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ericobrien

Klipsch Purchasing/Prices (Web vs. Retail)

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first I would like to thank Klipsch for posting the letter to begin with. I doubt that many other manufacturers would offer this info without being asked for it. It is easy to complain about the policy but Klipsch is not the only company that takes this approach. I do think it would be best for all of us if there were more dealers. Before Tweeter bought The Home Entertainment stores in Texas I never had a problem with the price. In the good old days I could walk in and ask what an item cost and know I was going to be quoted the best price they could give me. I never once had to haggle. Now I have been advised that the days of the great deals are over. With no other Klipsch dealer in Houston I am kind of stuck with whatever price they want to charge. On the other hand if there was another dealer I would have a little bargaining power. But at least I am fortunate to live in an area with an authorized dealer.

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Wiston,

Small world,Huh?

TTK

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Webmaster,

Thanks for the post of the letter and the web policy.I think what the statement means is that you are going to let the authorized dealers sell over the internet as long as they do not go outside of there sales area and that they have to deliver in their own trucks, not by UPS etc. Even thought you think the web can not support an internet dealer it can be a type of local mail order source for people in the dealers local sales area. That all makes sense and I do appreciate your openess.

My only other question is that from the banners on this site it appears that you can order Pro Media speakers from Klipsch.com. If this true how do you determine what speakers Klipsch.com sells?

Thanks

TKA

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TKA:

The market for computer speakers was skewed very heavily towards the 16-20 year old (computer game users) when our first ProMedias came out. Those people were very accustomed to and used very heavily the Internet to make their hardware and software purchases. That is why we used our website to make those sales and sold almost exclusively through it at first. Lately, the computer speaker market has been branching out to more older age groups with Internet music availability and DVD ROM drives becoming more prevalent on newer computers. Therefore, our ProMedia speakers are appearing in more retail outlets.

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mdeneen:

The channels "of the past" are not dead, new ones have just entered the picture as competition. WalMart found a market segment that had not been addressed correctly and became very successful with their strategy. If everyone wanted minimal/no service price only shopping, WalMart, Best buy and Costco/Sam's Club would be among the only retailers on the block. There are many people who rarely, if ever, shop from those stores. It just boils down to not being the type of "shopping experience" they are looking for. Not everyone knows exactly what they want and many don't realize a hidden need or desire for something until it is "marketed" to them. SUV's are a recent example of this.

You obviously adhere to the lowest price/least service policy in your shopping habits. There is nothing wrong with that, you are in a group that, added to the other groups broken down by shopping habits and demographics, makes up all consumers of a particular product or product category.

You mention that we should only sell Heritage on our own online store. Then you state that we lost a new sale for premium speakers because you could not audition Klipschorn vs. LaScala. How would an online store improve access to "the premium parts of our line"??? Or are you saying you want to audition them at a "brick and mortar" dealer, then buy them from some unauthorized e-tailer at a lower "tagged" price because you did not give the dealer (who stocked the product and paid the person to demo them for you) an honest chance to sell them to you? (Please don't take that personally if you have never done that, I'm just pointing out another problem which is a whole other post).

"Mom and Pop" (although significantly diminished in numbers) and "Mr. Home Theatre" are channels that will continue to exist, in some form, for many reasons including your Heritage example. There are many people who, simply, do not have the time to research everything about a product or a product category who rely on those channels for information and "marketing" of some form. There are people who have never heard of Klipsch until it was "marketed" to them in those channels. That "marketing" whether it is a demo, a brand story or personal experience with the product by the salesperson is what has been a large boost to our growth over the last several years. Growth that the e-tailers do not have the ability to promote.

We do have authorized "online" retailers as the posted letter referred to. They are respectable retailers such as Tweeter and the good guys (just 2 of many) who have invested both time and money to sell and back our products.

PhilH

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this is an excellent case of what product manufacturers face in the future. we're just starting to see the tip of the iceberg in electronic commerce. it will only snowball from here, f.e., AOL Time Warner - just watch what happens.

i think in the future klipsch will face a dilemma w/ their distribution policy/strategy

to the likes of Compaq Computer.

a possible solution - like a CompanyDirect online store selling every Klipsch product supported by company owned display/service centers. don't want to go into lengthy analysis, but the concept could be worth a thought.

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The important thing is that Klipsch has shown it IS thinking actively about the subject and monitoring customer opinion. Even if I disagree with Klipsch´s current policy (I wont bore you with a lengthy "why") I am thrilled your execs are out there listening and deliberating. Please also keep an eye on your peers, not necessarily limiting yourselves to high-end audio, who live somewhat in a balloon, but the entire audio and internet retail communities...you will eventually see your correct move in your correct measure in the cyber world...keep building great audio components, finding ways to inform the public about them and finding ways to get them easily (for both parties) into the hands of the public and...et voila! Warm regards, Tony

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Phil,

I too appreciate the expanded comments on Klipsch's "listening" habits. I'm sure that the posters here have given you a lot to think about. I do have a little more to say about authorized dealers in name only. I live about 200+ miles from Dallas and New Orleans and travel to either relatively often. For me it would be relatively easy to stop in at a 'real' dealer in either city.

I think Klipsch is hurting the name in Shreveport, LA by having a pseudo-dealer. It would be better to have no dealer here, than to have the current situation. The company could probably spend less money and get better results by doing direct local advertising (how about a single, well placed billboard?) for an 800 number( or the web address) where the potential customer can get the name of a real dealer.

------------------

Richard Hemmings

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mdeneen and Rick:

We do appreciate the opinions expressed. After all, like the letter posted states, the Internet is a "work in progress". Just as there have been some majors in the retailing field either sunk or going down for the count, there have been majors in e-tailing see the same fate. There is increased scrutiny of the Internet daily, as most now realize you cannot just toss up a website and be automatically successful. No one prospers with a stagnant attitude, you have to make the most of the present while you try to prepare for an unknown future.

We knew we would get some strong opinions thrown our way when we posted our Internet strategy. We didn't expect any less from any of you, because our shared passion for music and the reproduction of that music spills over into other areas of interest in our lives. Your expressed concerns about certain e-tailers no longer selling our product made us decide to share our feelings with you, some of which are our loyalest fans.

(P.S.-I guess when BobG gets back in town and asks "what's been happening on the Bulletin board?" I had better make sure he is sitting down...lol)

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The paucity of locations to actually audition Klipschorns is a real problem. In many product lines the flagship is as much a marketing tool for the lower lines as it is a salable poduct itself.

Before hearing Khorns I had dismissed all Klipsch as the speaker of choice for head-banging pimply-faced teenagers...something along the lines of Cerwin Vega or similar rock n roll crap..

That is, until I went into a salon in Dayton to audition some Magnepan. One record I brought was some pipe organ. The Maggies were nice hifi speakers. I saw the Khorns lurking in the corners and asked to hear them. The salesman made the switch, cued up the organ record again, and I soon said 'what is THAT sound??'. "The organ pedal, sir" was the reply. I was floored. While I had heard these pedal notes before on my speakers, they were SO down in output I was mostly hearing their higher overtones. With the horns I was IN the cathedral and those pedal notes were exerting their characteristic perceptible pressure on my body....wow.

What sold me though, was the thrilling realism of a simply-miked classical guitar recording with no bass content to speak of. But i am a classical guitarist and I KNOW what the real McCoy sounds like.

I never looked at the Klipsch name the same after that. If I couldn't afford the horns, I would've bought something lesser in the line. After the audition all other speaker brands pretty much disappeared in my mind. Actually several friends have gone the Klipsch route after hearing my Klipschorns and they bought lesser models and are quite thrilled.

Soooo, it seems imperative that Klipschorns are put out there where the public can hear them. They are a fantastic marketing tool and would probably generate some horn sales as well. Having been in retail I understand that you can experience something of a dealer revolt if you start making stocking Khorns a condition of dealership rights. I wonder if Hope's marketing budget would allow some sort of cooperative arrangement where Klipsch picks up part of the cost of stocking Khorns. Ok, I can see this is fraught with its own problems, but....

Do you see my point?

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PHIL

You mention Good Guys. I WOULD LOVE TO SEE "YOU" TRY TO BUY SOMETHING THEY DON'T HAVE IN STOCK OR JUST DON'T WANT TO SELL. I have tried to buy SEVERAL things from them as far as Klipsch AND Denon goes and they will only sell what they want to sell,WHEN THEY WANT TO SELL IT or what they stock!!! You sir will be lied to and mislead to say the very least regarding MY local Good Guys!!! YOU WILL ALSO BE ASKED TO PAY A VERY PREMIUM PRICE FOR THAT GREAT INFO/SERVICE.

I see a post from someone else who has had no trouble with Good Guys. You know what, I never did either untill I tried to buy KLIPSCH speakers from them that were not in stock... Then I tried to buy a Denon unit when the old units were not yet sold off, MORE LIES.

I CHALLENGE ANYBODY TO TRY TO BUY SOMETHING MY LOCAL KLIPSCH STORE DOES NOT HAVE IN STOCK OR HAVE YET TO CLEAR OUT THE OLD STOCK WHEN YOU ARE TRYING TO BUY THE NEW STOCK...

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I have problem with Klipsch not knowing what Distributors are selling Klipsch products to Online Stores. This seems to be a misdirection from the real truth or just plain and simple price fixing! I think what is going on is that Klipsch would rather sell their product at its' highest price and turn around and sell the product to online dealers for a lower price, but with no warranty! To say that Klipsch doesn't know anything about this is a lie! Stand behind a product no matter how it is distributed! It seems to me that the volume of sells of online retailers scares Klipsch to were they will not honor a product that is made by them! I guess they do not want to put for the resources (Capital) to be able to sell online as well to Distributors! An Excuse is a Excuse no matter how you word it! Live up to your product and it will satisfy you with its' sales!

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RWMIN, that's essentially how I was treated at my local Klipsch dealer (until I'd had enough and walked out and haven't returned since). And I had the privelige of paying MSRP for this outstanding service. I'd like to check out Klipsch's new reference line, but I will not buy another Klipsch product if I'm forced to go through dealers like this.

I'd say that over 90% of local dealers do NOT offer the customers the things Klipsch says they are trying to provide customers with by making them go to dealers. They do NOT stock much, and won't order anything unless you agree to buy it ahead of time, so don't say it gives people a chance to try it out before they buy it. Of the few that WILL stock them, even fewer let people take them home and try them out.

From my experiences here, anyone looking for answers about Klipsch products has a MUCH better chance of getting a straight answer if they come HERE to this BB rather than call up thier local dealer.

Just off the top of my head, I bet if this BB community pulled together and made a large FAQ or similar, and of course kept answering questions on this BB, and put together a database of Klipsch owners who are willing to demo thier setups for prospective buyers, we could support Klipsch customers (each other) FAR, FAR better than the average dealer.

Charlie

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The long and short of the thing is that I am not going to pay MSRP for better speakers! The discounted prices offered by internet sellers was enough to get me to make a purchace. It's not that I refuse to pay MSRP, it's that I can't afford that much. I'll just keep what I have.

As for business, the FED is lowering interest rates because the ecomony is in such a slump. Klipsch picked a fine time to limit its sales. If unauthorized sales is a problem, then by all means lets give those dealors a Klipsch license. Heck, they are the ones that apparently want to make the sale!

The internet is changing our way of being!

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Klipsch needs to be internet active to expand their market and to make purchasing the product as simple as possible for as many people as possible. How do you hear a speaker over the internet let alone service a speaker over the internet seems to make the sales process dependent on a storefront operator. That is the problem that seems to be solved with the Pro Media approach of selling to geeks over the internet.They must believe what Wired Magazine recommends for speakers and don't expect their speakers to last much longer than their present computer will last.

The sound community seems to like to hear and see their speakers before they buy them.

If the real question here is price then that has to be dealt with seperately.Text

TKA

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Sorry for the cheap shot at computer geeks.

I agree with choices for the consumer but from

Klipsch's side, can you have a free flowing distribution system and still expect the local stereo shop to support service and listening for website shops that only drop ship (lower overhead)? Possibly if the price point is even between all sources they may be able to hold a dealer network together. I think that is the problem they are struggling with.

Once again I think price is a seperate consideration but I don't think because you buy on the internet the price should be lower. That would be great but what keeps people from using the store front for shopping and then going to the internet for the best price?

TKA

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When I think of well run companies that use the internet effectively for sales Apple Computer is not the first company that comes to mind.

1D / 5D / 1M / 6M / YTD / 1Yr / 5Yr

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mdeneen,

I do think Apple is a good example, when you think of the up hill battle they have fought against one of the most preditory competitors to stalk the business world (B Gates) I would say they have done a very good job.

Being we are now talking price I have to agree that Klipsch MAY have an inflated opinion of themselves. I bought the Klipsch HT setup because I already had I set of KG2s to incorporate into it. All the high end stores ripped on them (even the one that sells them) and the people I know that really do understand the audio business think they are a second rate speaker, if it were not for this BB I would think they produce middle of the road sound and nobody likes them. So how do you determine the products worth in the marketplace? Usually by what people will pay for them. Do I think they should cut the price in half, of course I do! I am sure my customers think I should cut my price in half too. If they quit buying my services I would have to do just that. Thats Klipschs decision. I think I will by B&W at the same price as the Khorns for two reasons 1) I can hear them at the store and 2) their salesmen have convinced me they are better.

TKA

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