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Guest Commentary: Why a Multi-Brand Organisation Makes Sense for the CI Market (1/4/2008)

By Miles Brooke, DMi

My early dealings in a newly-emerging custom installation (CI) market began with Denon Pro. Five or six years ago, with no structure in place to deal with non-retail customers, the consumer division viewed CI dealers with considerable suspicion, often greeting them with "What d'you mean, you don't have a shop!?" Since then, things have changed and CI is now a key and vital part of our multi-brand business.

The Denon Pro and Marantz Pro brands were integrated in 2005. In April 2007, a decision was made to diversify and focus on our supply to the commercial and residential installation markets, and so DMi (Denon and Marantz Installations) was formed.

Offering the right products

Our goal was to offer a complete installation solution that meant that the installer did not have to deal with three or more different suppliers, and all of the paperwork and integration hassle that ensues. Creating the right mix of products was paramount, so we finalised on a range that would ensure maximum flexibility for integration and took into account installer and customer demand.

Along with our Denon and Marantz commercial install products, our portfolio includes Escient media servers, Boston Acoustics, and a selected range of Denon and Marantz CI AV amplifiers, DVD players, and iPod docking solutions. Later in the year we will launch a universal network solution for the control of our range of CI products.

Offering the right supply and support

Great product is one part of the story, but so is supply and support. With many companies consolidating resources in Europe, the challenges of providing first-class support and 'just in time' delivery increase.

It is important to have the right distributors in place. Alongside our key CI dealers, we also have developed a partnership with two distributors, Leisuretec and RGB Communications. On a contractual basis, these offer existing or new dealers our DMi range of products, and this can be a very handy ‘get out of jail’ option when the unexpected happens, as they can supply product at a competitive trade price next day from their UK stock.

Providing the right support is also crucial. In the event of an unlikely failure under warranty, we have a very efficient web-based service return solution, that ensures the minimum down time for the customer and the installer whilst a product is repaired or replaced. UPS are there the next day – or sometimes even the same day to collect.

Pricing

The majority of the products in DMI range are considered to be mid-range in price. With many of our more visible brands, pricing has to be both market competitive and offer our customer, the installer, a good return, and this continues to be a challenge in the face of web-based trading.

In terms of pricing, education is required for both the customer and the installer. From the customer's point of view, pricing information is not difficult to find and is the only easily identifiable yardstick. Purchasing decisions are therefore often based on this alone, with the result that installers face ever-eroding margins.

Installers need to keep their nerve and present strong and well-reasoned arguments about the extra value that they offer in terms of integration and new, scalable technologies. Every sale is an opportunity to establish a long-term customer relationship, based on levels of service and on-going support rather than just on price.

Conclusion

Although we are relatively new to the CI market, it is very clear that the key to a successful installation is an intuitive, simple operation of complex products, and the integration of these products into the day-to-day life of the user. This takes skill, and lots of time and effort - contrary to popular belief, those shiny products don't always communicate with each other straight out of the box!

Hence we are dedicated to supporting our appointed CI clients and distributors with product training, highly-effective support in the field, and a multi-brand offering that allows installers to create the complete solution for even the most demanding end-user.

Miles Brooke is UK General Manager for DMi.

www.dm-i.eu