For about 16 years, AudioQuest has been growing like crazy in the Dutch market. The brand knows how to find consumers. How does the manufacturer of cables and power products actually go about this? After all, even if a manufacturer has good products, it is not self-evident that those products also end up in the home or listening room. We talked about this with Richard Brans, the European General Manager. Of course, manufacturers do a lot to reach consumers, from setting up well-functioning distribution channels to creating catchy advertising, and consumers can notice this in many ways. So we also discuss with Mr. Brans what consumers notice and benefit from AudioQuest’s market approach.
Recently there have been concerns about the future of the HiFi industry, including on Alpha-Audio. Price levels are high, especially in the high-end, and the size of the HiFi market is declining. To what extent does this have to do with the way the industry operates? Are acquisitions of reputable manufacturers by large electronics groups, and sometimes by financial institutions, beneficial or detrimental to the future of HiFi? Is advertising increasingly taking us away from seeing the true quality of products or is advertising actually informative?
Is the role of the press in HiFi sufficiently independent for the future?
Are consumers, with ever-increasing demands, causing a shrinking industry? The answers to such questions are important for the future.
It is quite a challenge for manufacturers to survive in this competitive industry. Marketing is crucial for them. But, what do individual consumers gain? A provider’s approach to the market affects consumers, including in terms of perception, but it can also, for example, lead to appropriate product offerings for various target groups. What do the advantages and disadvantages of marketing for consumers look like in concrete cases?
AudioQuest
As a manufacturer of cables and power handling products, among other things, AudioQuest is important to the future of the Hi-Fi industry, in part because of innovation, a role model and advanced technology. Consumers are certainly aware of that. That is less true of AudioQuest’s market approach. While effective, it is not as well known to consumers.
Therefore, we want to know how AudioQuests approaches the HiFi market, for example in terms of segmentation, sales channels and advertising, and how this influences (potential) consumers of their products. This will provide a better understanding of AudioQuests contribution to the strength and future viability of the HiFi industry as a whole and its benefits to individual consumers.
AudioQuest as part of The Quest Group
AudioQuest is a brand operated by The Quest Group B.V. which is based in the Netherlands. Its owner is founder William E. Low who is based in California with his company. The Quest Group carries a few other brands, including Golden Ear and Wirelogic, but AudioQuest is the largest component.
Strategy formation, product development, manufacturing and the shaping of global marketing policy take place in the US. Assembly, logistics, inventory management, sales, and administrative management for the European market take place under the wings of The Quest Group in Roosendaal. And Mr. Brans is thus its Managing Director.
The dog and the tail
He explains, “AudioQuest is the tail, not the dog.” The AudioQuest buyer buys the product through the retailer. There, for most customers, choosing a system does not begin with the cables or power handling products one wants. One first looks at speakers and amplifiers and other components of the system. Only when a picture emerges about those does the retailer discuss with the customer which cables are appropriate. In a consumer’s decision-making process, the choice of cables is usually subsequent, like the tail follows the dog. Thereby, the retailer’s expert advice is rather important.
Retailer network
AudioQuest thus places great importance on building and maintaining a retail network. They do this in several ways. To begin with, AudioQuest ensures the smooth availability of their products on the market. That’s why the products are assembled and stocked in Europe, allowing delivery times to retailers to remain low.
Moreover, the brand has a very wide range of products that are accessible to retailers. Crucially, a suitable cable can be found for almost every application, for example home cinema, HiFi, high-end, custom install, and for every quality class.
As Mr. Brans says “you’re not going to suggest €3500 cabling for a €3500 all-in-one. It has to be appropriate.” In doing so, he prefers that several cables from various brands be considered when making a purchase rather than purchasing an AudioQuest cable without thinking. AudioQuest also wants service to retailers to be prompt and good. “We always answer the phone, in the right time zone,” he says. “We never whine, but always solve a problem.” These are qualifications he mentions with emphasis.
Furthermore, AudioQuest encourages retailers to display demo products from the brand so that its products are brought directly to the attention of customers.
Sophisticated assortment
When you look at AudioQuest’s finely woven cable assortment, you immediately see how extensive it is. There are many products in it. Apart from the lower end of the cable market, this range runs from the standard HDMI cable to the ultra high-end speaker cable. Such a large assortment requires a lot of R&D, each new product has to be developed. A time-consuming and costly affair. If you want to provide customers with their orders quickly, you must then have the products in stock.
With this range, that is quite costly, not only in terms of numbers, but partly in terms of value. Understandably, the inventory management at AudioQuest is in good order, which in itself is also costly.
Key features of the market approach
So, one brings a high-quality product to the market, carries a wide assortment, provides high-quality service and nurtures the retailer network. These are key features of AudioQuest’s market approach. Advertising, quantitative market analysis and analyzing social media with algorithms have somewhat less attention. The whole package is apparently successful, although there is always room for improvement, Mr. Brans said.
Uses and burdens for consumers
Of course, AudioQuest offers excellent products that rival those of competitors. Consumers know a thing or two about that, thanks in part to review work by Alpha-Audio and others. Buyers each weigh product quality against production costs. However, it doesn’t stop there.
Marketing and selling products can take place in a variety of ways. Consumers are affected and have both the benefits and the burdens. In the case of AudioQuest, there is the choice of a finely woven assortment that is usually in stock and thus has a short delivery time. The retailer can often offer the opportunity to actually listen to the cables and compare them with competing products and can call on AudioQuest’s service. These are pleasures for consumers.
The burdens are also there. Precisely because of the large assortment, it is quite an effort for consumers to have enough knowledge to make a responsible choice from that assortment. That does not apply to consumers who inform themselves thoroughly in advance, but according to Mr. Brans that is a small group. The rest usually depend on a retailer that is part of AudioQuest’s network for reliable knowledge. Moreover, as mentioned, costs are incurred for that wide assortment. Costs that are ultimately borne by the customer.
Of course, the market approach as so clearly outlined by Richard Brans brings advantages and disadvantages for the consumer. That is true of any market approach. In the case of AudioQuest, however, it is a market approach that is visible to all. The key features can be seen and experienced. So, you know what you’re paying for. It is very important that manufacturers approach consumers in a transparent way, even in the future. AudioQuest’s choices certainly help us do that.
Epilogue
So that’s how they do it at AudioQuest. They could have done something else, too. For example, a provider could also choose a more PR and advertising driven market approach, buy up a retail chain or merge with a competitor that is strong in distribution. There are all sorts of ways for providers in the HiFi industry to approach the market with associated likes and dislikes for consumers.
With a HiFi system, we consumers don’t just “buy” the physical system that eventually sits in the room. Inevitably, we also buy with it a search process, a selection process, contact with a salesperson, delivery conditions, service, an experience and the resulting cost. Thanks to the open and pleasant conversation with Richard Brans, we gained much more insight into AudioQuest’s market approach. It would be informative to take a look at how other suppliers in the HiFi industry approach things. Alpha-Audio is certainly going to try that.
