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Kenwood Has New Online CE Sales Rules

has set new policies and hired Net Enforcers
to track down unauthorized online

“[Kenwood] will aggressively enforce
our policies and guidelines with the purpose
of restoring and maintaining integrity
to the process of merchandising and
selling [our] products on the Internet,”
said senior VP Keith Lehmann.

The plan, “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,” Lehmann said.

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.”