Harman Consumer Preparing Major Marketing Efforts
Joseph Palenchar -- TWICE, 7/28/2009
Stamford, Conn. - The Harman Kardon, Infinity and JBL audio brands in the coming months will begin to rebuild distribution, launch new products and marketing programs, and differentiate themselves from one another more than they have in the past.
Harman Consumer executives told TWICE that the changes will deliver growth for the first time in at least two years, said David Slump, president of Harman Consumer. "One year from now, there will be an amazing story about where Harman is going in the U.S."
Since last year, the Harman group has been part of a Harman International restructuring that eliminated SKUs that didn't generate revenue or margin, eliminated separate sales, marketing and product planning staffs for each brand, and moved the group's U.S.-based offices to Northridge, Calif., earlier this year from Woodbury, N.Y.
As part of the corporate changes, sales and marketing of other Harman audio brands was consolidated and moved from Woodbury to Elkhart, Ind., to the Harman performance AV (HPAV) group.
The consumer group will reveal many details of its planned strategy in October, focusing first on Harman Kardon, JBL and AKG, which was recently launched in the U.S. as a consumer headphone brand. Details of Infinity's changes will likely follow. "It will be an incremental rollout," Slump emphasized.
As part of the rollout, Harman will create "a much crisper identity for each brand," Slump said. "We'll push for more differentiation." In the past, group brands "did their own thing," leading to overlapping product positions, he explained.
As it touches up the brands' identities, the group is also planning to strengthen distribution to create "wider and deeper penetration" in all channels, from big-box retailers to specialists and installers, said Jim Foster, VP/GM of Harman Consumer (Americas).
The group sells car audio products and multimedia speakers (PC speakers and iPod speaker systems) through Best Buy, multimedia speakers through Target and Apple stores, home and car audio though Amazon.com, home and car through distributors, and home and car direct to independent retailers and installers.
Distribution plans include a greater focus on the custom channel. That attention will manifest itself at the September CEDIA Expo, where the group will focus on launching new Harman Kardon products.
The HK brand has been offering only a handful of A/V receivers under $1,000 over the past 12 to 18 months, and the group plans to bolster the brand's selection of more than $1,000 AVRs, Foster said.
As it strengthens distribution, the group "will be smart about it" to ensure the channel "fits the brand," Foster added.
For its distribution partners, "We have been building a team to dig into NPD and consumer demographic data to unlock how we will promote and display the products," Foster said. The group will "take the consumer insights and go to the retailer with distribution ideas and ways to promote in their stores."
Likewise, the group will use insights into consumers' needs and aspirations rather than "the next new feature" to drive its ad messages, Slump said. Consumer insights will also drive changes in product design, including features, he added.
To get new products into stores in a timely manner, the group has been revamping operations and management, including supply-chain management. "We will be the best in class very shortly [in operations and planning]," said Foster.
The group has met with key retailers during the past 30 to 60 days to "share some of the brand architecture," Foster said. During the first week of August, the group will meet with its reps to share details. Meetings with distributors and independent retailers will follow.
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