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D&M Outlines Global Reorganization Strategy

9/13/2011 04:16:26 PM Eastern
Mahwah, N.J. - D&M Holdings has reorganized its global operations to move marketing and product-development decisions closer to local markets, bring retailers more aggressively into the product-planning process, and stimulate technology collaboration among its consumer and professional audio brands and OEM speaker business, chairman and CEO Jim Caudill said.

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Other changes will improve supply-chain management, bring efficiencies to procurement, and move the company into new audio-related product categories -- including a more aggressive headphone lineup -- while maintaining the premium positions of the Denon, Marantz and Boston Acoustics brands, he said.

The changes will "re-energize the company for growth" in its "relatively mature" product categories, said Caudill, who came to D&M only a year ago from Stanley Black & Decker.

During a presentation to the trade press at the company's headquarters here, Caudill said he has also reorganized the company's eight business units into three divisions -- consumer, professional and OEM speakers, mainly automotive OEM speakers. Each division now has its own global president to provide dedicated leadership resources to those businesses, he said. Previously the eight business units reported to Caudill.

The consumer division president is Tim Bailey, who took the reins six months ago and whose business experience also includes time at Stanley Black & Decker. His division includes Denon, Marantz, Boston Acoustics and McIntosh, while the pro division consists of D&M Professional, Allen and Heath, and Calrec.
Denon Plans Online Direct Sales To Consumers
BY JOSEPH PALENCHAR
Mahwah, N.J. - Although D&M Holdings said it has no plans for big shifts in distribution for its consumer brands, chairman/CEO Jim Caudill did say Denon would begin selling all of its products direct to consumers over its own web site but at suggested retail prices.
Denon products are already sold through authorized online retailers.
The intent is to promote the brand and share web content with retailers who can use the content on their own web sites, the company said.
Details of the plans, including timing, will be announced next month.
Denon will join other major audio suppliers that also sell some or all of their products direct to consumers.

 


With these and other changes, such as the appointment of the company's first global operations senior VP, Caudill said he is transitioning the company from a holding company of aggregated brands and business units that operated "almost in silos" to a global operating company with all brands operating as part of the same team.

Collaboration among brands will enable the brands to capitalize on their scale with vendors and, in a "big shift," improve technical collaboration "to better capitalize" on "some of the best technology assets" in the audio industry, Caudill said.

The new global operations senior VP will oversee all three business units to improve supply-chain management, share best practices and deliver global cost leverage in procurement, Caudill said. In the past, D&M didn't have a "disciplined global approach" to improve fill rates and on-time shipments, he noted.

In moving marketing and product development closer to geographic regions around the globe, D&M brands will be able to develop products that are "consumer relevant" and meet local-market needs, Caudill said. The strategy will also help D&M brands work with local dealers to develop go-to-market strategies.

"Product planning and marketing have historically occurred in Japan," said Caudill, and the company's regions have been treated as "sales and distribution arms."

D&M had "no marketing infrastructure in North America," he said, pointing out that as D&M bought up brands, local marketing infrastructure and product planning withered.

For that reason, the company is looking to hire a North American VP who will take charge of product planning and marketing for the Denon and Marantz home audio brands in the region. For Boston Acoustics, those tasks are handled by recently hired VP/GM Mitch Nollman, formerly with Bose.

Similar positions have been established for the company's Asia-Pacific and European regions.

The company is also looking to hire a new North American president for its consumer division.

Getting closer to local markets will give D&M brands "real-time feedback from the market" and enable them to use that knowledge to "build out adjacent categories," Caudill said. "Our brands have earned the right to be broader than just the categories they are in...while maintaining their premium audio position."

Besides getting closer to local markets, D&M will improve "transparency" to "reach out to distribution partners and collaborate and share ideas on new products," he said. D&M will "be much more collaborative in the planning process with [retail] partners."

He promised "a much higher level of engagement with our retail partners" as well as improved marketing communications "to do a better job positioning the brands" and new packaging that will better communicate product benefits and brand positioning.

The company will also put "a lot more rigor" in consumer research in a "quantitative or informal way," Caudill said.

 In developing plans to enter new product markets, the company has already identified "growth areas" in its consumer, professional audio, and OEM speaker businesses "to leverage technologies in adjacent [product] markets," Caudill said.

Headphones will be one of the first categories into which D&M consumer will expand aggressively in North America, where it currently offers headphones only under the Denon brand. Digital media management is another potential area to enter, he said.

To facilitate expansion into new categories, management is letting employees know that "change is OK," particularly in thinking about new types of products, he said.

As part of that effort, the company must retain audio-industry talent but balance that with "individuals from outside who will bring a fresh way of thinking," Caudill said. For its new North American president, for example, Caudill is looking for an industry veteran with industry insights and knowledge, but the new North American marketing VP need not be from within the industry because disciplined marketing processes can be applied to multiple industries, he said.

As the company rolls out its new strategies, it does not plan big shifts in the distribution channels for the Denon, Marantz and Boston Acoustics brands, whose products are available through big-box retailers, the specialty and custom channel, and authorized Internet retailers, Caudill said

The benefits of the changes will take a little while to take hold, he admitted. It will take 12 to 18 months to see the first new products resulting from the new product-development strategy and 12 or more months for dealers to begin enjoying some of the benefits of supply-chain management improvements, he said.

In the next 12 months, he added, the company will announce new product categories, and "headphones will be among them."

The Bain Capital-owned company, incorporated in Japan, employs 2,500 people around the world. As a privately held company, it does not divulge sales statistics.
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