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Kenwood Seeks To Bring Order To Online Sales

4/21/2010 03:19:58 PM Eastern

Long Beach, Calif. - Kenwood
said it will restore integrity to the online selling of its mobile electronics
products by initiating new policies and hiring Net Enforcers to track down
unauthorized online merchants.

The company "will aggressively enforce our policies and
guidelines with the purpose of restoring and maintaining integrity to the
process of merchandising and selling Kenwood products on the Internet," said
senior VP Keith Lehmann. The plans, he said, "will be welcome relief" to
authorized retailers that have been "challenged by the online presence of
Kenwood products being sold by unauthorized agents and at ridiculously low
prices."

Under its new policies, Kenwood will require all authorized
Kenwood dealers that want to sell online to get an Authorized Internet Retailer
agreement, which will be separate from their existing Master Authorized
Retailer agreement and will control online merchandising and selling practices.
Kenwood's Minimum Advertised Pricing (MAP) policy, for example, will apply
under the agreement to all stated prices on a dealer's Web site, including
"in-cart" prices, he said. Kenwood has also clarified its
transshipping-restriction policy to specifically include dealers that sell to
unauthorized agents that in turn sell Kenwood products on the Internet, he
added.

 Dealers that violate the policies "will face a
progressive enforcement schedule that includes purchase restrictions, reduction
in program discounting and possible cancelation of the dealers' authorized
retailer status," the company said.

To help Kenwood enforce its policies, the company hired Net
Enforcers, described by Kenwood as an "intellectual property enforcement and
brand-protection agency with a proven ability to scrub the Internet, find
offending Web sites, and report all copyright, trademark and authorized-distribution
violations to Kenwood."

Lehmann noted that the online share of the mobile electronics
aftermarket has grown in recent years. The NPD Group's retail tracking service,
he said, found that the mobile electronics specialty channel's share of aftermarket
dollar sales, including portable navigation devices, was "relatively flat from
2007 to 2009," but share held by the e-commerce channel gained more than 6 percentage
points during that time. "We believe the reason for this share growth is the
convenience of the Internet and the trust demonstrated by more consumers who
would purchase products online," Lehmann said. However, he noted, "also believe
that this trend can breed chaos and confusion unless firm merchandising and
selling guidelines are implemented and enforced by the brand."

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