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Klipsch Makes Major Distribution Changes


Guest Joshua Ryan Hall

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BobG,

I hope you'll be able to give me some kind of response to the following questions:

Has there ever been any discussion about bringing back the 'extended Heritage' line in the form of the Chorus III and Forte III, perhaps throw in an Academy II? Is there any chance of a scenario like this actually happening?

It would seem that these speakers would not present the space problems that dealers are concerned with and the lower prices of the two (compared to the Klipschorn, Belle, LaScala) would certainly help move more product.

Now, I understand that these speakers would probably be considered competition for the Reference line and my gut tells me this is one of the big issues. However, and I mean this in the nicest way, the Reference line doesn't hold a candle to the 'extended Heritage' line. I think that's a common opinion around here, at least with long time owners. It's not that the Reference line is bad. It's kind of like comparing a Lexus to a Rolls Royce. Both are very, very nice but you know the RR is the one to have.

I hope that Klipsch LLP considers bringing back this line, if only for a couple of years. You would sell a lot of speakers. I don't have a lot of disposable income these days but I can tell you this, if a Chorus III model were available tomorrow I would be there with my credit card out. I'm sorry to say that is not the case with the Reference line. I have no intention of ever owning Reference line. Unless something like the 'extended Heritage' line reappears then I'm afraid the only place I'll be buying Klipsch is Ebay. I think there are a lot of people here that feel the same way.

Thanks for reading and if you have any thoughts or information you can share, please do.

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I'm sorry to say that is not the case with the Reference line. I have no intention of ever owning Reference line. Unless something like the 'extended Heritage' line reappears then I'm afraid the only place I'll be buying Klipsch is Ebay.

**************END QUOTE

I would guess that you like synergy even less, oh well, too bad, you just don't represent the "target demographic" that we are trying to capture..

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You know this situation is not unique to Klipsch, or speaker companies for that matter. Put yourselves in the shoes of Klipsch's management. As stated back on the first page of this forum, over the last 3 years, there has been a general market decline in market segment for the high end component speakers that so many of the people on this forum so emotionally side themselves with. Although Klipsch's sales have increased about 8 times in the last 10 years, their name was built on the high end products that have built their reputation. But no company can just sit back and watch a decline in sales of their core product group and take no steps to adapt to the current marketplace to maintain profitability. In order for Klipsch to keep producing the highest quality line of speakers, they need to maintain profitability as a company.

What other choice is there other than product diversification? The introduction of the Promedia series speakers has elevated the Klipsch name to become recognized by a much larger segment of mainstream consumers. From a business perspective, how can this be a bad thing? About the main complaint that I'm seeing on this forum is that some of you current Klipsch owners will now somehow feel as if their speakers are not as good anymore just because a portion of their brand of speaker is sold in a more mass marketed chain store. Do your Ref's sound any different today than they did 3 months ago?

I think what alot of you are forgetting is that there is a difference between most people buying speakers at BB and those that make the trip to a specialty shop. In most cases, if you are in that specialty shop, aren't you shopping above the Synergy line anyways? How does this help Klipsch if they are just puting Synergy speakers in a specialty store to only make other speakers look better? Especially if the Synergy line is a viable product for a particular market segment. Klipsch needs to get each type of its products into the right people's hands.

There are a couple of good things that will most likely become of the BB sales efforts. Remember that Klipsch Synergy series will probably be the best sounding speaker to sit on a BB showroom floor. And although the customer may not even begin to see the light at the end of the tunnel, the reputation of being the best will start to reside in the minds of the more average stereo users. And as most of you can probably relate with, your high fidelity passion didn't just start with the best. You start with something, then after a while, you want something more. If they don't have more at BB, is that gonna stop you from finding it? I don't think so.

Don't forget that Klipsch is still continuing to center their business around what has made them what they are. They are continuing to produce and sell their top-of-the-line products.

And give BB a little credit. If you maintain the opinion that they don't carry high end products, why not pat them on the back for going after a line like Klipsch. Just as this can help Klipsch, it can begin to draw another level of customer to BB. If that level of customer starts shopping at BB, then they will be forced to provide the level of sales person capable of demonstrating, selling, and supporting that level of product.

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

On 3/14/2003 4:43:24 AM Codeack wrote:

Don't forget that Klipsch is still continuing to center their business around what has made them what they are. They are continuing to produce and sell their top-of-the-line products.

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

Codeack~

I think many Heritage/Reference owners aren't so sure of that statement.

As your reply to this thread is your first posting on the forum let me first say hello and nice to have you on board. Now I'm going to pick your arguments apart! 9.gif

Actually in all seriousness I agree with the majority of your comments regarding Klipsch's needs/rights as a company to diversify their product offerings and update the avenues available to consumers to better find those offerings. I think most everyone on this board would say more money/exposure for Klipsch is good for all of us who wish to enjoy their speakers now and in the future.

Without knowing your knowledge/ownership level with respect to Klipsch let me offer a few more substantial reasons for people's concerns regarding this recent change besides the one you noted that being, "Our Heritage/Ref speakers somehow immediately suck now that the Synergy line is at Best Buy"

1. For many of us there is absolutely no ability to either hear or obtain the Heritage line of speakers.

2. For many of us the removal of the Klipsch Reference line from all stores affiliated with Tweeter, Inc. makes it more difficult to continue to purchase Reference line products within our area.

3. Of the 14 new products released by Klipsch this year as "Reference" models only one of those can truly (at least in my mind) be called Reference. That being the new top bookshelf model. Sorry I forgot the model once I realized Tweeter wouldn't have them anyway.

As I said before, I agree with Klipsch right to diversify as a business and really don't care about the Synergy line going to Best Buy (I never looked at them anyway), but from what I've seen and experienced myself, I have seen very little to indicate that Klipsch is in fact interested in growing or even maintaining it's customers who enjoy and/or want to purchase Klipsch's premium brands.

When I see news releases from Klipsch with headlines such as:

"Heritage Distribution Update......You can find them now and we've already made them"

"Klipsch debuts 14 new high end Reference models and extended Heritage models"

Then as a high-end consumer I'll feel better about the current changes.

Again welcome to the forum.

~shoe

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main complaint that I'm seeing on this forum is that some of you current Klipsch owners will now somehow feel as if their speakers are not as good anymore just because a portion of their brand of speaker is sold in a more mass marketed chain store. Do your Ref's sound any different today than they did 3 months ago?

.................end quote

No, the thing that scares most of us is the thoughts of what the new line-up in ,say, about 3 years will be like.....I WILL grant the notion that it would be possible that Klipsch could take all the profits from the new musac/bb venture and roll them into a large increased plant with new highly trained personnel so that they could focus on what gave them such a good name; QUALITY OF SOUND.However, call me a cynic ,but I haven't seen many of the companies who have gone this route actually maintain much less improve their product quality...I am passionate about Klipsch and am sad because now the average customer won't be able to do a direct side-by-side with synergy and ref....Why does Klipsch need to take synergy out of dealers? I have seen many of these dealers compete on price with bb and step customers up to better gear because they have both to play...I'm sure that all the specialty retailers didn't want to loose that line...so , was this a decision by Klipsch to cr@* on the retailers that have made them what they are?...did Klipsch think that they couldn't supply enough to cover both bb and all the rest (if so they lack a dedication to invest in their own infrastructure)...was it bb who insisted on an EXCLUSIVE line? If it is the latter then the idea that bb is already dictating terms does not bode well for the company...we in the industry have seen once well regarded brands become bb "house brands" with unpleasant results.....so as I see it either we will begin to see MASSIVE hiring and plant expansion in Hope or we will begin to see oem components used more and more and the "made in mexico" sticker showing up on more and more of their products...I have already heard dealers and customers complaining about how long it takes to get Heritage products shipped, and am curious as to how much attention the ref dealers will be getting in the future....call me pessimistic, but does anyone want to wager on how this is gonna turn out?.....fine for the principals/investors in klipsch and bb, but maybe not so well for the audio enthusiast....

oh, Gadfly Hurtz, were you still with us!

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First on the "declining quality" issue, the reputations of both Klipsch and Denon have IMPROVED when it comes to product quality and the advanced technologies included in the products, as with another partner of ours: Samsung. There may be some isolated incidents of examples to the contrary, but there is NO manufacturer who can produce every single individual product perfectly each time, making it last "forever". Would you buy any new product, no matter what it is and no matter who makes it, without some type of warranty? I doubt it. Our ProMedia 5.1's have generated concerns which we are addressing (see new information about fixes and resoultions here on the bulletin bopard). Myself, and ANYONE who is part of Klipsch can assure you that Klipsch is NOT approaching the market in the way that is being described here.

Second, with regard to the "grey market", Klipsch DOES NOT ignore it and turn a "blind eye" as has been stated. I have a friend at Denon who continually works to reduce their preence on it and know, for a fact, that they are also not turning a "blind eye". Klipsch has been attacking this problem for years, but when there is fanatical demand for a brand in a tough market, less reputable retailers will succumb to the temptation to make a quick buck and violate their dealer agreements by participating in transshipping or out of market Internet sales. Klipsch has terminated more than a dozen longtime dealers for such activities. Further, we have now adopted a ZERO TOLERANCE policy and we will terminate our relationship with ANYONE that does this on the first offense. Unauthorized Internet resellers have replaced the unscrupulous "guy on the street corner" of old, with the unmarked van who says anything to make a sale, then when there is a problem, denies responsibility or denies the lies he told to make the sale in the first place...if he can be found again. And as long as customers (who know better), who DON'T CARE who they support to save a few bucks buy from these faceless people in hiding, these people whose big business investment is basically a phone, a garage, a website and a "good pitch" will continue to lurk on the Internet. Just how will ANYONE be able to audition ANYTHING if these type of operations prevail??? It is our responsibility as a manufacturer to better inforn those who do not know better who wind up being taken in by their deception and poor customer service.

Our cards are on the table and our intentions are clear. There are no hidden agendas and no "bean counters" or evil Enronesque profit mongers running the show at Klipsch (although there are some "armchair quarterbacks" who want to believe there are). Our management is as cautious are they are innovative when it comes to protecting our brand reputation, and the negative speculation out there will give way to awe when the dust clears.

All of us at Klipsch are people who sincerely care about what we do!! We work hard and do our best to deliver superior sounding, premium quality audio products globally. The 20% growth every year for three years supports the claim that our efforts are paying off.

We have issued press releases that show the massive re-investment that has been made in the company. All you have to do is click "Newscenter" at the top of any page here and look at release dates of 11/1/2001 and 10/24/2001 for proof of that. The new Reference products not being real Reference?? None of our dealers or customers who have actually listened to them have told us that...quite the opposite as a matter of fact. And as far as Heritage availability goes, we have also stated here the challenges of Heritage being on display. Who knows, with the new distribution plans, maybe there is a better opportunity for Heritage on display?

Please don't take any of this as personal attacks, it is just that myyself and anyone I work with here at Klipsch is very passionate about,and dedicated to, what we do. We know the reasons for the actions our company has taken, those reasons have been communicated to all, and we have sincerely become distressed with the continued "reading between the lines" that is going on when we KNOW there is nothing else to "read" into the decision that has been made!

PhilH

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Excellent points, everyone.

Phil, I think you're being a bit hard on the ol' gray market ;) "Unauthorized Internet resellers have replaced the unscrupulous "guy on the street corner" of old, with the unmarked van who says anything to make a sale, then when there is a problem, denies responsibility or denies the lies he told to make the sale in the first place...if he can be found again. "

and

"It is our responsibility as a manufacturer to better inforn those who do not know better who wind up being taken in by their deception and poor customer service. "

The very few instances I've used gray-market sellers have been simply terrific -- no deception, complete professionalism, excellent service, and the right channel for ME. I have never auditioned a piece of Klipsch gear at a dealer that I wound up buying on the gray-market. I rely on product opinions on this forum and the reputation of Klipsch gear in general to guide me. For me, that channel fills a need, 'cause I wouldn't have bought some of the stuff I've bought at the prices dealer charge.

I think of the old Adam Smith "guiding hand" theory of commerce. Any time artificial controls are introduced into a market, it sends false information throughout the market. IMO, dealer agreements are artificial controls, in that they establish prices that are to be charged, where products can be sold (akin to import/export restrictions & tariffs), and more. This generates false information, to the extent that the actual number of potential buyers is possibly wrong because the artificially established prices deter many customers and the geography of the permitted sales area further excludes potential customers.

Unrestricted competition is, in the long run, the best for all of us. It forces development of efficient & varied processes for manufacturing and distribution, adequate for the various supports needs of different market segments.

I agree you have to protect your dealer base, and inform the public about the risks of buying from gray-market sellers. However, I'd disagree with the blanket condemnation of them as nothing more than street-corner junkies hawing watches from the inside of their coats.

JMO. I appreciate your wisdom and perspective.

Doug

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am sad because now the average customer won't be able to do a direct side-by-side with synergy and ref....Why does Klipsch need to take synergy out of dealers? I have seen many of these dealers compete on price with bb and step customers up to better gear because they have both to play...I'm sure that all the specialty retailers didn't want to loose that line...so , was this a decision by Klipsch to cr@* on the retailers that have made them what they are?...did Klipsch think that they couldn't supply enough to cover both bb and all the rest (if so they lack a dedication to invest in their own infrastructure)...was it bb who insisted on an EXCLUSIVE line? If it is the latter then the idea that bb is already dictating terms does not bode well for the company...

/////////////////////////////////

Phil, a very well made argument...could you pleasew respond to this quote regarding pulling synergy out of everywhere and everything from Magnolia (part of bb?) and tweeter...

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I rely on product opinions on this forum and the reputation of Klipsch gear in general to guide me............................

I find the above quote disturbing....

e-marketing is the art of telling you that the guy with the watches under the coat is great and that there is nothing wrong with his watches and that he stands behind them....

"bottom-feeders" feed on the need to make themselves and others believe that it's not about cost and that they KNOW they made a good decision And they don't have to let their own ears decide...they can trust the faceless multitudes on-line....

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Doug:

I appreciate the fact that you have had good experiences in your dealings with unauthorized resellers. I also believe in fair competition. The fact is that lies begin once the statement is made "factory sealed box" (boxes are opened to remove serial numbers in most cases). They continue with the terms "factory authorized", "full manufacturers warranty" (yea, but repairs are by us if you can find us when it breaks) and so on. Open boxes can now easily be filled with repaired, damaged, etc. goods. Some of those "factory sealed boxes" have come from dishonest employees stealing them out of the back door of an authorized dealer. Employees and dealers both are sometimes duped by these hucksters to get them merchandise. Most of their selling is based on untruths designed to deceive the public, and when the public, in most cases, calls their bluff once they found they have been deceived, it becomes a shouting match to try to get any customer satisfaction.

I'm sorry, but this is not fair competition to a company that has made an honest investment in the community they are selling to. I am not being hard on "grey market" resellers, just honest about them...and this is based on over two years of both personal and customer-related experience with a vast majority of these resellers. It is much easier to hide behind a phone hundred of miles away without a hint of a physical location or the hint of affilitiion with a company that is actually real and accessable, promoting lies and half-truths, instead of showing the community you're selling to, that you are physically there, truthfully informative, willing to help them and willing to handle any problems or concerns that show up.... because you have made an honest and large investment in what you are doing!. Of course in a sea of drownings there is bound to be a few who survive...you have "survived" so far Doug in your limited dealings with them. I also appreciate the fact that you do not pump time and information out of a commissioned salesperson at a physical store just to leave and buy the products from the reseller. But Doug, my friend, unfortunately you are in the minority on that point.

Several people on this bulletin board are upset that we have chosen Best Buy to sell our Synergy line. We are upset that the unauthorized resellers (mis)represent our brand when we never chose them to begin with. With them there is no control on how your brand is represented. My mind is not the least bit changed about this form of "competition" and we will continue to do everything possible to eliminate any source of our products from getting into the hands of these unscrupulous people.

PhilH

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Phil H

Just how does dropping Tweeter impact the grey market problem? Your lack of loyalty to a long time Klipsch dealer and your smoke and mirror answers about it causes some of us to worry about your loyalty to long time Klipsch customers. Without Tweeter just where will I find Klipsch on display close to Pasadena Texas. Oh I know the grey markst.

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Doug , quality is subject and exists as a matter of comparison to other similar products. Bottom line is that I think what mnfgrs of quality equip know is that without a place to do A/B demos, it is packaging, marketing, hype, buzz, "unsolicited "(yeah, right) testomonials, advertising, reviews, consumer reports (they love bose),etc. that will sell gear...I trust my own ears, but only as long as my audio memory allows (short time)...I need comarative demos or I too might convince myself that the less expensive one is really just as good (which it might be,but I'd like to hear for myself).....

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>>..I find the above quote disturbing....

e-marketing is the art of telling you that the guy with the watches under the coat is great and that there is nothing wrong with his watches and that he stands behind them....

"bottom-feeders" feed on the need to make themselves and others believe that it's not about cost and that they KNOW they made a good decision And they don't have to let their own ears decide...they can trust the faceless multitudes on-line....<<

There are a number of people here that are extremely knowledgeable and I trust them completely, despite not knowing them off-line. Doug, StevenP, HornEd, jhawk (who I do know off-line), Gil, fini, Boa and many others. These people have given me solid advice that I've used to turn my mediocre speaker setup into one that I am very proud of. I used their opinions in addition to using my ears.

For the most part you can tell when a person actually knows what they're talking about, especially when you ask the right questions. It's perfectly acceptable to trust others opinions on Klipsch and absolutely acceptable to trust the reputation of Klipsch (when considering the older speakers).

I do appreciate you coming onto the board and implying the people here "bottom-feeders". Trust me, the implication is there, whether you admit it or not.

This board has definitely taken a turn for the worse recently...

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I do appreciate you coming onto the board and implying the people here "bottom-feeders". Trust me, the implication is there, whether you admit it or not..............endquote.....

I'm not sayingwho here may or may not be "bottom-feeders", they know who they are........

I'm sure that the VAST majority of posters here bought from an authorized retailer, and were intelegent enough to let their own ears decide...

I would also doubt that anyone here would avail themselves of the demoing opportunity that a b&m provides, knowing they are going to buy from someone who doesn't offer this opportunity....yeah ,o.k.....

If you take this to it's natural conclusion there will be fewer and fewer places to A/B gear and my friends e-marketing company that posts on many forum under hundreds of differant names will become your new on-line friends...

the 16 year old cheerleader you are in the chat rooms with rarely is what she (or he) claims to be ,neither is the so-called faceless experts....but my friend the e-marker is an expert and the stock copy (modified for each post) really does offer great insite and earns him money from mnfgrs and e-tailers ........

caviat emptor....

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