A Coveted Invitation to Buy TVs

An invitation to the Pioneer Electronics Inc. roadshow is one of the most coveted in the consumer electronics business.

The Japanese company is hardly an industry giant; its $6.25 billion in sales last year were only about 13% of what Sony Corp’s. electronics division took in. And though Pioneer home theater systems, stereos and other products are highly respected, the brand lacks the mass-market appeal needed to be a must-carry for many retailers.

What Pioneer does have is a reputation for throwing good parties.

Last month, the company invited 150 high-end product buyers to the Victorian splendor of the Hotel del Coronado for three days of sumptuous banquets, live entertainment, ample opportunity to play with the latest electronic toys and -- Pioneer hoped -- plentiful ordering for the crucial holiday season.

Lavish dealer junkets, or roadshows, used to be common among consumer electronics manufacturers. In the last decade, tighter margins and cost-cutting efforts have made them about as rare as black-and-white TVs.

Panasonic, a division of Japanese behemoth Matsushita Electric Industrial Co., used to take buyers to Hawaii. “Now they bring you to New Jersey and you stay in a hotel over by their lovely Secaucus office,” said Kari Seward, the buyer for Bjorn’s, an electronics boutique in San Antonio.

But Pioneer remains committed to hosting an extravagant roadshow, using it as a tool to distinguish itself from its bigger and more famous competitors.

“We could hold it in a hotel by the airport -- get ‘em in, get ‘em out, get it done,” said Pioneer marketing director Gary Bauhard. “But part of what we are doing with this kind of event is relationship-building. We want to make the extra investment to bring them to a nice venue.”

Bauhard wouldn’t say how much Pioneer paid to host the Hotel del Coronado bash. He allowed that it was in the “hundreds of thousands” of dollars -- not a huge amount for a company that brings in more than $17 million a day in sales.

Bauhard also declined to reveal the dollar value of orders the event generates. But in the five years since Pioneer began holding roadshows at exclusive hotels and resorts, the company’s sales have grown 81%.

By contrast, sales at Sony’s electronics division have increased 62%.

Wining and dining big electronics chains like Tweeter Home Entertainment Group Inc. and Good Guys Inc., along with smaller retailers like Bjorn’s that cater to audiophiles and home-theater aficionados, isn’t as frivolous an exercise as it might seem, said Avi Greengart, an analyst with Jupiter Research in New York.

“Any manufacturer who is trying to play the higher end of the consumer electronics market is wholly dependent on distribution,” Greengart said.

Until 1999, Pioneer held several regional shows around the country to introduce dealers to upcoming products. The company decided to centralize the show to make sure it was delivering a consistent message.

Doing just one show also saved money. “It was more time-consuming from our executives’ standpoint for them to be going out more than once,” said Pioneer spokeswoman Amy Friend. “And we only had to ship the products out once.”

The Hotel del Coronado was chosen for the company’s last two shows, in part, for its proximity to Pioneer’s U.S. headquarters in Long Beach.

The length of the event was also weighed against budget. At one point, Pioneer executives considered adding an extra day for golf or other company-paid outings but decided against it. (They did hire an up-and-coming singer-guitarist to entertain at the closing night dinner. If Howie Day ever becomes a star, the Pioneer roadshow guests can say they saw him when.)

The event took about six months to plan. The first step was to figure out which of the 450 retailers in the U.S. that carry the higher-end of the Pioneer line would make it onto the guest list.

For the 150 who received invitations, the chance to stay in the historic hotel -- where rooms normally go for $250 to $700 a night -- was certainly an attention-getter.

“The Hotel Del is pretty irresistible,” said Johnny Fare, a buyer for Wilshire Home Entertainment in Thousand Oaks.

The first full day was devoted to talks by company executives on the direction and aims of the company, including the acquisition of NEC Corp.’s plasma display manufacturing business, which will be completed in the fall. The company also unveiled its marketing and advertising plans for the holiday season.

“It’s sit in a room and see lots of PowerPoint,” spokeswoman Friend said.

The toys came out the following day. A ballroom in the hotel’s conference center was configured into about a half-dozen small demonstration rooms, each lighted by an outsized chandelier that reminded buyers they weren’t in a drab industrial park.

In the stereo amplifier demo, Pioneer manager Keiichi Onodera played a one-minute snippet of a song by Jennifer Warnes on each of three new Pioneer units, which will carry price tags of $800 to $1,500. To make them sound as good as possible, he hooked them up to a pair of speakers that cost $15,000. “Quite a bargain,” Onodera quipped.

The 12 buyers in the room listened intently, some with eyes closed. To the audio unsophisticate, the three units sounded exactly the same. But buyer Fare later said the difference was considerable and had to do with sensing a “dimensionality” in the music.

“The better products present a clear sense of the sound having depth, width and height,” Fare said. “Even though it’s being played through only two speakers, you can feel that the singer is in one spot, the flute in another and so forth. It sounds fuller, more natural.”

Like the other listeners, Fare wouldn’t say how the Pioneer amplifiers compared with others they carry. “We love all our children,” he said.

After a buffet lunch on linen-topped tables at the edge of the beach, some of the buyers may have been tempted to ditch the roadshow and venture out into Coronado or take the ferry across the bay to downtown San Diego. Pioneer executives had to give its guests extra incentive to return to the conference center for an afternoon of hands-on play with the new models and -- most importantly -- a visit to the orders tables in the main ballroom.

So several executives announced that those who attended the afternoon sessions would get raffle tickets for a chance to win a new Pioneer DVD recorder or wireless home theater headsets.

It seemed to work. The sessions were well-attended, and many of the buyers weren’t shy about asking for raffle tickets as they went from room to room.

The order tables were busy. Josh Finkestein, audio buyer for Good Guys, said his company would be ordering thousands of units. That essentially will ensure that Good Guys gets an invitation to next year’s road show.

“If someone came year after year and didn’t write an order, we might say, ‘Gosh, is this a person we should invite?’ ” said Bauhard, the Pioneer marketing director. “But I don’t remember it happening.”

The afternoon ended with focus-group sessions that allowed Pioneer to gauge buyers’ reactions to products under consideration. One of the more controversial was a high-end home theater package that would include a plasma television, a surround-sound amplifier and multiple speakers.

On a scale of 1 to 10, James Feldstein of the Audio Den in Lake Grove, N.Y., gave this proposal a score of minus 10.

“If I sell a guy a high-end monitor, I want to sell this guy an amplifier and speakers,” Feldstein said. With two separate purchases, the store will likely make a larger profit. His objection was duly noted.