Sonance is a well-established company providing high quality customized speakers for in-home entertainment. After launching their Sonance 1 model, they progressed into multi-room amplification and eventually designed the first built-in system that would support the iPod. Operating as a lean organization with only 60 employees, they relied heavily on a network of dealer and installer word-of-mouth advertising. By 1999 Sonance had reached $46 million in sales. Similar to other companies affected by innovations in technology, Sonance was forced to change strategic direction in the early 2000’s. The newly acquired leadership needed to redefine marketing efforts in response to increasing low cost competitors. Major retailers started offering off-the-shelf products that were less expensive and easier to install. This combined with industry consolidation posed significant challenges to sustained operations, let alone continued growth.
When CEO Sugarman hired a new Chief Sales Officer in 2005, the company was facing many challenges prior to attending the CEDIA EXPO. Internally the strategy moving forward was unclear. The chance to address 25,000 dealers demanded the new leadership had a clear picture of their mission moving forward. With a very narrow scope of product offerings and the slowing sales of their high-end speakers, the decision to expand into additional products, or stay focused on their main revenue source would determine the future of the company. Offering their product in the large retailer market and pulling away from the independent installers had already damaged their brand equity. Furthermore, engaging with the production home builders, while generating the nece...
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...mproving customer service and providing extensive dealer support, the trust among buyers will increase. Zappos.com for example, has grown to become of the largest and most trusted e-commerce sites in the world. They accomplished this with customer referral programs and effective use of social and digital marketing tools. (Patton, 2015). Designing an effective reciprocal referral marketing system using an automated processes will enable dealers to grow their business and in-turn benefit Sonance. (Hogan, 2013).
Implementing this plan would require patience. Initially, the leadership should expect increased costs in acquiring new products and improving dealer relations. Offering more commissions and referral rewards will clearly increase the cost of goods sold. In the long-run however, Sonance can maintain is place in the custom high-end home entertainment niche.
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