, and as more companies chase the opportunity, differentiation will be key” (Arnold). The growth in sales will not be settling soon, and a vastly growing market is profitable to jump into.

Industry Analysis

Industry, Size, Growth, and Segments

There are approximately 1,735 sound recording studios in the United States in 2013, which shows a growth of 1.8% from 2012. Revenues generated by the industry in 2013 total to more than $52 million dollars which is a growth of 1.5% from 2012. In addition, there are approximately 1,677 establishments in the sound recording industry today. The 2011 estimated number of employees in the sound recording industry was 8,204. The total sales made by the sound recording industry totaled to $850.2 million dollars (BARNES Reports).

The music industry has moved away from the production of CDs and has instead focused on digital tracks. “According to Nielsen SoundScan's year-end tally, the U.S. music industry, including a continued healthy growth of digital track sales that indicates a steady long-term turnaround for the business” (Christman). There was a sale of 111.7 million digital tracks, showing a dramatic change from the 93.1 million albums sold in stores. In addition, Digital tracks are 37.2% of album sales. Along with digital tracks, the sales of headphones have increased by 20% (Malester). Headphone sales are up because of the improvement of technology making noise-cancelling, more stylish headphones. Also, headphones are becoming more useful because of the new serge in wireless headphones, which allows the consumer to listen to music without the hassle of wires. The growing percentage of headphone sales along with the rising sales of digital tracks makes the industry that Boardless Innovations is planning to go in very profitable. The most important factor of our product is that it is a product in the headphones market that directly correlates to the music recording market; in short, it is a product for the recoding industry. So, as revenue rises in the recording industry, it is likely that Boardless Innovation’s headphones will trend upwards as well. Our product is meant for consumers wanting to create music, but at the same time simply be used by the general consumer in order to increase sales.

"So much recording is being done in nonprofessional studio environments that the [majority] of work that's being done in the big studios is upper-echelon artists. The midlevel studios are really having a hard time. It seems like every record I work on, some portion of it is being done in somebody's home or garage" (Verna). Independent artists have an average profit ratio of 27:1, because they do not have to deal with the costs of producers and studio fees (Cedeno). When an indie rap sensation was asked how he likes being an independent artist, he answers by saying that “When I was coming up in the labels there was always someone telling me what to do. It wasn't/isn't creative. It's almost like you're a robot and just boring because they're trying to make hit singles instead of good songs.” (Knapp). From the optimistic data found in these industry segments, it is obvious that Boardless Innovation’s product, one that downsizes the soundboard into something portable relatively inexpensive, will in turn make music production easier and faster for the aspiring, independent producers and musicians.

Macro-level Trends

From a demographic perspective, a few factors make entry into the sound industry unsettling. According to U.S. census data the entire U.S. population from 2000 to 2010 increased from 281.4 million to 308.7 million, a rate of roughly 9.7%. In comparison, the percentage of Americans sixty-five years and older increased 15.1%. Since the main consumer of Boardless Innovations’ product will likely be well under that age category, at first glance it appears to be a shrinking industry (Werner).

Further data from the Census at first seems to support that claim. The total percentage of the U.S. population of our target market, ages 18-44, decreased from 39.9% of the population to 36.5%. Although the percentage changed, we still saw an increase in the number of Americans in our target demographic of 0.6% despite the shift in the overall age demographic. Even though as whole our target demographic is decreasing in percentage of the total age demographic, in terms of direct numbers our demographic is increasing in size, albeit ever so slightly (Howden).

Table 1

Total

Percentage

2000

112183705

39.9

2010

112806642

36.5

Table 2

Direct

Percentage

Change

622937

0.6

Since our product is not a necessity and more of a luxury, it is important that our potential customers have disposable income in order to consume our product. As a whole, personal income over the past two years has been on the rise. Even though, in the past few months, personal income has not been rising at a great rate, it is rising nonetheless (Economics and Statistic Administration).

Another factor surrounding the disposable income of our target market is fluctuation of inflation as seen in the CPI-U-RS Index taken from U.S. Census data. While the CPI-U increases at a rate of between 1.02% and 1.04% annually (Figure 3), growth percentage in personal income has increased by a 3.4% average annually over the past two years from the data in Figure 1. Since Personal income has been increasing at a rate three times that of the CPI-U-RS index, consumers should have an increase, even if it is only a slight one, in their disposable income (U.S. Census Bureau).

Since it is manufacturing will be a major factor in the production of our product, trends in manufacturing will likely affect Boardless Innovations production cost. As can be seen in Figure 4, manufacturing productivity has been on the rise whereas hourly compensation for workers and unit labor costs have been fluctuating over the past few years (U.S. Bureau of Labor Statistics).

Figure 4

Since Boardless Innovations uses technology in all of their products, the technological trends directly affect the company. The increasing use of social networking sites among the targeted age range of 18-44 adds to the increase in internet use in general. Also, the new technological advances cause more people to use the internet because it has become faster and easier. Lastly, the table by Talukdar shows the trends of internet usage based on different socio-economic variables.

Relative Likelihoods for Internet Access and Daily Usage between 2002 and 2008: Summary of the Findings from our Empirical Analyses

Socio-Economic Variable

Internet Access

Daily Internet Usage

Income

The likelihood for a richer person increased from about 40% more to about 60% more

The likelihood for a richer person remained the same at about 25% more

Education

The likelihood for a college graduate remained the same at about 7 times more than that of one without high school degree

The likelihood for a college graduate jumped from about 4 times more to about 5 times more than that of one without high school degree

Gender

The likelihood for a male remained the same at about 30% lower

The likelihood for a male remained the same at about 25% higher

Race

The likelihood for an African American decreased from similar level to about 60% less than that of a White American

The likelihood for an African American remained the same at about 35% less than that of a White American

Age

The likelihood remained the same at about 5% less for each year increase in age

The likelihood remained the same at about 3% less for each year increase in age

Residential Location

The likelihood for an urban resident increased from similar to about 40% more than that of a rural resident

The likelihood for an urban resident increased from about 30% more to about 80% more than that of a rural resident

(Talukdar 93).

Competition

The competitors for Boardless Innovations are a variety of high-end competitors that excel at different things. The main competitor is a company called AKG. The AKG K 702 model ranked among the top two in the Best 5 Studio Headphones Between $350-$500 Comparison Test in August 2012 by Los Teignos, Red Led, and Will Zegal, the three editors of the online musician’s magazine, Audiofanzine. In reference to the strengths of the K 702, Red Led stated, “They are certainly the most linear headphones we ever reviewed and the dynamic range is just amazing. They reproduce every detail of the signal very accurately, which makes them perfect for mixing. Moreover, they are light and comfortable. They feature replaceable ear-cup cushions and a replaceable cable thanks to the mini-XLR connector.” This brand is recommended for extended wear. The only reported weakness of this pair is a shy low-frequency range (Zegal).

Another great competitor in this industry is Beyerdynamic. Their DT-880 Pro model, retailing for just below $300, is designed for picking up a wide range of frequencies and producing a very detailed reproduction of every instrument in a mix. This pair is commended for being the most comfortable on the market currently. Great strengths of this brand include that they are packaged in padded aluminum storage cases and come with accessories, like a 1/4-inch adapter and a 15-foot extension cord. A weakness of the DT-880 Pro is that the pair is not compact and is kind of bulky. Also, the pair is reported to heat up after prolonged use (“Studio Headphones”).

The Ultrasone Pro 2900 also ranked highly on the Best 5 Studio Headphones Comparison Test. Ultrasone shed new light on the market of pro-audio headphones with unique product designs, making them more appealing than competitors. The Pro 2900 model is the exact opposite of the AKG due to its extremely non-linear frequency response. A major strength of this pair is the reproduction of deep low-end and sharp high-end frequencies. This product does not specialize in comfort, and users report them being heavy and the ear-cup cushions falling down. This pair, unlike the ones previously mentioned, is not designed for extended wear, which could be viewed as a weakness (Zegal).

Audio-Technica makes a pair of studio headphones called the ATH-M50 Professional Studio Monitor Headphones. These offer a sturdy build and excellent audio quality. The ATH-M50 is sold for less than $200, a relative bargain. The low price is due to the fact that they are closed back, and open back headphones are preferable in mixing and producing the most realistic sound. Another weakness of the ATH-M50 is that they sometimes require mixing software to simulate the sounds in different listening environments, whereas open back headphones do not. This would narrow their market, making it less appealing to professionals in the industry (“Studio Headphones”).

Sennheiser is also a big competitor in this market. They make professional studio headphones ranging from less than $200 to $1,500, with varying capabilities and features. A major strength of this brand is that it is highly regarded in audio circles for its detailed yet neutral sound and for bass extension. The design of the different models, including the HD280, HD598, and HD800, is sleek and sturdy. Although they offer a wide price range on these handmade headphones, users report this brand to have strong mid-tones and weak highs and lows. A weakness is that these headphones take on the reputation of being over-priced and lesser sound quality (Isaac).

Standardization

Headphones, themselves, are standardized, but the niche that Boardless Innovations serves allows the company to differentiate from the competitors. Our product, a portable personal studio, is the first of its kind. It will be offered in two standard packages in order to make production simpler. The first package will consist of the headphones by themselves in order to cater to the public at large. The second package will consist of the headphones, the soundboard app and the wireless transmitter for the instruments; this package is meant for consumers who want to create music in a simple, inexpensive fashion. While other competitors dabble in large soundboards and thousands of dollars worth of equipment, Boardless Innovations gives the consumer a personal soundboard and stereo wherever they go. The majority of headphone producers such as Bose or Sony offer a product that is bulky, wired, and one dimensional in purpose. Boardless Innovations will differentiate themselves by making a product that is wireless and allows the user to not just listen to music, but also make music. This is a niche market in and of itself; our headphones are tailored for makers of music.

Barriers to Entry

Five large companies, many of them featuring products that are endorsed by celebrities, currently dominate the music recording/tech industry. One issue is that these large corporations have a major hold on retailer shelf space nationwide. This shelf space is something that Boardless Innovations hopes to compete for after building the business online. Our second barrier would be establishing a name for our product and infiltrating the music media market of tech retailers. By establishing our product at a college like Belmont University, a music and art school, our name could expand slowly but efficiently. Through live demonstrations and indie band sponsorships, we would be able to reach our intended customer, the individual music maker. Over time, we can begin advertising on social media sites and music URLs such as Facebook, Twitter, and YouTube.

Key Success Factors

In order for Boardless Innovations to succeed, the company will need a lot of exposure to customers because Boardless Innovations is a new brand and must gain the consumers’ trust. This means that the product must be placed into electronics stores such as Best Buy or RadioShack. Establishing trust is a long, arduous process with an end goal that can only be acquired with patience and effective uses of advertising and sampling. Second, our product must stand out visually from the competition from a design perspective. When Beats by Dre was introduced in 2008 with a revolutionary, stylistic design, the headphones market had a 32% increase in revenue from $490 million in 2008 to $648 Million in 2009, and increase in units sold from 59 units sold to 68.7 million units sold, for a 16% increase. This trend continued on a somewhat smaller scale up to the present (Antony). We believe that our product at Boardless Innovations will again revolutionize the market with a sleek, undeniably unique design that captures the eye, and the ear. Finally, exhibiting outstanding, undeniable quality in every aspect of the product, from sound quality to the small details like packaging, in order to maintain high reliability and trust, is perhaps most important success factor for our product. We want the consumer to know that they are getting their money’s worth when they buy our product. This will not be a hard trait to acquire; the only difficult aspect of maintaining trust and high quality is to have a well-tested and incredibly designed product, which could take some extra capital.

Overall Industry

Overall, the music technology industry is very attractive and will be relatively easy to be a successful company. This is true because our product hits a niche market, the wireless headphones market, that has “grown 86 percent year to date, and [is expected to] continue into 2013.” (Johnston). Our product plays directly into this huge increase in a niche market; as it continues to rise, consumers will realize the value and uniqueness of our product compared to other more popular brands, such as Monster’s Beats by Dre or Sennhesier who mainly cater to the staple of wired headphones. In addition, the fact that our product is able to meet the needs of both consumers looking to produce music and the general headphone user, our sales will significantly increase. With the combination of a widely applicable, yet niche-marketed product, and the wireless aspect of the product, profits will be easily attained.

Within the music technology industry, our company will serve the headphone segment and eliminate the customer’s need for other segments, like soundboards and speaker systems. However, our product design will cross segments from high quality studio headphones, to headphones for the general population because of its pricing. Our product will be priced so as to beat out the high quality headphones so that they are affordable to a larger consumer audience, yet still provide a product worthy of the most famous producer.

Target Market Analysis

Target Market Size

According to U.S. census data, a high portion of the southeaster area of the United States is categorized by a median age of 21.9 to 38.5 or 38.6 to 42.1. This age range encompasses the age demographic for our target market, musical producers right out of college to midway through their career. Only a small portion of the southeastern states, with the exception of Florida, contains areas with a high percentage of the 42.2 to 62.7 age range.

Although our target market is not exclusively male, it is likely that males will encompass the majority of our sales. This demographic statistic does not bode well with our potential market. Only areas in northwest Florida and central Georgia have a high concentration of counties with a high percentage of male population. Although this is not a detrimental statistic, it is likely to hurt our initial sales.

Despite the discouraging evidence that the male population is lower than the female population, the percentage of the population that is male shows a promising feature. The percentage of the population that is male in the South-east contains a great number of counties with a median age within our target market. Over 50% of the counties in Tennessee, Alabama, Georgia, and north-west Florida have between 49.2% and 72.1% male population. Areas in south-east Georgia and west Mississippi seem extremely promising.

Another factor which affects the marketing of our product is income. Since our product is a luxury not a necessity, disposable income will be a factory in the consumption of our product. Unfortunately, the median income levels of the geographic area within our target market are not encouraging to our sales. The median income for most of the counties in the south-east region is below the average values. Although our customer base still exists in the area, it will not be as large as it could be due to the economic conditions of the market. The map below shows the median income levels of our target market, the darker the area, the higher the median income. The extreme lightness of south Georgia and Alabama indicates areas that will be more difficult to market to while the darker areas in middle Tennessee and northern Alabama are more likely to purchase our product based on their degree of disposable income.

Along a similar line to the demographic information, the population information also contains positive indicators, for most of the Southeast, net population increase per county has been on the rise as can be seen by the portions of the data map below shaded in green. The U.S. data shown in the map shows that on average, net population has increased, meaning our potential customer pool has increased as well.

According to the U.S. department of commerce and U.S. Census data, there are 77 professional sound recording studios in Tennessee, 66 in Georgia, 14 in Alabama, and 114 in Florida. The high concentration of studios in the South-east, Tennessee and Florida and Georgia namely, suggest a good market in these areas. Only three other states, California, Texas, and Illinois contain more recording studios than Georgia.

Growth Rate

The target market of Boardless Innovations is the southeast U.S, specifically cities such as Nashville, Birmingham, and Atlanta, where a lively music scene is already prominent. Approximately 21% of all headphones bought nationally are in the premium $100 and up price-range, and sales to the target market increased 73% in 2012 (Sanburn). The increase in target market sales can be attributed to “Iconic, eye-catching design […] a big selling point for new brands” (Gallagher). As opposed to the previously simple and ergonomic-focused headphones, Boardless Innovations plans to introduce a headphone design that captures the imagination of the target market and gets the momentum rolling for profits. Expert NPD industry analyst Ben Arnold states that “We're likely to see the premium-headphone market continue to grow, and as more companies chase the opportunity, differentiation will be key” (Arnold). While an exact percentage of growth for the future could not be found by the managers of Boardless Innovations, Arnold continues by stating that, in the future, what will grab the market’s attention is a product that caters specifically to those who record their own music and crave higher quality sound and innovation (Arnold). With a 73% growth increase in 2012, 2013 and the few years after are likely to repeat the success, as the high-end headphones market is relatively young. A survey on Survey Monkey was also conducted, and it was found that about 75% of those who did the survey, or 59 of 77, had bought headphones within the past year, 17%, 13 of 77, of which were in the $100 and up category. The consumers surveyed consisted of people from The Alpha Eta chapter of Pi Kappa Phi at Samford, adults from Nashville and surrounding cities, teenagers, and college students (Linde).

Motivation

The trend in the music recording industry is to downsize and be more efficient in music production: “Production and post- production rooms have been trending smaller over the past decade […] Smaller, cheaper audio equipment has certainly been a factor behind the shrinking spaces, and has also factored into the upsurge in home studios” (Harvey). A customer in the Southeast target market would purchase high quality headphones and equipment because the studio soundboard has been scaled down into something portable, comfortable, and efficient. Customers spend money on upscale musical equipment because music is a part of everyone’s life. Music will change, but never go out of style. The purpose of high quality music equipment is to enhance the user’s musical experience. Consumers today feel the need to have a personal relationship with music, creating a niche for high quality headphones to exploit. A high-quality musical experience is something that can never become obsolete, simply because consumers, with common sense, know that if they want to do a job or enjoy something the best they can, they need the best tools for the job, and in the case of recording music, high quality headphones are that tool.

Direct Competitors

On a local level, one of the largest competitors in the market is Beats Electronics, LLC. From the start in 2008 to late 2012, all Beats products were produced by electronics company, Monster Inc. The headphones line is endorsed by artist and producer, Dr. Dre. This is one of the company’s greatest strengths because being backed by a producer gives them credibility in the music realm. The Beats products have a bright logo and sleek design, allowing customers to buy into a fashion trend while purchasing their product. One of the key success factors in our industry is excellent sound quality, and this brand is known for succeeding at this. The downside to being a celebrity-endorsed company is that trends pass and the demand from fans may eventually be satisfied. Another weakness is that the Beats headphones are not inexpensive, ranging from $100 to $450 (Magnan).

Another source of local competition is a company called Grado based in Brooklyn, New York. Its biggest strength is that it is one of the oldest audio electronics manufacturers in the United States and has been producing high-end headphones since the 1980’s. This brand is known for having one of the best overall sound qualities in the market. Grado offers a wide variety of headphones based on quality, ranging in price from $49 to $1,695, making their products accessible to a variety of customers. Weaknesses of this company’s products include extremely long cords and lack of accessories, like a storage case, to accompany the high-dollar products (Kim).

Bose is one of the largest audio electronic companies in the United States. Their greatest strength is their well-known brand name, which allows them to price their headphones a small percentage higher than other companies. Another positive contributing factor is that they have Bose retail stores and shelf space in electronics stores like Best Buy and Radio Shack all over the country. Bose headphones are commended for excelling in areas like comfort and are less expensive than other competitors, ranging from $59 to $350. On the other hand, the price could be considered a weakness because according to product reviews, the buyer is paying for the brand name more than the actual sound quality. The biggest weakness of their headphones is that they are not considered to be as useful in the process of mixing music because of lower sound quality (Morrison).

Indirect Competitors

Local, indirect competitors to our product would be all sound system developers. Speaker systems, home entertainment devices, and the iHome are all some form of independent music playing device. Although not portable like our headphones, these devices inhibit our product’s sales. These systems are sold at local stores around Nashville such as Target, Wal-Mart, Best Buy and other large electronic retailers. 3 major competitors against our headphones are Bose Sound Systems, Apple’s Garage Band, and Avid’s Pro Tools. Bose’s SoundDock Series III runs at a price of $249.95 and docks a customer’s mp3 device, which then plays music through the attached speaker. Bose prides itself on having the highest quality sounds (New SoundDock). The SoundDock plays through a charging pack thus not always having to be confined to a power outlet, and comes with a cordless remote for changing music. High quality, maneuverability, and wireless technology make this portable music player a highly competitive product against Boardless Innovations. Although the Bose SoundDock has some great features, its major problem is portability. Because the SoundDock is larger than a pair of headphones, it cannot be taken or used on the road or away from home. The SoundDock is also specifically tailored towards Apple products, only being able to charge their iPhone, iPad, iPod, and iTouch. The SoundDock also lacks our products main function, music recording and manipulation through the headphones.

Another two fairly similar products are Apple’s Garage Band and Avid’s Pro Tools. Apple’s Garage Band is free along side the purchase of their computers through their Mountain Lion OX software, and Avid’s Pro Tools is sold in different forms, the least expensive being the Pro Tools 10 software sold for $699.00 (Avid). Both products are integrated into a computer’s software, creating a more high-tech recording experience. Garage Band and Pro Tools are also tailored to the individual music producer who has access to recording gear. Garage Band is tailored to the new music maker; it is a simple product that makes recording and experimenting with music easy. But Garage Band lacks high levels of detail and editing power. Pro Tools on the other hand is a very sophisticated product, and to takes time to master all the controls. Once they’re mastered though, Pro Tools provides a very powerful, in-depth ability to record music (PC Mag). The downside of both of these products is the price and also the lack of portability. Buying a new or used Apple computer with Garage Band can cost hundreds if not thousands of dollars. Independent music producers are not willing to spend the excessive amount of money for an average music-recording program. With Pro Tools, the price is an even larger issue, as their products have been known to rise in price to well of $2000, along with the degree of difficulty to learn how to use the product (Avid).

Product Involvement

Headphones are a medium-involvement purchase for customers. At a reasonable price, our product is a smart, money-savvy buy compared to other competitors in our industry. Our product is sold online which cuts out the independent retailer and creates a more convenient way for our customers to purchase our product. The headphones themselves are a user-friendly product that also creates a sense of music genius. “Product marketing manager David Johns [of Sony] said it realized it was missing out on a key growth segment. ‘What’s captivated the market is fashion design and marketing. They’ve become a true accessory,’” (Gallagher). Johns’ statement gives proof to the fact that consumers seriously consider the details of the high-end headphones they’re purchasing. However, because the purchase only ranges from the relatively low price of $100-$400, headphones cannot be considered a high-involvement purchase like a house would be.

Repeat Customers

Headphones, the most popular category in the CE (Consumer Electronics) industry, continue to grow in demand fueling sales (Future of headphones). This assures that Boardless Innovations is being built in a growing industry that will continue to flourish. However, we will not have repeat customers because our product is not something disposable. This is the case except for when new versions of our product are made. We believe our customers will like the product enough to upgrade their old system. For independent artists and producers, upgrading systems is easier and cheaper than being signed to a label. When describing the sound recording industry today, most artists and producers would say, “Labels are obsolete.” (Iglauer). Instead of labels, many artists are becoming independent artists because of the accessibility to technology that will help them create their own albums (Iglauer). Notebooks and tablets such as the iPad and Macbook Pro, are a $145 billion device market ("Converged Devices: How Might Apple Play?."). Boardless Innovations uses these portable, highly advanced technologies to cater to the customer, making it easier for them to access our product. As the headphone and sound recording industry continue to flourish, our product will also continue to grow which assures profit. However, because our product is a durable good, Boardless Innovations will need to spend a sizeable amount of initial profits advertising on websites and sending out grass-roots method ads. This could be as simple as going to Universities such as Belmont in Nashville where the music life is huge, and advertising to students in order to capture our target market. While that method does not cost capital, it costs time that could be spent developing our product.

Sources Used

When trying to find sources about our target market, the managers were fairly successful. Our niche that we provide is specific and unique, which made it difficult to hone in on what market to research. Also, we found that many sources did not have information on each state as a separate entity. So instead we had to search market trends by regions, such as the Southeast. After figuring out how to appropriately research the topic, the managers were able to find many statistics and information on the market. Using sources such as the U.S. census and professional articles found using Business Source Complete assured the managers that the information was accurate. Also, the company used an online survey on Survey Monkey, to ask the consumers about the product. Using statistics and the survey, the company can better interpret how the custumer will like the product and also how profitable the company will be.

Product, Pricing, Distribution, and Promotion Strategies

Product

Our product, the NewBI (pronounced newbie) is a three-piece product consisting of a pair of wireless, high quality, eye-catching studio headphones, a wireless transmitter to send the instruments sounds to the headphones on up to six different channels, and an app for the consumer’s electronic hand-held of choice (android or iOS) that portrays a digital soundboard. Essentially, this product downsizes the studio and soundboard into three small, easily portable devices. The NewBI is meant to be used during live recording sessions, but can be used in post recording as well. Each instrument being used is plugged into the wireless transmitter, and up to six signals are sent to the headphones and app. From there, the NewBI is able to control each instrument individually, changing the volume of each instrument in order to hear the nuances in the music. For instance, if the consumer desired to hear the singer and the piano, apart from all the other guitars etc., he or she would simply turn down the other instruments on either the buttons on the headphones’ ear cups, or on the app itself. The consumer could listen to a range of combinations, from just two instruments to having just one tuned out, to listening to the whole ensemble. In addition, the product will be offered, to start, in two separate packages: one with all three pieces of equipment, and one with the headphones alone in the case that the consumer doesn’t make music, but wants the NewBI headphones.

The prime psychological benefit of the NewBI is that it embodies a product designed specifically for the artistic consumer, and is meant to inspire the artist in any consumer through the idea of the product: having one’s own personal studio is only a few hundred dollars away. The NewBI provides an emotional benefit in that it allows new artists or consumers who cannot afford studios or expensive studio equipment to cut those large costs and barriers to entry in creating their own music. When consumers understand the incredible opportunity the NewBI provides, a sense of excitement ensues and an emotional attachment is formed between the consumer and the product in its enabling aspect. Consumers may also find another emotional benefit in the product in that it designed by a native of Nashville, Music City itself. A product that is born in the heart of music production adds to the NewBI’s initial credibility and reaffirms that artistic angle that the product appeals to.

The NewBI studio headphones system is in the growth life cycle stage. Studio headphones have been on the market for many years, but the recent outburst starting in 2008, with the introduction of Beats by Dre, has led to large jumps in growth because headphones are now pieces of art, not just pieces of tech. For instance, when Beats was introduced,

“the market for headphones spiked from 59 million units sold and $490 million in revenue at the end of 2008--the year Beats by Dre launched--to 68.7 million units sold and revenue of $648 million the following year. For 2010, the CEA expects a slight increase to 70.8 million units sold with $670 million in revenue, forecast to grow incrementally next year to 73.6 million units sold and $681 million in revenue” (Bruno).

These growth spurts show no signs of stopping, and Boardless Innovations aims to capitalize on that fact (Johnston).

Pricing

Initially we intended to sell the NewBI headset at two different price levels. The full package will contain the headset, the application, and the wireless adapter and sell for approximately $325. Consumers who have no desire to produce music but still want our high quality headphones will be able to purchase the headset by itself for the much lower price of $250.

Pricing Scheme

Our headset is priced by a combination of the skim and penetrative pricing strategies. As a new company, we do not have the luxury of an expansive and encompassing product line. Although we intend to later expand, initially we will only have one model headset. In order to compete as a hybrid of studio and high quality listening headphones, we need to penetrate the studio headset market while skimming the casual headphone market. That is why we are offering the different NewBI packages. We skim the casual headphone market by offering extremely high quality headphones for $250 while competitors in that market range roughly from $90-$200. Meanwhile, we penetrate the studio headset market by offering a stand-alone recording package for $350 when other studio headsets of similar quality can range from our price $350 all the way to $1,695 at the top of the market.

Competitor 1

Obviously, being in the headphones market puts is in direct competition with Beats. The lowest end Beats products retail for around $100, but that degree of quality is beneath our product range. The Beats products that would compete with us in terms of quality would be the higher end products which top out at $450 (Crystal). Both our NewBI standalone and full packages retail for less at $250 and $325 respectively. The disadvantage we have is that Beats can successfully sell their product at such a high price due to their celebrity endorsement by Dr. Dre. In order to compete with Beats we not only have to sell for less but also demonstrate that the NewBI is superior both in terms of price and in terms of quality.

Competitor 2

Although the company is not as well known in casual circles, Grado carries a vast expanse of headphone product lines and is one of the oldest electronic manufactures in the U.S. It is much more difficult to compare our prices to their prices since our price ranges from only $250 to $325 while Grado’s product lines range from the low price of $49 to the exorbitant price of $1,695 (Magnan).

Competitor 3

Bose is also a large, established competitor in the headphones market. Their nearly household name is one of their greatest strengths. Whereas Beats is known due to Dr. Dre, Bose’s name stands alone. Bose is the competitor we will need to use “skim” pricing against if we intend to acquire any of their consumer base, because our product cannot be sold as cheaply as many of theirs. The standard line of Bose headphones ranges from roughly $59 to $350 (Morrison). The average casual consumer will chose a cheaper Bose product over the NewBI, so we will have to emphasize the high quality and music production capabilities of the NewBI to compete with Bose.

Distribution

At first, our product will be sold online. The domain names “boardlessinnovations.com” and “newbisound.com” are both available to us for use. By advertising our product across several college campuses in the southeast, our website and brand will have a base consumer, the low-income musician. At these campuses, we will have live demos of our product, using live bands from the campus if possible. This way, we’re promoting both our product and the new band. Our sales channels include the direct consumer method as well as cyber-distribution. Because we are selling a simple three-part product, or just a one-part product, shipping can be handled through UPS, FedEx, etc. Boardless Innovations does not need to purchase transportation, but pay shipping costs.

After the NewBI has been marketed on the Internet and college campuses, we will begin to move into retailers such as amazon.com, Wal-Mart, and attempt to move into BestBuy. This is where consumers will get to do a lot more sampling of our product, whereas previously consumers would have to have heard of the product by word of mouth, or have had Boardless Innovations present it directly to them. The NewBI has the advantage of being a small, personal product; thus, the necessity of a warehouse to store our product is irrelevant for now. Distributors will have an incentive to carry our product because it serves an untapped niche. We are targeting the low-income musician, who cannot afford to rent a production studio or buy expensive recording equipment and who is looking for a compact solution to audio recording. Our ideal consumer also has something others do not have: A passion for music, and a passion for design. Customer loyalty should be high because there is not currently a product on the market exactly like ours, and we are providing a moderately priced, high-quality product.

Promotion

The NewBI sound will advertise on social media sites because the company’s main consumers are young people who use the Internet consistently. Furthermore, over 20 percent of consumers in the United States watch less television because of the accessibility of the Internet (19). Social Networking sites reach the age groups of 18-26 and within that age group, 87 percent of them use the site once a week and 30 percent visit everyday (Ateljevič 20). While this statistic is specific to a certain age group, Ateljevič is simply focusing on the majority of social network users. Social network users ages range from early teens well into the 50-year-old range and higher, as many grandparents have been known to own social networking accounts. Social Media will allow NewBI sound to get a lot of exposure to the target audience in a short period of time. Social media allows the company to quickly explain their product without going into great detail, which will catch the attention of the younger audiences. The cost to advertise on Facebook would be approximately $2.99 per every thousand views (Lee).

Even though ads will be a part of the promotional strategy, it is not the company’s main focus. NewBI sound will focus on personal selling as a promotional tool. Personal selling is more effective in creating sales as we are able to accurately and energetically portray our product in a way that a simple advertisement cannot. Since Boardless Innovations is not a well-known company and does not have a celebrity endorsement, the company can use personal selling to establish trust with the consumers. There won’t be an additional cost to this form of advertising since we will be doing it ourselves; we will each be receiving a salary already, and we will carpool and pay for Gas with the money we have. This will change once the company has gained a foothold in the market, but until then we must keep corporate expenses to a minimum. When Luke Wood, president of Beats by Dre, was asked what marketing strategy he used to gain so much success, he answered by saying “It's really been down to us focusing on telling people about how great these headphones sound” (Q&A). Since NewBI sound is in direct correlation with the music industry, in that our product is designed specifically for the recording artist, Boardless Innovations will focus the personal selling aspect of promotion on Nashville, Tennessee. Nashville is nicknamed the ”Music City,” which made it seem like an appropriate place to start a promotion. In Nashville, Boardless Innovations plans to go to numerous music universities such as Belmont University, and give free demos of the product. By using actual musicians and allowing them to use and learn about our products for free, we hope that they love the product so much that they are inspired to buy it. Joining with schools in the area will hopefully allow NewBI sound to gain credibility. In addition, we can place flyers, in combination with our demos, for our product at places where many musicians usually go such as: The Blue Bird Café, a coffee shop in Nashville that is famous for celebrity producers discovering aspiring musicians. While flyers are not the fanciest of marketing strategies, we believe they are an effective way give potential customers something to hang on to that is connected to our business. The flyer will be a single page document that simply displays our product as well as our website and contact information. At FedEx, the cost to print approximately 1000 flyers is $399.99. With all of these promotional tactics, Boardless Innovations hopes to maintain an image of our product in the buyers’ minds and also increase the demand for NewBI headphones.

Start-Up Costs

Startup Capital Requirements - One-time Startup Expenses

Startup Expenses

Amount

Description

Advertising

$263

Promotion for opening the business

Starting inventory

$147,000

Amount of inventory required to open

Cash

$5000

Amount needed for the cash register

Decorating

$70

Estimate based on bid if appropriate

Deposits

$0

Check with utility companies

Fixtures and equipment*

$2,500

Insurance

$1000

Lease payments

$0

Fee to be paid before opening

Licenses and permits

~$300

Check with city or state offices

Miscellaneous

$0

All other

Professional fees

$1,690

Include CPA, attorney, etc.

Remodeling

$0

Rent

$700

Fee to be paid before opening

Services

$0

Cleaning, accounting, etc.

Signs

$0

Supplies

$80

Office, cleaning, etc. supplies

Unanticipated expenses

$5,000

Include an amount for the unexpected

Other

Other

Other

*credit card machine for business

Total Startup Costs

$163,603

Amount of costs before opening

· Advertising: ($262.40)

· Since Boardless Innovations is a new company, we will advertise our product with a combination of flyers with our website, products, and contact info, as well as demos of our product in order to get our name out there. We will start by printing 1,000 flyers for an approximate cost of $262.40. We will order the flyers from Vistaprint. The employees of Boardless Innovations will distribute these flyers in Nashville, Tennessee in coffee shops famous for having famous musicians and also at musically based universities such as Belmont University. After the business gains recognition, Boardless Innovations will stop the distribution of flyers and will focus their advertising solely online. The costs for the website have been placed into our starting inventory costs. While flyers may seem barbaric in the advertising industry, a single paged info sheet about our product, handed out to potential customers is the best option for a startup company, in combination with our live demos (Flyer).

· Starting Inventory: $147,000

· At an estimated cost of $162 to produce the full package and $112 for the headset alone it will cost us a total of $109,000 for starting inventory. It will also cost somewhere in the range of $35,000 to produce the app for the tablets and phones that is so essential to the NewBI. Because this is just a one time purchase, it is included in the start up inventory, and also includes debugging for updates in the app. Our website will be the main location for purchase to be made, and because of that, we decided to hire a professional company to design our site, which will cost approximately $3000. (How much… , Headphone manufacture…)

· Cash: $5000

· We will need $5000 in cash in order to keep a safe amount at all times. Since our product costs, on average between the two options, about $300, we will need a significant amount of cash if someone wishes to pay for the product with cash. However, most transactions are likely to be done through cards. This $5000 should last a at least 2-3 months even though it is a startup cost.

· Decorating: $70

· Because we will be already furnished with some office equipment and supplies from Innovation Depot, only $70 dollars will be put to use for desk lamps, a coat rack, and any other useful items needed to make our office space look appropriate for business use.

· Deposits: $0

· Fixtures and Equipment: $2,750

· This includes two desktop computers valued at $1,000 a piece, as well as an all-in-one laser printer for about $500.

· Insurance: $1,000

· Boardless Innovations will be insured by State Farm Insurance. Insurance is generally $1,000 a year or $75 a month for a small office space. Boardless Innovation’s office space is used solely for research and working with customers over the phone or Internet. Boardless Innovations will not have customers come into the office and we will also not house our products there, therefore we will only need the basic insurance plan (Walker).

· Lease Payments: $0

· Licenses and permits: $300

· It is estimated that it will costs at least $300 for a small business producing it’s product in Birmingham to obtain a business license. This price is taken from 2/10 of 1% of the gross receipts from the previous year. Boardless Innovations does not have any gross receipts to go off of, therefore, the minimum price of $300 is what must be settled upon (Alabama).

· Miscellaneous: $0

· Professional Fees: $1690

· Accounting will cost $640 at a quoted rate of $80 an hour. We estimate four hours of start-up accounting work and allow for an additional four hours within the first month for additional questions or unseen needs. At a rate of $150, we estimate five hours of start-up work/consultation and allow for an additional two hours of unseen questions and issues (Boyd, Bratcher, Marttala).

· Remodeling: $0

· Rent: $700

· Rent will cost approximately $700. Our company will be installed in the Innovation Depot in Birmingham in order to help save money and produce a better product more efficiently. About $550 of the $700 will go towards the office large enough to accommodate 5 managers. The remaining $150 will go towards paying for a lab for Boardless Innovations to develop the NewBI in. We do have to sign a lease, but the lease is for 1 year of monthly payments of rent (Laney).

· Services: $0*

· Our services are $0 because things such as hiring an accountant are covered in our professional fess section, and we rent out our office at a building that is cleaned systematically, so there is no need to pay for a cleaning service.

· Signs: $0

· Supplies: $80

· Boardless Innovations has set the amount of $80 dollars to buy useful office supplies that our company can use. Supplies range from paper, pens, binders, folders and any other necessary materials to make our business run as smoothly as possible (Staples).

· Unanticipated Expenses: $5,000

· Due to the high start up cost of our business, we at Boardless Innovations have calculated the amount $5,000 to set aside for unanticipated expenses. This figure can never be too high because it insures our company’s safety against any unforeseen circumstances (BizFilings).

Startup Capital Requirements - Repeating Monthly Expenses

Expenses

Amount

Description

Advertising

$120

Bank service fees

$45

Credit card charges ***

2.5%

Delivery fees

$0

Dues and subscriptions

$0

Health insurance

$750

Exclude amount on preceding page

Insurance

$225

Exclude amount on preceding page

Interest

10%

Inventory

$5450

5% increase in inventory per month

Lease payments

$0

Exclude amount on preceding page

Loan payments

$2,778.88

Principal and interest payments

Office expenses

$225

Payroll other than owner

$0

Payroll taxes

$900

Professional fees

$1620

Rent

$2100

Exclude amount on preceding page

Repairs and maintenance

$85

Sales tax

10%

Supplies

$195

Telephone

$0

Utilities

$0

Your salary ****

$45,000

First three months

Other

Total Repeating Costs

$59,493.88

Total Startup Costs

$163,603

Amount from preceding page

Total Cash Needed

$223,096

· Advertising: $120 (3 Months)

· Since the NewBI will be sold primarily online, most of the advertising is going to be focused on online ads. Facebook pages can be kept without cost, and will be seen by our target customers (Campaign). The only potential cost is that our managers will be using their time to update the social media pages and our separate website, which takes away from other tasks that need to be managed. However, some grass-roots advertising still must be done. At approximately 26 cents per flyer, Boardless Innovations will continue to use Vistaprint for its physical advertising, printing 150 flyers a month to be placed in various cities across the Southeast (Flyer). T

· Bank Service Fees: $45 (3 Months)

· We can open a business checking account with Regions Bank for only $15/month. The $15 fee can be waived every month provided that we keep an average balance of $2,000 dollars in the account. The first 150 transactions are free, and for each additional transaction there is a .50 charge. For deposits, the first $10,000 deposited each month is free, and for every additional $100 deposited, there is a .20 fee (“LifeGreen Checking for Business”).

· Credit Card Charges: 2.5% x projected sales

· There is a processing charge for websites that use credit cards of approximately 2.5%, depending on the amount of sales and the average amount of cash interchange.

· Delivery Fees: $0

· We are producing our product, so we do not have an import cost. We will charge a weighted shipping rate when people purchase our product, so the customer will pay the delivery fees.

· Dues and Subscriptions: $0

· Health Insurance: $750 (3 Months)

· Boardless Innovations will use State Farm Insurance for health insurance also. It usually costs $50 per person per month. This would total to $250 per month for the five managers. Since we are a new business and all the managers are fairly young, we purchased the minimum health insurance with limited coverage. Even though it does not cover big things, it at least gives the managers some kind of insurance. As the company grows and it gains more capital, the health insurance will be improved (Walker).

· Insurance: $75

· After paying the initial $1000 for the first year of insurance on the office space, Boardless Innovations will have to pay $75 a month after the first year. State Farm Insurance will insure the company (Walker).

· Interest: 10%

· Our interest rate will be 10% for 6 years (72 months) for our loan of $150,000. (LOAN AMOUNTS…).

· Inventory: For the second month: $5450

· Every month, we will increase the amount of inventory manufactured by 5% in order to plan for growth. For our second month, with growth, it will cost $5450 more in order to account for an increase in sales (Headphone manufacture…).

· Lease Payments: $0

· Loan Payments: $2778.88

· In order to help pay for our initial costs to start Boardless Innovations, we decided to take out a loan of $150,000 paid out over 6 years at an interest rate of 10%. The rest of funding will come from family and various investors, “fools” (LOAN AMOUNTS…).

· Office Expenses: $225 (3 Months)

· We estimated that the total amount needed for office expenses would be $75. This figure will be set aside for any cleaning essentials or tools for conferences that we may need to keep our office clean, modern and professional. Our office will be kept at the highest quality and standards.

· Payroll other than Owner: $0

· Payroll Taxes: $900

· This is calculated from the 6% state income tax of Alabama that will be taken from our payroll (“Alabama Income Tax Brackets 2013”).

· Professional Fees: $1620 (3 Months)

· For 3 hours each month, an accountant will meet with us for a total price of $240 per month. We will meet with our lawyer for 2 hours for a total cost of $300 per month, with the grand total between the two being $1620 for 3 months (Boyd, Bratcher, Marttala).

· Rent: $2100 (3 Months)

· This rent is no different than the initial rental. Please read the “Rent” section in the one-time costs section (Laney)

· Repairs and Maintenance: $85

· The main focus of our company will be selling products over the Internet. Therefore, our maintenance and repair expenses will be directed towards the company’s computers and printer. $85 dollars will be budgeted to cover the possibility of equipment malfunctions and part replacement.

· Sales Tax: 10%

· Supplies: $195 (3 Months)

· The amount of $65 dollars will be spent per month on supplies for the Boardless office. Staples has been chosen to supply our store with these items and has shown to consistently have the lowest price. Supplies include ink, printer paper, writing utensils, etc.

· Telephone: $0

· Telephone services are provided for in the rental of the office.

· Utilities: $0

· Utilities costs are included in the rental of the office at the Innovation Depot.

· Your Salary: $45,000 (3 Months)

· $15,000 will be split five ways between the separate owners per month. For the first three months, NewBI Sound will be a new product to consumers, resulting in low sales revenue. As time passes and people become aware of the quality of our product, raises will be thoroughly discussed and considered between the five owners. We understand that sacrifice is key to any successful business.

SWOT Analysis

I. Competition

Beats (Magnan, 2011)

· Strengths

· Beats has celebrity backing by Dr. Dre.

· Beats has an established name in the headphones Market.

· Beats’ products have become so popular they are sometimes worn as accessories instead of used to listen to music.

· Beats has an easily recognized and popular logo and style.

· Beats has products in both the casual listening and music production market.

· Weaknesses

· Reviews of Beat’s products often state the material quality is low for the price.

· Beats has a narrow product range in terms of prices and is somewhat confined to their niche.

· Strategic Plans: While no specific plans could be found, most likely Beats keeps its plans a secret as to keep its edge over competitors, Beats has been introducing products such as the DJ, meant to cater to more specific target audiendces.

Grado (Kim, 2012)

· Strengths

· Grado is one of the oldest headphone producers in America having been producing high-end headphones for over thirty years.

· Known for having amongst the best headphones in terms of sound quality

· Extremely wide variety of headphone models and product lines.

· Grado offers headphones for much lower prices than many other producers in the high-quality headphone market.

· Weaknesses

· Reviews reflect that Grado’s products have long chords and lack accessories for their higher quality items.

· Although Grado has been around since the 1980’s their name recognition among the general public is low compared to other headphone companies.

· Their wide product line means it’s difficult to match their name with any particular one or group of their products.

· Strategic Plans: None could be found.

Bose (Morrison)

· Strengths

· Bose is essentially a household name when it comes to high quality audio equipment.

· Bose has their own retail stores and are easily found in electronic retailers such as Best Buy and Radio Shack.

· Bose headphones are known for being less expensive than competing headphones.

· Weaknesses

· Bose is better known for stereo systems and similar sound systems than headphones.

· Bose headphones are not often used for studio recording since they do not have the highest sound quality.

· Strategic Plans: None could be found; however, Bose continues to diversify its product lineup, introducing products such as the SoundDock.

Sennheiser (Isaac, 2013)

· Strengths

· Sennheiser products are known in audio circles for their well-balanced audio quality.

· Sennheiser specializes in studio headphones and has a wide variety of products for various customers in the audio recording market.

· Weaknesses

· Sennheiser products have a reputation of being overpriced.

· Although Sennheiser products excel in registering mid-tones, reviewers claim the high and low tones often sound weak in comparison.

II. Strengths

· The software application that comes in the full package will enable producers to mix music without enormous soundboards. The NewBI full package will allow new music producers to start inexpensively and old producers downsizing to efficiently cut their expenses.

· Since Boardless Innovations does not yet have name recognition, our products will be sold on the grounds have fair prices for high quality instead of celebrity endorsements or household names.

· Being based in Nashville will put Boardless Innovations in the center of the action when it comes to music production.

III. Weaknesses

· Even with effective advertising, it will take several months, if not years, for Boardless Innovations to become a recognized name in the sound recording industry.

· As a start-up business, Boardless Innovations does not have access to large amounts of capital and must be incredibly careful during its early stages.

· Since Boardless Innovations will initially began with relatively small inventory, we will be paying a higher than average cost for the production process of the headphones.

· Boardless Innovations will have an extremely narrow product line until the business starts turning a profit and has room for product innovation and experimentation.

· Until our product is well enough known we can market it in retail stores, the majority, if not the entirety, of our sales will be online.

IV. Opportunities

· Wireless headphones themselves are pretty rare. Creating studio headphones that are wireless is an idea few companies have run with, giving Boardless Innovations an entry point into the market for studio headphones.

· Purchases of high quality and studio headphones have been on the rise in 2012. (Malestar)

· Our target market of males between the ages of 22 to 42, while down in percentage from 39.9% to 36.5%, is up in net numbers by 622937 people according to U.S. Census data.

· None of our key competitors are known for providing quality at the price they charge for it. We ensure that our product’s quality is equivalent to its price since the price is no inflated by celebrity endorsements or known brand names.

· Revenue generated in the sound recording industry has been on the rise in 2012 and already in 2013.

· Music recorded in non-professional studios has been on the rise. Our product is engineered to be of extreme use to consumers who want to record music without purchasing or renting an entire studio. (Verna)

V. Threats

· Entering into an industry already dominated by such large and popular companies such as Beats and Bose is a risky task.

· Although we intend to patent the software used in our product, the idea of wireless studio headphones could be picked up by competitors when we begin to make a profit.

· Studios and students that already have the equipment necessary to function are unlikely to purchase our product unless their equipment breaks or they need to downsize.

Strategy

Our strategy is the focus differentiation strategy. We have chosen to differentiate because as a new business we cannot afford to compete on a basis of lower costs and would easily lose to the larger companies. We differentiate by offering a product that allows consumers to produce music in a way unlike anything before. Instead of having to rent or purchase large numbers of studio equipment or expensive software, we provide headphones of a high enough quality to detect the intricacies of musical tones and the software application that functions as a mobile soundboard on an IPhone, IPad, or any other hardware that runs applications. We narrow our market by specifically targeting new producers in the sound recording industry and existing producers trying to downsize or reduce production costs. By using the focus differentiation strategy, we are able to tailor to our specific customer base through innovation and quality, thus allowing us to enter a competitive market and thrive on what our competitors do not offer.

Resumes

Holt A. Linde

hlinde@samford.edu

(615) 779-3546

Current Address:Permanent Address:

SU Box 2920271254 Concord Hunt Dr.

Birmingham, AL 35229Brentwood, TN 37027

EDUCATION

May 2016Samford University, Birmingham, Alabama

Bachelor of Science in Business Administration

GPA 3.81/4.0

HONORS

Dean’s List Fall 2012

Alpha Lambda Delta Honors Society

General Academic Scholarship

EMPLOYMENT HISTORY

OFFICE OF STUDENT LEADERSHIP, Birmingham, AL 2012-Present

· Office Assistant, responsible for planning events with Janna Pennington and completing

in-office assignments

NIKE, Brentwood, TN2011-2013

· Floor Sales

Responsible for selling Nike’s product and representing the Nike brand and their standards.

First person interaction with customers.

COLLEGE BOUND SEALERS, Brentwood, TN2010-present

· Founder and Sole Proprietor

· Owner of a pressure washing and sealing business for driveways.

· Grossed enough money in the first four months to pay for round trip to China and first car, a 2005 F150

ORGANIZATIONS

· Pi Kappa Phi Fraternity Member2012-present

· Student Government Association: Freshman Forum Member2012-2013

· Office of Student Leadership and Community Engagement2012-present

· Freshman Representative Council2012-2013

TECHNOLOGY

Microsoft Office 2011 (Word, Excel, PowerPoint)

Adobe Photoshop CS3

Adobe Illustrator

Brianna P. Walker

bwalker@samford.edu

(205)-370-4763

Current Address: Permanent Address:

SU Box 290490 1145 Whisper Cove Drive

Birmingham, AL 35229 Buford, GA 30518

EDUCATION

May 2016Samford University, Birmingham, Alabama

Bachelor of Arts and Science

GPA 3.26/4.0

ORGANIZATIONS

· Phi Mu Fraternity: Sisterhood Development Committee2012-2013

· Samford University Cheerleading2012-2013

VOLUNTEER

· Urban Exchange Summer 2012

TECHNOLOGY

Microsoft Office 2007 (Word, Excel, PowerPoint, Access)

Andrew Dean Davis

adavis11@samford.edu

(940) 395-6768

Current Address:

SU Box 290591

Birmingham, AL 35229-0591

Permanent Address:

134 Crooked Cove

Argyle, TX 76226

EDUCATION

May 2016Samford University Graduation

Bachelor of Science in Business Administration

Minor: Accounting

HONORS

Samford University Presidential Scholar

Samford University Dean Scholarship recipient

EMPLOYMENT HISTORY

The Classic Cafe, Roanoke, TX 2011-2012

· Waiter & Bookkeeper

Assisted managers in preparing financial documents for restaurant expenses and revenues. Served customers and maintained a high customer review rate.

ORGANIZATIONS

· Sigma Chi Fraternity: New Initiate 2012 - present

· Samford University College Republicans: Current Member 2012 - present

VOLUNTEER

· Habitat for Humanity (Sigma Chi Fraternity)

· YoungLife leader (lead Bible study for freshmen and sophomores in high school)

· Samford University Leadership Cadre (tutor inner city middle school students)

TECHNOLOGY

Microsoft Office 2007 (Word, Excel, PowerPoint, Access, Outlook and SharePoint)

Adobe Reader 2007

Hamilton Spivey

hspivey@samford.edu

(931) 808-3469

Current Address:

SU Box 293614

Birmingham, AL 35229

Permanent Address:

237 King’s Pointe Lane

McMinnville, TN 37110

EDUCATION

May 2016Samford University, Birmingham, Alabama

Bachelor of Science in Business Administration

GPA 3.2/4.0

HONORS

Boy Scouts of America – Eagle Scout

Samford University – University Fellow

EMPLOYMENT HISTORY

CUMBELAND LUMBER MANUFACTURING CO. McMinnville, TN 2012

· Laborer

Provided manual labor on the lumber yard and often helped with recording the incoming lumber invoices.

VOLUNTEER

· New Rising Star

· Second Harvest Food Bank

LAUREN A THRASHER

lthrashe@samford.edu

(205) 706-2007

Current Address:

SU Box 292186

Birmingham, AL 35229

Permanent Address:

7008 Indian Ridge Drive

Indian Springs, AL 35124

EDUCATION

May 2014Samford University, Birmingham, Alabama

Bachelor of Science in Management

GPA 3.38/4.0

HONORS

Samford University Academic Scholarship

Samford University Leadership Scholarship

Samford University School of the Arts Scholarship

EMPLOYMENT HISTORY

POWER FORCE APPAREL, Birmingham, ALSeptember 2012-December 2012

· Social Media Intern

Set-up/Maintenance of all social media sites and official company website

Provided professional and timely customer service via social media and phone

FRANCESCA’S COLLECTIONS, Birmingham, ALApril 2011-March 2012

· Boutique Associate

Responsible for sales, excellent customer service, and maintaining a clean work environment

FOREVER 21, Birmingham, AL April 2011-September 2011

· Sales Associate/Visual Merchandising

Responsible for sales, excellent customer service, maintaining a clean work environment

Learned a variety of merchandising and sales techniques

ORGANIZATIONS

· Phi Mu Fraternity: Member 2010-2011

· Samford Student Recruitment Team 2011-2012

· Samford Campus Tour Guide 2011

TECHNOLOGY

Microsoft Office (Word, Excel, PowerPoint, and Outlook)

Adobe Photoshop- CS6 and older (Advertising/Graphic Design)

Works Cited

Alabama. Department of Finance. The Business License Code. By Steve F. Sayler, Lois B. Brown, and Henry Young. Birmingham: n.p., 2009. Information Birmingham. Web. 12 Mar. 2013.

"Alabama Income Tax Brackets 2013." Alabama Income Tax Brackets 2013. Tax-Brackets.org, 2013. Web. 12 Mar. 2013.

Arnold, Ben. "Premium-headphone Honchos Jostle for Your Ears." CNET News. CBS Interactive, 13 Sept. 2012. Web. 26 Feb. 2013.

Ateljevič, Jovo, and Frank Martin. "The Use Of Location Specific Advertisements On Facebook: Can They Help Entrepreneurs Solve Problems Associated With Banner Advertisements?." Challenges Of Europe: Growth & Competitiveness - Reversing Trends: Ninth International Conference Proceedings: 2011 (2011): 17-32. Business Source Complete. Web. 3 Mar. 2013.

"Avid | Pro Tools 10." Avid | Pro Tools 10. Avid, n.d. Web. 26 Feb. 2013.

"Avid Pro Tools 10." PCMAG. PC Mag, 13 June 2012. Web. 28 Feb. 2013.

"BARNES Reports: U.S. Sound Recording Studios Industry (NAICS 51224). (Cover Story)." United States Sound Recording Studios Industry Report (2012): 1-98. Business Source Complete. Web. 16 Feb. 2013.

BizFilings. “Figuring the Costs of Setting Up Your New Business.” Calculate Costs of Setting

Up

Boyd, Steve. CPA, CMA, CFE, Partner at Tuthero, Haile and Welch.

Bratcher, Tom. J.D. Attorney at Law at Stanley and Bratcher

Bruno, Antony. "Sound And Vision." Billboard 122.47 (2010): 20-22. Business Source Complete. Web. 19 Feb. 2013.

“Campaign Cost and Budgeting.” Facebook. Facebook, n.d. Web. 13 Mar. 2013

Cedeno, Henry. "How Much Revenue Do Artist Really Earn through Traditional/non-traditional Retail Outlets? | First Class Alliance." Web log post. First Class Alliance. N.p., 8 Nov. 2011. Web. 16 Feb. 2013.

Christman, Ed. "The Numbers: Read'em, Don'tweep." Billboard 125.1 (2013): 22-24. Business Source Complete. Web. 16 Feb. 2013.

"Converged Devices: How Might Apple Play?." Bernstein Black Book - Apple: Can It Successfully Migrate From Hyper-Growth? (2012): 55-66. Business Source Complete. Web. 25 Feb. 2013.

Economics and Statistic Administration. Personal Income. United States Department of Commerce. 2011-2012. Web. 18 February 2013.

“Flyer, Printing, &Design.” Vistaprint. n.p. n.d. Web. 13 Mar. 2013.

"Future Of The Headphones Category Still Up In The Air." TWICE: This Week In Consumer Electronics 27.6 (2012): 40. Business Source Complete. Web. 27 Feb. 2013.

Gallagher, Dan. "High-end Headphones Keep up Growth." Market Watch. The Wall Street Journal, 29 Nov. 2012. Web. 24 Feb. 2013.

"Happy Headphones!." TWICE: This Week In Consumer Electronics (2012): 4-5. Business Source Complete. Web. 28 Feb. 2013.

Howden, Lindsay M. Age and Sex Composition 2010. U.S Census Bureau. 2011. Web. 18 February 2013.

"Headphone Manufacture Directly Provide with Best Price." Alibaba. N.p., 2013. Web. 14 Mar. 2013.

"How Much Does It Really Cost to Build a Website?" How Much Does It Really Cost To Build a Website? N.p., 2011. Web. 14 Mar. 2013.

Iglauer, Bruce. "Labels Are Here To Stay." Billboard 121.26 (2009): 6. Business Source Complete. Web. 25 Feb. 2013.

Isaac, Mike. "Now Hear This." Forbes 6 Dec. 2010: 3 pars. Business Source Complete. Web. 17 Feb. 2013.

Johnston, Lisa. "Headphones Headed For Another Strong Year." TWICE: This Week In Consumer Electronics 27.25 (2012): 4-58. Business Source Complete. Web. 14 Feb. 2013.

Kim, Crystal. "Heavenly Headphones." Gadget of the Week (2012): 5 pars. Web. 26 Feb. 2013.

Knapp, Alex. "Indie Hip-Hop Star Destorm Power On Youtube And The Future Of Music." Forbes.Com (2012): 31. Business Source Complete. Web. 16 Feb. 2013.

Kunz, Marnie. "The Average Cost Per Month for Office Supplies." Small Business. N.p.,

n.d. Web. 13 Mar. 2013.

Laney, T. Devon. "Samford Class Question about Innovation Depot." 8 Mar. 2013. E-mail.

Lee, Edmund. "Social Networks Sink Online-Ad Pricing." Advertising Age 81.27 (2010): 1-20. Business Source Complete. Web. 3 Mar. 2013.

"LifeGreen Checking for Business." Business Checking. Regions Financial Corporation, 2013. Web. 13 Mar. 2013.

Linde, Holt. “Target Market.” Survey. 25 February 2013.

"LOAN AMOUNTS, INTEREST RATES, AND FEES." Accion USA. Accion, 2013. Web. 12 Mar. 2013.

Magnan, Michelle. "Sounds Like A Hot Investment." Maclean's 124.6 (2011). Business Source Complete. Web. 24 Feb. 2013.

Malester, Jeff. "Headphones Vendors Sound Sharp Style Notes." TWICE: This Week In Consumer Electronics 16.18 (2001): 35. Business Source Complete. Web. 17 Feb. 2013.

Marttala, Susan. J.D. Attorney at Law at Galligan and Newman

Morrison, Geoffrey. "Review: Bose QuietComfort 15 Noise Canceling Headphone." Tech^2. Ed. Geoffrey Morrison and Brent Butterworth. Bonnier Corporation, 18 Aug. 2012. Web. 26 Feb. 2013.

"NEW SoundDock® Series III Digital Music System." Bose. Bose, n.d. Web. 25 Feb. 2013.

"Q&A: Beats By Dr Dre." Marketing Week (Online Edition) (2012): 2. Business Source Complete. Web. 3 Mar. 2013.

Sanburn, Josh. "How Dr. Dre Made $300 Headphones a Must-Have Accessory." Time. Time Magazine, 16 Jan. 2013. Web. 28 Feb. 2013.

Staples. "Office Supplies." : Shop Office Supplies, Paper, Files and More, n.d. Web. 13

Mar. 2013.

"Studio Headphones: Leading Models Compared." Sound On Sound. N.p., Jan. 2010. Web. 18 Feb. 2013.

U.S. Bureau of Labor Statistics. Fourth Quarter and Annual Averages 2012, Preliminary. Office of Productivity and Technology. 7 Feb 2012. Web. 18 February 2013.

U.S. Census Bureau. Annual Average Consumer Price Index Research Series. N.p. 2009. Web. 18 February 2013.

Verna, Paul. "Studio Sales Continue." Billboard 111.5 (1999): 6. Business Source Complete. Web. 16 Feb. 2013.

Walker, Lester. State Farm Insurance, Claims Team Manager. Personal Interview. 12 Mar. 2013

Your New Business. N.p., n.d. Web. 13 Mar. 2013.

Werner, Carrie A. The Older Population 2010. U.S. Census Bureau. 2011. Web. 18 February 2013.

Zegal, Will, Los Teignos, and Red Led. "The Great Studio Headphone Comparison Test." Audiofanzine. N.p., 6 Aug. 2012. Web. 17 Feb. 2013.

Figure 2 / CPI-U-RS

CPI-U-RS2000,2001,2002,2003,2004,2005,2006,2007,2008,2009,252.9260.0264.2270.1277.3999999999999286.7296.1304.5316.2315.0

Figure 3 / CPI% Increase

CPI% Increase2000,2001,2002,2003,2004,2005,2006,2007,2008,1.031.021.021.031.031.031.031.04Productivity2008,2009,2010,2011,2012,-0.60.16.42.52.0Compensation2008,2009,2010,2011,2012,0.44.5-0.5-0.50.3Unit Cost2008,2009,2010,2011,2012,4.94.0-5.00.10.4

Promotional Strategy

SalesFlyersSocial MediaPersonal Selling0.20.150.65

Industry Sales

Sales in millions2009.02010.02011.02012.02013.0833.0867.0850.0879.0908.0Column42009.02010.02011.02012.02013.0Column32009.02010.02011.02012.02013.0Column22009.02010.02011.02012.02013.0Column12009.02010.02011.02012.02013.0

Years

Sales in millions

Figure 1 / Personal Income

Growth%2011 Jan2011 Feb2011 Mar2011 Apr2011 May2011 June2011 July2011 Aug2011 Sept2011 Oct2011 Nov2011 Dec2012 Jan2012 Feb2012 Mar2012 Apr2012 May2012 June2012 July2012 Aug2012 Sept2012 Oct2012 Nov1.00.30.50.40.30.10.3-0.10.10.40.10.50.30.20.40.20.20.50.30.10.00.10.6