Onkyo Brand Faces Shakeup: Will Amber Hold Onto It?

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The Onkyo brand is set to get some TLC, but the question is whether local distributor Amber Technology will hold onto the brand in Australia.

Steeped in old-fashioned marketing, Amber Technology has struggled to grow its lifestyle business, which is primarily made up of the Onkyo brand. With sales slumping 11.7 percent to $14.5 million last year, sales are tipped to have fallen further this year as consumers move to wireless audio devices and soundbars, as opposed to receivers, which make up the bulk of Onkyo’s product range in Australia.



Gibson Brands chairman and CEO Henry Juszkiewicz, who earlier this year took over Onkyo, acquiring 51% of the business with the TEAC brand, has admitted that Onkyo is suffering and that in the past the Japanese brand has suffered from “poor” marketing.



Privately-held Gibson purchased 51 percent of Onkyo USA from Japan-based Onkyo in early 2012. In May, Gibson acquired 54.4 percent of Teac, which has a 20-year brand and distribution agreement with TTA Holdings.



Juszkiewicz claims that both Onkyo and Teac have not engaged in “proper” marketing in the past.



He says it takes time to develop the resources to make marketing happen. In fact: “Teac has zero marketing people around the world in all categories, though they have product planners.”.



Now speculation is mounting that the two brands could merge under one distributor in the Asia Pacific region, with share-listed TTA Holdings, which currently distributes the TEAC brand in Australia. TTA is tipped to be a favourite to get both brands, due to their parent company being able to distribute both brands across Asia.



According to Gibson management, the company is set to spend more on marketing and product development “in the short and long term”.



In an interview with Twice magazine in the USA, Juszkiewicz declined to say whether Onkyo will enter new product categories next year, but if and when it does, it will do so with the intent of “having a good shot at dominating” the category and becoming a “category champion”. 



“We are long-term players,” he said. Gibson isn’t focused on making its financial statement look good in the short term at the expense of undermining its business long-term, he adds.



Once the new Onkyo products are ready to come to market, “we will load up our marketing weapons,” Juszkiewicz says.He also sees the potential to integrate future consumer-oriented marketing of Teac’s high-end Esoteric audio brand into the Onkyo marketing function.



Gibson recently hired a new chief technology officer, who will integrate the three companies’ engineering and technical resources in Japan.



“Neither Onkyo nor Teac are broken,” Juszkiewicz told Twice magazine during an interview in New York City’s Hit Factory music studios. “While they are not the most profitable companies in the world, they are profitable” and enjoy “excellent management and passionate employees,” he said. As a result, Gibson does not need to “break and fix” the companies, but instead make “evolutionary changes”.



Both companies, he says, are strong innovators in engineering “but don’t seem to want to bring them [their innovations] to market. They can do great stuff in the lab”.



The next generation of Onkyo products will not deliver “incremental” improvements but will be “different, more contemporary,” he promises.

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