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D&M: Reseller Plan Protects Brand Equity

4/18/2011 12:01:00 AM Eastern

WEEHAWKEN, N.J. — D&M Holdings has launched
a reseller authorization online portal which, among
other things, will “protect brand equity,” according to
Phil Cohn, senior VP of sales.

The plan, which was revealed last Monday, a day
before the D&M press event, here, which unveiled
Denon’s IN-Command AVR series and reviewed
Boston Acoustics introductions from CES in January,
in part, prohibits third-party sales and transhipping,
as well as acknowledging a new unilateral advertised
pricing policy for its brands.

D&M, which also markets the Marantz America
brand, said the key to the plan is a reseller authorization
online portal that provides all Denon, Marantz and
Boston Acoustics resellers, as well as professional integrators,
“with an opportunity to partner more closely
with all three brands to help maintain sustainable profit
margins and grow their businesses,” D&M said.

The portal is available for all dealers who purchase
directly from the three brands, as well as those who purchase through third-party distributors and provides
the companies with visibility to everyone representing
their brands in the marketplace.

The new web portal requires all dealers and distributors
of D&M products to register and agree to specific
guidelines, including the prohibition on third-party sales
and transhipping, as well as acknowledging a new unilateral
advertised pricing policy for these brands.

In addition, it clearly outlines the prohibition of internet
sales unless authorized to do so through a much more
rigorous screening process, D&M said.

The web portal is the cornerstone of a multi-tiered
strategy to effectively manage channel sales for all three
brands, increase transparency, and partner more closely
with all authorized resellers. As part of the ongoing effort
to ensure that end users purchase only from authorized
resellers capable of communicating the Denon, Marantz
and Boston Acoustics technology, innovation, performance
and brand benefit messages, all current resellers
and all future prospects are required to visit the web portal
and electronically sign revised reseller agreements,
the company said.

D&M also reported that almost 99 percent of its resellers
have signed their revised and fully confidential agreements
via the online portal and acknowledged the new
unilateral advertised pricing policy. Those who have not
completed the process are unable to place orders or represent
the brands until they do so and are approved, the
company said.

D&M Holdings’ North American president Bob Weissburg
said the authorization program “will allow us to be
more strategic and focused in all channels, guard and
protect our brand integrity, forge stronger relationships
with our dealers, and also proactively monitor and take
swift action to halt practices such as illegal transhipping
and misuse of our intellectual property.”

He added, “We take our brand and market position
very seriously, and this channel management initiative
is an important step forward in helping us protect and
reward our valued and indispensible authorized reseller
network for all three D&M brands.”

Weissburg noted that unauthorized dealers and web
retailers are “more aggressive” in the past year in selling
products and that “One of the reasons why we are doing
this is to dry up the source of transshipping and… aggressively
close the back door.”

Cohn said, “We recognize that for our authorized resellers
and integrators to invest in ‘telling our story’ they
must be able to expect a certain level of profit from our
brands. With this initiative, they will have yet another important
tool to help grow their businesses.”

And he added that this effort, “Is not about restricting
commerce… but about stopping transshipping, grey
market products which hurt profitability.”

The program also enables D&M to “capture relevant
information [about retailers and resellers] to increase
collaboration with [them] and establish plans for healthy
growth.”

When asked about the supply chain and inventories
of the new Denon introductions, among other D&M introductions,
Cohn said, “All of our new introductions are
on schedule. There may be some problems with current
models, but shipments of the new line[s] are on time. But
most importantly all of our Japanese employees are okay.”