JVC Reaches For Higher Consumer Profile

By Steve Smith -- TWICE, 10/27/2003

Sidebars:
A Historical Look At Product Lifecycles

WAYNE, N.J. — JVC Company of America is not just letting its products do the talking anymore. The company is embarking on a $15 million print, Web and outdoor branding campaign this fall that targets specific consumer groups and shows how its products reflect and can improve their lifestyles.

And that's not all. JVC, whose new slogan is, "The Perfect Experience," also kicked off in-store demonstrations in 10 major markets this month that will run through Nov. 16 and are designed to educate consumers about JVC's HDTV products. As part of the promotion, JVC began a rebate program this month called "Build Your Own HD Universe," which runs until Jan. 31 and includes rebates ranging from $300 to $700 if consumers buy in-line combinations of the company's HD camcorder, D-VHS deck and designated HDTVs.

This veritable promotional blitz from a company that is usually low-key in this area is being led by two JVC veterans who took on new responsibilities this spring: Craig Geiger, executive VP/COO, and Karl Bearnarth, VP/corporate product strategy for JVC's marketing division.

While this media blitz, and other efforts, are a departure for JVC, both executives told TWICE recently that these efforts have been put in place to reinforce and expand JVC's retail distribution strategy and brand awareness.

"JVC hasn't changed really. It is still a step-up line that provides added value products to our retail base," Geiger said. "We want to take the next step … and emphasize performance and design in every category we participate in."

Bearnarth said the new strategy is a "blend of the old and the new. If you look at what made us successful, it had to do with product performance. The competence to make [consumer electronics] products perform well in the home takes years. With the industry changing rapidly, and digital being part of everything we do, we must translate our technology into high-performance, good looking designs."

The key for JVC is trying to make sure news of its products reaches the proper target audience. Take home audio for example, a category whose sales have suffered in recent years. In discussing audio, Bearnarth said that there is the impression in the marketplace that "audio is no longer important to Gen X or Gen Y customers. You talk to young people in that age group and you find that audio is incredibly important to them. They just aren't listening to a two-channel system in their living room or bedroom."

With its $15 million promotional campaign, JVC is taking a page out of its mobile division's playbook where Geiger said, "We have targeted very specific age groups [with advertising] and have had good success with it."

The new campaign, that will be featured in men's, women's, music, musician and entertainment magazines, Web advertising and sponsorship spots on major market TV news programs, targets the 25-to-34-year-old age group. "The campaign's objective is to differentiate JVC from other consumer electronics brands and build an emotional relationship with the consumer," Geiger said.

Celebrities that will appear in the JVC campaign include filmmaker Jerry Bruckheimer, rock band Nickelback, singer/ songwriter Lisa Loeb, snowboarder Shaun Palmer, musician Nikki Sixx and actress Donna D'Errico.

"Our campaign is using a celebrity-based approach and is focused on the lifestyles of the consumers, trying to explain how audio and video products fit into people's lifestyles," Bearnarth said. And while this campaign will conclude at the end of March 2004, the idea is to "build off of this campaign next year to develop a core demographic with which we are strong."

JVC's "Build Your Own HD Universe" product demonstrations taking place this month in Atlanta, Chicago, Dallas, Denver, Los Angeles, Miami/Fort Lauderdale, New York, Orange County, Calif., San Francisco and Washington are designed not only to promote individual products, but to illustrate the company's unique position in HDTV.

As part of the "HD Universe" effort, JVC claims that it is the only manufacturer that provides all types of HDTV products all in one line. The line includes HDTV plasma and D'ILA displays; what it says is the only HD consumer camcorder (model GR-HD1); the HM-DH40000 D-VHS deck that records HD broadcasts, and plays HD prerecorded movies; and the HD Dish receiver/DVR.

While JVC has begun to get the word out to consumers about its technology and products, the critical area — especially when it comes to HDTV — is retail training. In April, JVC formed the Retail Merchandising Department, or RMD, that took all the company's product trainers and detail people and, "put them under one umbrella," Bearnarth said.

"The goal of RMD is that each person will have a direct line with each of the divisions to get good information, to come up with training modules to teach themselves and then got out and teach retailers," Bearnarth said.

Geiger stated, "There are challenges for any retailer to communicate and explain digital products, especially HDTV. There are challenges for independent and national retailers. Consumers are smarter and more educated about technology than ever before. They do research on the Web and come into stores looking for answers."

And he noted that RMD personnel "will be able to specialize in specific areas of the country with specific retail locations. Each one of our people going to retail is a full-fledged trainer that can provide expertise about HDTV technology in general, or specifics about JVC products, for instance."

Which brings Geiger back to the main reason why promoting JVC's technologies and products is vitally important. "Our core business is still based on independent retailers. We are not going to change that. We do have national chains, but we want to give each channel some competitive advantage with our products."

When both executives were asked what they wanted to accomplish in the next 12 months, Bearnarth said, "We need to increase per store performance by SKU and increase the amount of value added products being sold at retail. Our products perform well at retail, but we want more step-up product to be sold."

Geiger spoke for many CE manufacturers as he said, "We have to increase market share. That is a sales issue, to increase our customer base, increase our brand equity and brand awareness. We want our retail base to continue to perceive us as a premium line."

A Historical Look At Product Lifecycles

Shorter product lifecycles in consumer electronics have always been a concern, but this issue has been all the rage since digital technology has taken over the industry.

In discussing the problem with Karl Bearnarth, JVC's corporate product strategy VP with its marketing division, he related historical examples that the company has used internally to illustrate the problem.

"The three examples we use are the turntable, VHS decks and DVD players. The turntable was developed in 1887 and sales didn't peak until the 1970s. The VHS VCR, as a single deck unit, was introduced in 1976 and didn't peak until 2000. And the DVD single deck player, which was introduced in 1998 will probably peak in sales this year."

He explained the differences in the markets that the three products were introduced into. "The turntable was introduced into a non-global economy. Markets were handled individually. There were no global markets and no global brands."

Meanwhile, VHS "was introduced into a global economy and the pace was quicker."

But with the DVD player, all restraints were off, according to Bearnarth. "DVD was introduced in a digital global economy, a high performance global economy, where to compete, you have to be a high performance global supplier."

He added, "You need to innovate faster, develop new designs faster and come up with new technologies, because if you don't, [individual] product categories become commodities faster."

Which is why for JVC, "the key focus of our company is to constantly innovate in design and performance. It is a given that cutting-edge technology must be there."