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Harman Consumer Preparing Major Marketing Efforts

7/28/2009 02:17:44 PM Eastern

Stamford, Conn. - The
Harman Kardon, Infinity and JBL audio brands in the coming months will begin to
rebuild distribution, launch new products and marketing programs, and differentiate
themselves from one another more than they have in the past.

Harman Consumer
executives told TWICE that the changes will deliver growth for the first time
in at least two years, said David
Slump, president of Harman Consumer. "One year from now, there will be an
amazing story about where Harman is going in the U.S."

Since last year, the Harman group has
been part of a Harman International restructuring
that eliminated SKUs that didn't generate revenue or margin, eliminated
separate sales, marketing and product planning staffs for each brand, and moved
the group's U.S.-based offices to Northridge, Calif., earlier this year from Woodbury,
N.Y.

As part of the corporate changes, sales
and marketing of other Harman audio brands was consolidated and moved from Woodbury
to Elkhart, Ind., to the Harman
performance AV
(HPAV) group.

The consumer group
will reveal many details of its planned strategy in October, focusing first on
Harman Kardon, JBL and AKG, which was recently launched in the U.S. as a
consumer headphone brand. Details of Infinity's changes will likely follow. "It
will be an incremental rollout," Slump emphasized.

As part of the
rollout, Harman will create "a much crisper identity for each brand," Slump
said. "We'll push for more differentiation." In the past, group brands "did
their own thing," leading to overlapping product positions, he explained.

As it touches up
the brands' identities, the group is also planning to strengthen distribution
to create "wider and deeper penetration" in all channels, from big-box
retailers to specialists and installers, said Jim Foster, VP/GM of Harman Consumer (Americas).

The group sells car
audio products and multimedia speakers (PC speakers and iPod speaker systems)
through Best Buy, multimedia speakers through Target and Apple stores, home and
car audio though Amazon.com, home and car through distributors, and home and
car direct to independent retailers and installers.

Distribution plans
include a greater focus on the custom channel. That attention will manifest
itself at the September CEDIA Expo, where the group will focus on launching new
Harman Kardon products.

The HK brand has
been offering only a handful of A/V receivers under $1,000 over the past 12 to 18
months, and the group plans to bolster the brand's selection of more than
$1,000 AVRs, Foster said.

As it strengthens
distribution, the group "will be smart about it" to ensure the channel "fits
the brand," Foster added.

For its distribution
partners, "We have been building a team to dig into NPD and consumer
demographic data to unlock how we will promote and display the products," Foster
said. The group will "take the consumer insights and go to the retailer with
distribution ideas and ways to promote in their stores."

Likewise, the
group will use insights into consumers' needs and aspirations rather than "the
next new feature" to drive its ad messages, Slump said. Consumer insights will
also drive changes in product design, including features, he added.

To get new
products into stores in a timely manner, the group has been revamping operations
and management, including supply-chain management. "We will be the best in
class very shortly [in operations and planning]," said Foster.

The group has met
with key retailers during the past 30 to 60 days to "share some of the brand architecture,"
Foster said. During the first week of August, the group will meet with its reps
to share details. Meetings with distributors and independent retailers will
follow.