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Denon Draws U.S. Marketing Roadmap

Pine Brook, N.J. — Denon has expanded its sales every year since 1996 and is poised to increase sales once again for the fiscal year beginning March, despite the flagging economy and a flat home audio market, said sales and marketing VP Steve Baker.

By the end of calendar year 2002, the company expects to have more than doubled its receiver market share in units and dollars compared to 1997, he added.

From January to August, the company posted a 20 percent dollar gain in sales, which consists of home electronic components, DVD players and home audio systems, but not separately available home speakers. In comparison, CEA statistics show industrywide dollar sales in the combined categories fell 1.5 percent from January to July.

In recounting past performance and outlining the company’s roadmap, Baker said Denon has solidified its relationship with its core early-adopter and enthusiast customers who purchase components through regional and local specialty stores. The company, however, will continue to broaden its customer base to include more college students and women through a variety of product launches and marketing activities.

The marketing activities include participation in Thunder Dorm, a CEA-sponsored college-marketing effort that for the second year is bringing the latest home audio gear to college campuses for outdoor demonstrations. To enhance its appeal with women, Denon recently began marketing the D107 wall-hanging stereo system.

Home-theater-in-a-box systems, he continued, are intended to extend the company’s appeal to customers who will spend more for quality but also want ease of use and a simplified buying decision.

Also to reach out to new customers, the company became a charter supplier to the Great Indoors [with its full line] and is “experimenting with other ways to get the word out,” including the placement of the D107 in the American Airlines SkyMall catalog, Baker said.

The company also plans:

  • its first distributed-A/V products, given that “a growing number of our dealers have custom divisions, Baker said. “You’ll hear more at CES,” he said.
  • a reentry into the high-end A/V processor market to complement its only other component separate, a two-channel integrated amp.
  • products with Internet capability.

Denon continues to mull over an entry into the video display market.

Other product plans include an SACD/DVD-A/V player, due “relatively soon,” Baker said.

The company will continue to target specialty retailers, excluding national chains and mass merchants, with components appealing to enthusiasts and early adopters. HTiB distribution, on the other hand, extends to Sears Brand Central.

“We have around 500 [specialty A/V dealers] with just over 1,000 stores,” Baker said. That excludes Sears stores carrying HTiBs.

To underscore its strength among its targeted core customers, Denon cited NPD Techworld retail-level sellthrough statistics, which show Denon significantly closing the gap between itself and the market leader in retail-level sales of home receivers, amps and tuners within specialty-A/V distribution channels. Month by month in 2001, Denon was 5 to 19 percentage points behind Yamaha, but in April 2002, it came within one point, and in May hit No. 1 with a 28 percent share, compared to Yamaha’s 25 percent.