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Denon, Boston Launch Products As Changes Kick In At D&M

Cleveland — The Denon and Boston Acoustics brands in the D&M Holdings stable launched new products and programs here during a dealer show, where executives promised that the benefits of multiple D&M restructuring initiatives will kick in during the second half.

The benefits include stepped-up dealer training, stepped-up dealer and consumer support, and newly aggressive marketing efforts, including a significant advance in the consumer and trade advertising presence of all D&M brands. Of the four largest D&M brands — Denon, Boston Acoustics, Marantz and McIntosh — only Boston Acoustics has had a visible advertising presence in recent years, said Bob Weissburg, D&M sales and marketing president. In fact, Denon hasn’t advertised in print publications in two years, he said, underscoring the significance of D&M’s planned multimillion-dollar second-half ad campaign. “We’ll spend more in 2006 than we did in the past two years,” said Weissburg.

D&M hopes to eventually boost its ad/public relations expenditures to 4 percent to 5 percent of sales to match the percentages spent by its peers, said Michael Angiletta, D&M’s strategic marketing VP. The focus of this year’s campaign will be to “reach new people” with specific products with specific benefits for specific applications, he said. The focus will mark a major change in advertising direction for Boston, he noted.

The ad campaign is the product of a D&M-wide strategic marketing group created last year to develop strategic programs for each brand based on what each brands’ executives want to accomplish, Angiletta explained. The group is also investing more in market research than the brands previously did, he said.

The group’s efforts will support a D&M-wide plan to boost average selling prices, Weissburg noted.

Meantime, D&M is continuing to build a consolidated training department for all brands, expanding the brands’ number of trainers to about 10 from seven, Weissburg said. A consolidated dealer and consumer support department for the Boston, Denon and Marantz brands is also nearing completion, he said.

The reorganizations are being accomplished without “homogenizing” the brands or blurring the brand’s unique positions, he stressed.

The changes will help D&M grow in 2006 to account for 10 percent of the combined dollar volume of industry sales of A/V receivers, HTiBs, component tuners, amplifiers and speakers across all distribution channels and for about 20 percent of all such products in the A/V specialty channel, he contended.

The company wants to acquire additional brands in the premium home-A/V market to complement its portfolio, possibly in display technology, he also said. “We’d like to be in the [flat-panel] display business someday, but this year is not the year,” Weissburg said, citing dramatic drops in average selling prices and an influx of suppliers. In its portfolio, D&M A/V brand Marantz is focusing mainly on front projectors, though it has some plasma displays, he said.

Further change was evident at Boston Acoustics, which has begun converting to a distributing-rep strategy to obtain more pure-custom accounts and plans to step up its presence at custom install trade shows.

The brand has also teamed up with a new industrial design company called Eleven to focus more on end-user solutions, including some that “might not be in our current [D&M] core categories,” said Boston Acoustics senior VP/general manager Eli Harary. The solutions might include some form of wireless technology, he added.

For Boston Acoustics, the current core categories have changed under D&M ownership, with the brand continuing to offer box and architectural speakers and small tabletop radios and CD radios. Boston dropped a small selection of A/V receivers and home theater systems developed as part of its pre-D&M diversification drive, and it dropped plans to develop a distributed audio system.

In other changes brought on by the new owner, Boston has implemented a new product development process to cut time to market by 50 percent, Harary said without specifying the number of months.

In new products, Boston launched a new flagship series. The E series of multiple-application speakers takes the brand further upscale at prices up to $2,500 each for a 6-foot floorstanding tower, which is the brand’s first four-way speaker. The series is not an open-distribution series, and it hasn’t been determined whether the E series will be sold through Boston’s newest account, Circuit City, said Phil Cohn, Boston’s sales and marketing senior VP.

Each of the E series models is sold individually because of an industrial design that allows them to be used as left or right speakers, surround speakers or center channels. They can be placed horizontally or vertically and mounted on a shelf, on an optional E-series stand, or on the wall. They feature extruded-aluminum cabinets with wood-veneer side panels that can be replaced with unfinished panels that can be stained to match any décor.

The five-SKU E series starts with the two-way $400 E40 with 1-inch tweeter and 4.5-inch woofer and includes $500, $600 and $800 models before jumping to the $2,500 E100 tower. Its $349-each floorstanding base is an option, as are wall brackets. Even the E100 can be placed horizontally for use as a center channel.

Boston’s next-most expensive tower is the VRM90 at $2,700/pair, and its next-most expensive bookshelf is the $1,000/pair VRM60.

Also new: the four-SKU XB series of powered subs from $279 to $679. They’re front-firing to be more flexible in placement than the down-firing subwoofers that were the brand’s previous focus.

For Denon, in A/V and stereo receivers, it is expanding the number of models with iPod connectivity and control, XM-ready capability and high-definition up-scaling HDMI outputs. Denon also launched what it said are the world’s first two A/V receivers that upscale all analog/video sources to 1,080p through their HDMI outputs.

In DVD, Denon expanded the number of models with up-scaling HDMI outputs to five of six models. Five upscale to 1,080i, and four of those also upscale to 1,080p. They’re Denon’s first DVDs capable of out-of-the-box 1,080p output. A previous model could be upgraded by consumers with a disc upload that turned on the player’s 1,080p feature.

The high-definition up-scaling devices are targeted to consumers “who invested in large advanced TV displays and DVD libraries,” said Denon president Stephen Baker. “And we’re trying to ensure they get the best possible performance in the products’ price ranges.”

With the launch of four new A/V receivers in its 10-SKU series for custom installers and A/V specialists, Denon is expanding iPod connectivity and control and XM-ready capability to six of nine models priced down to suggested $329. Denon is also incorporating both features for the first time into its derivative series of A/V receivers. All five models in the derivative line offer the two features at suggested retails of $299 to $1,099.

XM/iPod connectivity has also been extended for the first time to the brand’s stereo receivers, which start at $299. All three specialty receivers and the single derivative receiver offer the features. Connectivity and control for iPod requires the purchase of a $120 docking/charging station.

All of the new specialty A/V receivers are seven-channel models with 7.1-channel analog inputs for connectivity to new high-definition disc players. All feature HDMI 1.1 inputs and outputs capable of passing through 1,080p signals from an HD disc player, and the receivers decode 7.1-channel 96/24 PCM soundtracks transferred from HD discs via HDMI cables.

Specialty-series A/V receivers with HDMI inputs and outputs, but without HD up-scaling, now start at $799, down from $1,099. A continuing $1,999 model offers HDMI with 1,080i up-scaling, and the models with 1,080p up-scaling are the $7,000 AVR-5805 Mark II and $4,000 AVR-4806CI. Information on the HDMI capabilities of the derivative A/V receivers was unavailable.

The $4,000 and $7,000 models also expand the number of A/V receivers that stream music from an Ethernet-connected PC to three SKUs. The PlaysForSure-certified models control a PC’s Windows Media Player 10 application, which includes Internet radio, and display metadata on a connected TV.

XM-ready receivers with five-channel Neural surround decoding start at $329. XM broadcasts select channels in stereo-compatible Neural Surround.

DVD players that up-scale to 1,080i start at $169, and 1,080p output is available at $369, $849 and $1,499, in both the specialty and derivative series. The 1,080p models also play DVD-Audio and SACD discs. Up-scaling to 1,080i previously started at about $349 in Denon DVDs.