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Klipsch Stresses Core Values Over Momentary Trends

Klipsch wants to bring as much focus and clarity to its marketing efforts as its horn-loaded speakers bring to audio reproduction, the company says.

In shipping its revamped Reference series and phasing out its Legend series, Klipsch is stressing what executive VP T. Paul Jacobs called the Klipsch brand’s core values, which include horn-loaded full-size speakers, particularly tower speakers, that deliver power and detail.

“The original Klipschorn was based on this,” Jacobs said. “People [surveyed Klipsch owners] told us to be what we have always been” and “not compromise our values” to follow the market trend of the moment.

“We started to get into products that compromised who we were,” Jacobs admitted, referring to slim towers with built-in powered subwoofers. “Horns are who we are, and we’re one of the few suppliers building horn-loaded speakers.”

Closing out the Legend series to focus on Reference will also help Klipsch stay on message, said David Rutz, senior VP of marketing and product development. Reference and Legend were around the same price points, so dealers cherry-picked models from both lines if the models “made sense with the other speakers they had on the floor,” he explained. “That made it difficult for consumers to understand what we were about.” It also added to promotional expenses.

“The new Reference line [shown at CES in January ] takes the best of Legend and the previous Reference line and combines them so they’re very easily understandable,” Rutz continued.

Consistent visual cues such as copper-colored drivers will also help deliver a consistent message to consumers.

Despite getting off message in the recent past, Klipsch has taken top dollar share in the specialty A/V channel in calendar 1998, 1999 and 2000, according to NPD Intelect statistics cited by Jacobs. Among all channels, the brand also moved up in speaker share from third in 1998 to second in 1999 and 2000, he said. Bose remains far ahead with number one dollar share, although its share also includes the company’s electronics/speaker Lifestyle systems, he said.

Klipsch said it expects its new products to further increase its share without an expansion in distribution. “We are strong in the $800-$1,200 per pair market, and the new products will help us capture more high-end dollars,” Jacobs said.

The new series is priced up to a suggested $2,200/ pair and features three floorstanding towers, a center channel and a surround pair. Three powered subwoofers are due in September at $1,000-$1,700.

Klipsch is dropping two Reference towers with built-in powered subwoofers because “they didn’t deliver on the Klipsch promise,” said Rutz.

With the new models, “we can do a better job of penetrating our existing distribution to gain business,” Jacobs said. As part of that drive, Klipsch plans “a more aggressive approach to the residential contracting business,” he added. Details of the approach were not announced at press time.

Being one of the few suppliers of horn speakers, Jacobs noted, “puts you on the defensive,” so the company will promote the horn advantage more aggressively to consumers, but not just to gain new customers. Although existing Klipsch customers are enthusiastic about their choice, Jacobs said, they’ve “asked us [in surveys] to help them feel better about it. They want us to brag about it, make them feel proud about what they own” at a time when many suppliers are stressing small bookshelf speakers and lifestyle-oriented home theater in a box solutions, he explained.

Many of the new compact speakers and solutions, Jacobs noted, come at the expense of performance. “Mediocre products don’t enhance the future of the industry,” he said.

Many of the solutions, he added, “take people out of the market for high-quality hi-fi” because they’re easier for many salespeople to sell. Specialty retailers as well as big retailers are concerned about this, he said.