PUMP Audio make headphones for people who love Electronic and Dance Music.
We've created a Brand with serious loyalty and ever growing brand equity, with a range of headphone products that people truly love.
Since our first round of external investment we've made huge strides forwards to the point where we are now ready to move from the underground to a major player in the headphone market.
We feel that our focus on Electronic and Dance music -- which has been broadened from the previous more specific focus on just "Dance music" -- gives us a significant advantage over other 'contender brands' who do not specialise on a particular genre.
In spite our specialisation, we have many users who use PUMP Audio as their preferred headphones across many different musical genres.
Most brands (with the notable exception of Beats) make headphones with a “flat response”, meaning they reproduce slavishly the sound that’s fed in to them, giving every frequency exactly the same priority.
We've created a unique sound signature that our customers love, focusing on whats known by many Audiophiles as the "smile curve", which means that PUMP headphones produce a sound signature that's particularly pleasing to the human ear.
The PUMP Audio sound signature has incredible bass and sub-bass reproduction, whilst not losing the detail and separation through the rest of the frequency range.
Substantial accomplishments to date
◆ Launched in October 2014.
◆ Immediately received glowing reviews from both music industry users and consumers.
◆ Kickstarter campaign which generated our "seed" user base (868 backers).
◆ Attended various shows in the UK with the PUMP Audio "Battle Bus".
◆ Started to build the web presence and marketing for PUMP Audio.
◆ Successful 1st round of external funding (Seedrs).
◆ Contracted with Go To Market company (TMC) to guide us from being a direct to consumer brand to a channel (and B2C) brand.
◆ Product range overhauled based on feedback from retail buyers.
◆ New consistent branding and "design language" approach.
> Product designs.
◆ Aired on QVC (UK), selling out in 4 minutes 52 seconds.
◆ Launched MIX Wireless.
◆ Launched MIX, the second new product to launch since TMC's involvement.
◆ Began work on a brand new patent pending design which we believe could be a game changer for in-ear headphones.
◆ Submitted Patent Application.
◆ New Marketing and Sales Strategy for UK/EU has been agreed and is being implemented.
◆ New range will be rolling out with Amazon, QVC, Selfridges, and we are in talks with Argos for the UK.
◆ Agreed deals with new Distributors (Frequency, GeTech).
◆ Finalising contracts with overseas distributors including German Distributor N.T.P GmbH.
◆ In Q3 we plan to open channels in France.
◆ Contracted specialist PR company MUSTARD PR in April, at the request of Argos to increase visibility for the brand.
Until very recently the vast majority of our sales have been direct to consumer.
Our intention from the start has been to access the channel model so that we have wide distribution and brand recognition first in Europe and then globally (although we already have customers in 111 countries around the World).
We realised fairly quickly that we needed external help to achieve this goal and after our first round we instructed the services of a "go to market" company, two members of which -- Gordon Anderson and Peter Blampied -- have recently joined the board of PUMP.
There was a huge amount of work that went in to taking PUMP from a niche direct to consumer brand to the "ready for retail" brand in 2016.
Now our plan to drive revenues looks like this:
Use of proceeds
Our intended use of funds from our second round is:
Launch ongoing web video advertisement campaigns with the goals of:
a) driving retail sales
b) driving direct sales (Amazon, website)
c) building our email list (which leads to pipeline direct sales as people get to know us)
[N.B. Whereas our efforts were previously diluted in trying to do channel sales and PR in house, we now have Sales (TMC) and PR (MPR) partners in place so that we can focus on our core competencies of marketing and product development.].
Secure the global patent on our new design;
Complete the new design and bring to market while Patent Pending;
Bring to market our replacement for PUMP Zeus (to be called DECKS Wireless);
Continue to focus on growth and take any opportunities that have a good chance of generating a positive ROI.
Our intended target market are music lovers with a passion for Electronic and Dance Music, aged 15 - 35.
The Dance Music market was worth $7.1bn US in 2016 according to the IMS Business Report, up from $6.9bn the previous year.
Our focus is primarily on this market for two reasons:
a) we love the music ourselves and are therefore able to be authentic in terms of product development and in talking to our market;
b) we believe that targeting a specific niche -- at least at first while we grow aggressively -- gives us a competitive advantage over new brands who do not specialize.
With that said, it appears from surveying PUMP users and from user reviews that they are not limited to *only* fans of Dance and Electronic Music, or to only our intended target age groups.
When we conducted a survey of users in 2016, there were significant numbers of users who listened primarily to other genres.
Here are are a few of the notable results:
- Dance / Electronic music (21%)
- Rock (13%)
- Pop (9%)
- Jazz (5%)
- Classical (1%)
The results show that even when targeting a specific segment of the headphone market, we can expect to pick up music lovers from right across the musical spectrum who enjoy PUMPs unique sound signature, broadening our market potential.
Characteristics of target market
We are very confident that we have identified a significant gap in the market.
This gap can be summarised as extremely high sound quality at a (relatively) very low price:
There is a lot of congestion in the headphone market both in the UK and globally, but we are confident that our market positioning is distinct and and a significant gap exists that we are beginning to fill.
According to the IMS Business Report 2016, the Electronic Music business had a value of $7.1 billion globally in 2016, a 60% percent increase from three years before, and Dance Music accounted for 4.2% of all music sales in the USA in 2015.
Analysts at Sandler Research (sandlerresearch.org) forecast the Global Headphone market will grow at a compound annual growth rate of 5.46% from 2017-2021.
What we are very confident of is that both the market for Headphones and the market for Dance Music are both huge, and both growing.
We will continue to sell directly to the consumer, with an increased focus on Amazon in particular.
It's fair to say that we have made errors in selling product to the wrong distributors in the past, which had a negative effect on our sales efforts (they flooded the market to low quality sellers who trashed the price of our last generation products).
It also meant that margin we could have been earning ourselves was split between these low quality sellers instead.
That issue has been resolved now that we have introduced the brand new generation of products and we have undertaken to be extremely particular about which distributors (and retailers) we sell to.
The bulk of our focus over the last 10 months has been developing a new product range that appeals to both consumers AND retail buyers.
Our experience is that retail buyers care about one thing above all else; what they think will sell.
With expert guidance we've:
◆ Re-constructed the product lineup;
◆ Brought consistancy to the product range so that consumers are able to easily recognise that they are looking at a PUMP Audio product without necessarily seeing the brand name from the "design language" alone;
◆ Brought the MSRP pricing in line with what is expected from our target retail buyers;
◆ Re-worked the trade pricing on products to give each channel the margin they expect;
◆ Brought consistency to the branding across all products, packaging and marketing material;
◆ Brought consistancy and meaning to the product names so that they make sense in the context of the brand narrative;
These actions have been carried out under the mentorship of Gordon Anderson and Peter Blampied, who are now board members of PUMP Audio.
Our strategy for driving volume over the next six months is as follows:
We've identified exactly where PUMP Audio sits in the marketplace using insight from people who have done it before.
◆ We only make headphones that we LOVE and use ourselves;
◆ We try to be better than the competition in EVERY meaningful way from a user perspective:
- Open box experience;
- Market leading service, aftercare and guarantee;
- Brand image association.
◆ We continually improve and never compromise on our core values or brand promises;
◆ We listen to our Friends (customers);
◆ We make sure that EVERY Customer walks away from every contact with us with a *good feeling*.
Values we have amended since the first round:
◆ "We try to always do things differently.".
Although we still do things differently from other headphone brands in many significant (we believe good) ways, we have become much more aligned with how the best brands do things in areas such as:
- Identifying their market positioning;
- Their brand message consistency;
- Their focus on appealing to retail buyers.
In these ways we have really "grown up" as a brand over the last 10 months and it has resulted in a significant increase in interest and orders from the trade (as shown through QVC and Frequency).
Please note that the research above is based on the company's own assessment of the market.
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