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Revamped Aiwa Announces New Direction

1/20/2003 02:00:00 AM Eastern

Aiwa came to CES with a new strategic direction, a more focused product line and distribution strategy, a new logo, and plans for an aggressive springtime advertising campaign to revitalize the brand in the United States.

U.S. marketing will be directed by San Diego-based Aiwa Strategic Accounts Partnership (ASAP), a subsidiary of Sony Corp. of America, the parent of Sony Electronics. The subsidiary will sell and market Aiwa products independent of Sony's U.S. sales and marketing teams. In Japan and other foreign markets, Sony and Aiwa sales and marketing staffs are shared.

ASAP reports to Aiwa Business Center in Japan, created Dec. 1 when Aiwa was integrated into Sony's electronics business.

In describing his relationship within Sony, Business Center president and Sony veteran Masaru Hirauchi said he works with the presidents of each Sony product company, presenting them with product designs "that they make according to our strategy." The Business Center maintains its own engineering staff and uses Sony's R&D platform and production facilities, he said.

In the U.S., ASAP president Hiroshi Takahashi, also a Sony veteran, heads a 20-person staff that in February will reside in a Sony San Diego facility, where ASAP can tap into Sony's IT network to communicate in real time with factories in Asia and Japan, Takahasi said.

Private-Space, PC-A/V Focus: The subsidiary will spearhead efforts to reposition the brand with an increased focus on products for use in consumers' "private space" and, longer term, on products that enhance consumers' enjoyment of audio and video on the PC, Hirauchi said.

Private-space products include small TVs, combination TV/VCRs and personal audio products that could be enjoyed in bedrooms, bathrooms, studies and venues away from the living room and office. The company will continue to offer traditional A/V products, such as DVD players and HTiBs, but the focus on "private products" will grow, Hirauchi claimed.

To enhance A/V enjoyment from a PC, Aiwa will offer such products as minisystems with USB ports to amplify MP3 files and streaming music from a connected PC. The first two such products, featuring PC-complementing styles, are part of the company's 2003 lineup. One is equipped with a five-DVD changer to play movies on a PC screen. Both systems' remotes also control access to the PC's music content, and they come with bundled WinAmp3 software and front-panel game-machine connections.

The 2003 lineup also includes four more traditional minisystems, five microsystems, an HTiB with DVD-receiver, a 13- and a 20-inch flat-tube TV, a DVD player with MP3-CD playback, a DVD-VCR combo, a four-head VCR, five car-CD head units, five headphone CDs, two personal cassette players and four headphones. Current products with the old logo will be phased out in coming months.

Niche Targets: Although many products in the spring line are traditional by most standards, U.S. Aiwa will be free to develop niche products that a broad-based high-volume company such as Sony can't because of its focus on a broad customer base, Hirauchi contended. He called Aiwa the brand "where Sony will try innovative and challenging [product concepts] first." Within Aiwa, the U.S. operation will "create new business models" that Aiwa could replicate in other countries, he said. The U.S. subsidiary, added Sony corporate VP Hideki Komiyama, "will be the test bed for a lot of new products."

Such products include prototypes shown here of a tiny digital camera and a compact image viewer that are small and fashionable enough to appeal to women, Hirauchi said. Aiwa could even partner with cosmetics and handbag suppliers to package and market the products, he said.

To coincide with the product rollout, Takahashi said, ASAP plans a spring brand campaign that will use "select certain powerful media" in a promotional effort that will be more aggressive than anything Aiwa ever did before in the U.S. Details are still being ironed out, he said. The effort will complement a global brand campaign, Hirauchi noted.

Because retail consolidation "is most advanced" in the U.S. compared to all other countries, Aiwa will focus its marketing to the top 10 retailers who account for more than 80 percent of electronic sales, Takahashi said. But the company "won't deny [distribution to] regional A/V specialists in the future," he told TWICE. The distribution strategy precludes distributors, who will be phased out as inventories of current product are sold off. "We want close communication with the [retail] customer," he added. Takahashi also vowed that Aiwa would be "involved more in retailers' planning" to remove some guesswork and keep inventories in balance. As part of the close-communication effort, ASAP will use Sony's EDI and extranet capabilities.

Within about two years, Aiwa could modify its strategy if it finds aspects that aren't working out, Hirauchi said.

Last year: At this time last year, before Sony announced plans to buy all of the Aiwa stock that it didn't own, Aiwa had unveiled another new marketing strategy. It was to include a greater selection of lifestyle-oriented products that would appeal to high-end catalogs and small and regional A/V specialty retailers that the company hadn't tapped as successfully as it would have liked. The product changes were also meant to strengthen the company's position in catgeories other than portable products and personal entertainment products such as shelf systems.

The company had also unveiled a hard-disc music jukebox, small LCD TVs, an expanded selection of home-theater-in-a-box (HTiB) systems, and a broader selection of mini and microsystems.