Kenwood Seeks To Bring Order To Online Sales

By Joseph Palenchar -- TWICE, 4/21/2010

Long Beach, Calif. - Kenwood said it will restore integrity to the online selling of its mobile electronics products by initiating new policies and hiring Net Enforcers to track down unauthorized online merchants.

The company "will aggressively enforce our policies and guidelines with the purpose of restoring and maintaining integrity to the process of merchandising and selling Kenwood products on the Internet," said senior VP Keith Lehmann. The plans, he said, "will be welcome relief" to authorized retailers that have been "challenged by the online presence of Kenwood products being sold by unauthorized agents and at ridiculously low prices."

Under its new policies, Kenwood will require all authorized Kenwood dealers that want to sell online to get an Authorized Internet Retailer agreement, which will be separate from their existing Master Authorized Retailer agreement and will control online merchandising and selling practices. Kenwood's Minimum Advertised Pricing (MAP) policy, for example, will apply under the agreement to all stated prices on a dealer's Web site, including "in-cart" prices, he said. Kenwood has also clarified its transshipping-restriction policy to specifically include dealers that sell to unauthorized agents that in turn sell Kenwood products on the Internet, he added.

 Dealers that violate the policies "will face a progressive enforcement schedule that includes purchase restrictions, reduction in program discounting and possible cancelation of the dealers' authorized retailer status," the company said.

To help Kenwood enforce its policies, the company hired Net Enforcers, described by Kenwood as an "intellectual property enforcement and brand-protection agency with a proven ability to scrub the Internet, find offending Web sites, and report all copyright, trademark and authorized-distribution violations to Kenwood."

Lehmann noted that the online share of the mobile electronics aftermarket has grown in recent years. The NPD Group's retail tracking service, he said, found that the mobile electronics specialty channel's share of aftermarket dollar sales, including portable navigation devices, was "relatively flat from 2007 to 2009," but share held by the e-commerce channel gained more than 6 percentage points during that time. "We believe the reason for this share growth is the convenience of the Internet and the trust demonstrated by more consumers who would purchase products online," Lehmann said. However, he noted, "also believe that this trend can breed chaos and confusion unless firm merchandising and selling guidelines are implemented and enforced by the brand."