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Denon's AVR-3803: Home Alone

7/26/2004 02:00:00 AM Eastern

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Success Story: Denon AVR-3803 Home Theater Receiver
Relationships, Consistent Image Aided Denon Sales, Dealers Say

PINE BROOK, N.J. Being alone with popular features at a given price point is one of the keys to successful sales in the home theater receiver market. Ease of use and a reputation for performance are others.

Denon scored on all three counts with the AVR-3803 home theater receiver, found by The NPD Group to be the top-selling receiver in dollars through brick-and-mortar retailers for the 12 months ending May 2004. Not bad for a product that accounted for only 1.6 percent of industrywide unit receiver sell-through during the period.

In dollars, the Denon model accounted for 5 percent of total receiver sales of $457.2 million during the time, besting the second-place model's 4.7 percent.

At an average $938 during the period, the AVR-3803 was the highest-priced receiver among the receiver market's 10 dollar-sales leaders. It retailed for more than three times the average industrywide sell-through price of $311, and it cost considerably more than the average $183 price of the second-best selling receiver, NPD found.

The 3803 was closed out earlier this year but promoted through May by retailers.

Among the top 10 receivers, only two other models both from Yamaha — cost almost as much as the Denon piece. Those models, the RXV-1400 and RXV-2400, were priced at an average $723 and $898, respectively, and ranked fifth and sixth in dollar volume. They might have ranked higher for the 12-month period had they been available for the full 12-month period instead of for nine months beginning September 2003.

Eight other models in the top 10 were priced at averages ranging from $137 to $447.

Denon executives attributed their model's success in large part to being the first — and for awhile, the only — $1,199-suggested receiver with such features as composite-video conversion to component video, wide-band component-video switching at 100MHz, and powered (vs. preamp-output) second-zone capability.

Marketing manager Jeff Talmadge also pointed out that early in the 3803's life cycle, "there weren't many 7.1-channel receivers at $1,200."

The powered second-zone capability, called a Power Amplifier Assign function by Denon, gave traditional retailers the ability "to add more products to a sale," Talmadge noted. "They could get the DYI customer to buy a pair of outdoor speakers rather than use a boombox."

President Steve Baker cited additional features "that drive retailers to recommend us." Consumers, he said, "don't want to make the wrong choice, so if they decide later that they want multiroom sound, the receiver can do it. And if they get a TV with component input, they can use it."

"Little details" drove salespeople to recommend the unit as well, Baker said. The details included discrete on/off IR codes on the remote for each zone to prevent someone from accidentally turning off the home theater's audio when all they wanted to do was turn off the second zone.

Ease of use and setup also drove salespeople to recommend the receiver, Baker added. The 3803 "was easier to use and set up compared to others in its class," thanks to in part to video conversion that made it unnecessary to run multiple composite, S- and component-video cables to a TV set.

Promotion also played a role in the 3803's success. Many dealers aggressively advertised the receiver because they were able to "sell it to a wide range of consumers with confidence," Baker said.

A Beyen Corp. analysis of retailers' receiver advertising found that the 3830 was advertised 320 times during the 12 months ending in May 2004 by such retailers as Ultimate, Good Guys, Sixth Avenue, American, Sound Track, Magnolia Hi-Fi and Tweeter.

The Denon piece was advertised twice as often during the 12-month period than the two Yamaha pieces sold at an average $723 and $898. Each of the three Sony pieces that ranked in second through fourth places in dollar volume was advertised more than five times as often as the Denon piece, the Beyen analysis also found.