MI Pro

Talking to the team at Audio Technica, the Japanese microphone and headphone giant’s base in Europe, you will quickly become aware that this is not a company that looks back too much.

While it would be harsh to imply that any businesses in the trend-led MI and pro audio industries would ever lean back on its laurels, Audio Technica takes it a step further. It was not until some time after a conversation with Adrian Rooke, AT Ltd’s managing director, and Harvey Roberts, the senior UK marketing manager, that I discovered the British operation is celebrating its 30th anniversary this year. Not a word from the men themselves. Not a peep. You have to admire that kind of focus on the important issues.

Then again, it is plain to see that Audio Technica circa 2008 is a long way from the company that was established by the American Audio Technica Inc in 1978 with the flamboyant and popular Paul Maher at the helm.

“Paul was very much from a sales background,” explains Rooke. “His remit was the UK, not Europe as it is today.” When Maher stood down from the position of MD in September 2005 and Rooke took over, an awful lot changed.

For a start, Rooke’s background is finance (he was AT Ltd’s FD from April 2003). Second, the company took on distribution for a number of territories in Europe and beyond. Third, the whole operation began its morph into a far more marketing focused company, where terms such as ‘investing in people’ were introduced and an altogether longer-term perspective was adopted.

The shift was a lot more organic than it sounds. Early in 2004 the role of European marketing and distribution director was created and a certain garrulous Frenchman, Richard Garrido, was hired to fill the role with the remit to turn the European market into something as successful as the UK market had become.

“Paul Maher was instrumental in making the handover to me extremely smooth,” says Rooke. “He already had great staff in place and together with him, it was a very smooth transition.” Maher today lives in France, where Rooke will often visit – the two remain firm friends.

That ‘investment in people’ hit its first target with the appointment of Harvey Roberts in March 2006. Roberts came with an impeccable marketing pedigree, having worked with the software developer, Symbian, and that giant of all things photographic, Fuji.

Looking at the MI world with uncluttered eyes had an almost immediate effect, and Roberts very quickly introduced a new pricing scheme and a complete re-branding of Audio Technica’s corporate and product image.

“Audio Technica was very quick to understand the problem and implement the changes needed,” says Roberts.

“The artificial pricing on the High Street was immediately identified as a problem – this is what makes the so-called recommended retail prices look so high. We implemented new street pricing, new trade pricing, the whole thing was simplified so the dealer could see exactly what was happening.”

Importantly – and with the aid of the new European structure – this was a policy that was introduced across the continent. “If a dealer loses an Audio Technica sale, it won’t be because of price,” Roberts promises. “You can do a price search on the internet across Europe and you will see Audio Technica’s pricing is consistent.”

Almost immediately the firm found a virtuous circle of customer and dealer confidence created, whereby the trust dealers were finding in the stability of prices combined with the undoubted quality of the product as far as end-users are concerned.

“In the three years since I’ve been MD we have doubled turnover,” points out Rooke. “The year from April 2007 to March 2008 showed a rise of 20 per cent and this is all tied into the long-term approach we are now taking.

“On top of that, we have recently invested in the supply chain and logistics, introduced next day delivery and bar coded everything. It’s not the exciting side of business, but it is so important.”

All of this has taken place over a three year period that has seen the market decidedly flat, yet AT has managed to buck the trend. “It is tough in MI at the moment,” agrees Rooke, “but I think you’ll find Audio Technica continuing to grow. Modestly in the UK, but a lot more in Europe. Of course, we aren’t just selling to the MI business and other areas, such as contracting and broadcast are not suffering to the same extent as retail.”

“This brings us back to the issue of pricing,” interjects Roberts. “We understand that dealers are not just competing with each other anymore, but with the rest of the world – especially Europe – through the internet. After a tough 12 months, which was compounded by retailers not getting the Christmas they were hoping for, dealers are bound to turn to brands that will give them the least trouble.”

Which all sounds a long way from the ‘eastern calm and serenity’ which AT hopes to encapsulate in its brand and corporate image. “Not at all,” Roberts objects.

“When you are looking for an image, it has to encapsulate everything the brand represents, it is the service, the product, everything – going back to 1990s-speak, that’s product, price, perception, placement. If you get all of this right, calm and serenity is the result. I see the marketing department as the custodian of the brand, but it has to run through every department of the company. Many people have said it before, but it’s true that if you have the best physical product in the world, but you are failing in service or pricing, then the whole thing becomes meaningless.”

“It’s worth noting that we have actually put prices up on the 40 series,” points out Rooke. “Margins had eroded to something between ten and 15 per cent, so we had to make a decision and we hiked prices by up to 30 per cent on some models, but this gave dealers back their margins on these products.”

“We softened that with a new lifetime warranty,” adds Roberts, “but we still increased prices, reversed the shrinking margins, but we have increased sales on the 40 series. Again, it’s more money for the dealers and creates trust – and this is all about our world of serenity.”

Audio Technica’s next step is to reach out to its customers and get face-to-face. Most MI and pro audio companies do this via trade shows, although the in-house trade meets and roadshows would seem to be attracting a lot more attention from larger suppliers these days.

Audio Technica now counts among these numbers as it has recently announced its own ‘Road to Success’ tour – a roadshow that will cover seven regions between May 22nd and June 10th (see box), all from the back of a branded juggernaut. As a result of this, AT will not be attending PLASA this year or (obvious once you look at the dates) the new LIMS at ExCel in London.

“The decision was not ‘how can we avoid trade shows’, but how can we do something different,” says Roberts, who is fully aware that of all the opportunities open to him, the roadshow is probably the most difficult in terms of time, effort and money. “Yes, this is the most challenging option and involves the most work, but it will be a sad day when I decide to take the easy option for the sake of it.

“It is reactive to assume that you will set up and your customers will come to you. This way we are getting out to customers and putting ourselves in easy reach of them. It also means that we get more time with our customers, rather than a snatched ten minutes in a noisy hall. The drawback is that there won’t be the passing footfall on the stand that you get at shows, but this again is weighed against the fact that the roadshow is running for two weeks rather than just two or three days, so there are a lot more opportunities for our customers to get to us.

“I fully support what the MIA is doing here, which is effectively putting London back on the map in terms of MI. Our decision not to go to LIMS is based on the timing of the roadshow and on finances. We attend NAMM and Frankfurt and have a strong presence at those shows, where we can fit into our sectors that are not solely MI focused. These days, no-one can go to every show – it’s impossible. But I do hope LIMS is a success and we will be visiting.

“On the wider scale of things, the UK show is not international and the calendar is pretty full already. Frankfurt and NAMM are fully international shows, and this is where the benefit is for us – although we did notice a big increase in UK dealers at Pro Light + Sound this year – but the issue with a UK show is the same as with PLASA. There is a degree of apathy in the UK market, so if the mountain won’t go to Mohammed… Have a roadshow.”

The Road to Success tour is open to anyone who uses microphones as part of their daily life or business, and Roberts is promising a big draw for anyone involved with wireless systems. “There will be small seminars and talks on the Digital Dividend Review and intensive wireless workshops every afternoon, but visitors shouldn’t be put off by any single aspect of the show. It will cross all boundaries for sound engineers, broadcasters and, of course, MI dealers. There will be something for everyone.”

The locations have been chosen as being central to concentrations of customers, although the quick among you will notice that London is not on the list, which surely must be a hub of some significance.

“Yes, that is true,” admits Roberts, “but Audio Technica is about serenity and calm, so the locations have been chosen to reflect that, as well. London, I think most people would agree, is none too serene, and for our customers in London, we have chosen to locate ourselves just south of London in Surrey and just north in Hertfordshire."

Roberts’ enthusiasm is a tangible thing, more usually the possession of one who is involved directly in music or production. Instead what he has is a passion for his company that equals that of any musician or engineer. When his company is involved in the crossover between MI and pro audio, the energies involved boil down to the same thing. Creating more interest in making music, whether live or in the studio. It also means that his managing director gets to lean back and relax as his marketing man takes up the standard during the interview.

Rooke does have one or two things to say, however, on where the future lies for Audio Technica.: “We will never be complacent, there will be a lot of things happening. As for talking, my job is to see everything runs smoothly, it isn’t necessary for me to do much talking,” he smiles. “And I have Richard Garrido and Harvey, who love to talk, so I leave them to it.”

And so he does. Roberts resumes: “I’m not the sort of character, and Audio Technica is not the sort of company to say ‘we tried that five years ago and it didn’t work, so we won’t try it again’. It’s about being innovative, improving our service. If a customer finds doing business with you easy, then he will come back to do more business. The customer really is king.”

Audio Technica has a lot of laurels it could lean back on, not least the efforts and growth of the past three years in the UK and Europe. That can easily inspire a kind of serenity, too, but AT and its European team would far rather find that serenity moving forward.