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Boston Acoustics Mobile Tightens Pricing, Distribution Policies

8/16/2011 01:36:40 PM Eastern

Peabody, Mass. - Boston
Acoustics adopted a unilateral advertised pricing (UAP) policy for authorized
mobile audio dealers and tightened up its distribution policies as part of a
plan to boost dealer profitability.

The polices apply
to authorized online dealers as well as to brick-and-mortar dealers that
purchase direct from Boston Acoustics and those that purchase through
distributors.

Boston Acoustic
mobile did not previously have a minimum advertised price (MAP) policy, only
suggested retails, said national sales manager Sanjay Sharma. Under the UAP
policy, he continued, "Dealers are free to advertise our products for whatever
they choose, and we are free to take action, or not to take action, for those
choosing not to follow UAP, including not selling them the line."

In another change,
dealers who buy through authorized distributors are "are now required to go
through the authorization process and agree to the terms of sale, which is an
enhancement to the previous policy," Sharma told TWICE.

These dealers,
direct dealers, and distributors are all required to register with a new web
portal to electronically sign revised reseller agreements, which include
product-rebate policies. The agreements also prohibit transshipping, which was
also prohibited in Boston's previous agreements as well.

"Our new channel
management initiatives will create stability in how our brands are positioned
in the market, and our authorized dealers should enjoy a more attractive
realizable margin that they can re-invest in driving performance brands like
Boston Acoustics," Sharma told TWICE.

The new strategy is
designed "to ensure that end users purchase only from authorized resellers
capable of communicating the Boston Acoustics technology, innovation,
performance and brand benefit messages," the company added in a statement.

Premium
manufacturers spend substantial sums of money on research and development,
product quality standards, and other practices "necessary to maintain and
protect their brand integrity," the company continued. "Likewise, the
authorized dealers for these manufacturers need to be able to earn the higher
profits necessary for them to reinvest, differentiate their businesses,
properly promote the products, and effectively communicate the premium brand
and technology messages."

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