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Consumer Demand for Technology
Invigorates Installing Dealers
With changes in technology and consumer habits,
installing dealers are in a prime position to drive high-end systems into the home.
Results from Parks Associates’
1998-1999
Dealer Survey, an annual report that features a survey of 230 dealers across
the nation, indicate that dealers are benefiting from increasing consumer demand for both
high-profile entertainment systems and home wiring or networking packages. Equally
significant is the growing incidence of consumers who are fortifying their homes as
entertainment hubs. Among the dealers surveyed, 95% sell audio and video equipment in a
market traditionally associated with lighting, in-house intercom, and security.
"In a flourishing market that is becoming increasingly more competitive,
understanding the business of installing dealers and the many reasons they have for their
brand preferences is becoming a critical success factor for home system
manufacturers," said Jill Markus, analyst for Parks Associates. "Without this
knowledge, manufacturers are not optimizing their market share and profits."
Not surprisingly, a high-profile brand name contributes to dealer and consumer
preferences within entertainment categories. Dealers of audio and video systems in
particular attribute brand-name recognition to the success of products from manufacturers
such as Sony, Mitsubishi, and Yamaha. These manufacturers frequently utilize
"pull" promotional strategies, where they tout their products as high quality
and build the strength of their brand name; therefore, consumer requests dictate the
product line that many dealers sell in these categories. For the more traditional home
systems categories, such as lighting, home control, and telephone, end-user friendliness
and easy integration are pre-eminent factors to a brand’s success.
In addition, changing lifestyles and habits among consumers, such as the growing
number of work-at-homers as well as the acute demand for convenience, have helped the
market for advanced systems and wiring packages that tie together previously disparate
systems such as security, telephone, and appliance control. Among the dealers surveyed,
one-third sell advanced systems requiring a two-way network, and 43% pre-wire homes with
whole-house structured wiring packages. The dealers’ customers are increasingly
looking to technology to create both an amiable and professional atmosphere in the home,
and the wiring/networking packages address the growing high-tech demands of the market.
For the moment, however, the whole-house aspect of the home systems market remains in the
realm of the high-income consumer with a large house. More than one-fourth of the dealers
pre-wire nine or more rooms in a customer’s house, with seven being the average
number of rooms pre-wired in a typical installation job.
Despite the current demographics of dealers’ customers, Parks Associates believes
the home systems market will continue to grow, especially among the middle-income
consumers. The market research company forecasts that the incidence of multiple computers
will reach almost 30% of all US households by the year 2002 and the penetration of online
services will reach 50% of all US households by the year 2004. With these technology
drivers in place, consumers will increasingly look to advanced systems technology to
organize and enhance their homes, and the dealer population is already beginning to
reflect this potential. Among the dealers surveyed, 46% were working for a business that
has existed for no more than nine years, indicative that the increased interest and demand
has brought new dealers and more competition to the home systems market.
The
1998-1999
Dealer Survey was
conducted from September to November 1998. Companies wishing to purchase this report
should contact Parks Associates at (972) 490-1113 or e-mail to sales@parksassociates.com.
About Parks Associates: Parks Associates is an
internationally recognized market research and consulting company specializing
in emerging consumer technology products and services. Founded in 1986, Parks
Associates creates research capital for companies ranging from Fortune 500 to
small start-ups through market reports, primary studies, consumer research,
custom research, workshops, executive conferences, and annual service
subscriptions.
The company's expertise includes new media, digital
entertainment and gaming, home networks, Internet and television services,
digital health, mobile applications and services, consumer electronics, and home
control systems and security.
Each year, Parks Associates hosts executive thought
leadership conferences CONNECTIONS™, with support from the Consumer Electronics Association (CEA®), and CONNECTIONS™ Europe. In addition, Parks
Associates produces the online publication Industry Insights in
conjunction with the CONNECTIONS™ Conference series.
http://www.parksassociates.com |
http://www.connectionsconference.com |
http://www.connectionseurope.com
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http://www.connectionsindustryinsights.com
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