2. cables
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Pure Monstrosity re: Monster tm cables

NEW YORK - TO ENCOURAGE audio salesmen to push its costly stereo cables, 12 times a year Monster Cable flies a dozen or so top producers from stores around the country to all-expenses-paid weekends at places like the Napa Valley, Hawaii and Germany.

Founder, chairman and sole owner Noel Lee even lets the star salespeople zoom around in his 13 sports cars, including a $200,000 Ferrari.

Lee needs good salespeople because his product requires lots and lots of selling. Buy a $400 stereo from the Good Guys in California and chances are you'll also walk out with $50 worth of Monster cables. Buy a $1,000 Marantz amplifier from Ken Crane's Home Entertainment in California and you'll get sold on a $100 connecting cable.

Do you really need that fancy wiring? That depends on how well you hear. Some say heavy-gauge, rubber-coated lamp wire at 25 cents per foot affords nearly as much fidelity for audio signals as the gold-tipped, electromagnetically shielded cable Lee sells for between $3 and $125 per foot. Chances are most will never tell the difference. In short, it is a product where most of the value is in the mind of the buyer. Thus, Lee lavishes attention on the people who move his goods.

Unlike Kimber Kable and Straight Wire, which do minimal sales staff training and rely almost exclusively on print advertising, Monster Cable puts $13 million a year, 15% of sales, into training and incentive programs. These are aimed at convincing store owners and appliance salesmen that it pays them to push Lee's products.

Salespeople get fancy trips. Store owners get fancy markups. Most of the customers, after all, come to the store armed with competing price quots on the CD changers and the amplifiers. The wires, in contrast, are an afterthought and don't have to be competitively priced. Monster's cables typically yield a 45% gross margin, while the more visible audio and video components hover around 30%.

Cables are to a stereo store what undercoating is to a car dealer. At Ken Crane's, a chain of eight stores based in Hawthorne, Calif., Monster accounts for 2% of retail sales volume but 30% of gross profit.

Lee, a short, crisp 50-year-old with a mechanical engineering degree from California Polytechnic State University, started this firm in 1977.

He's since built it to expected sales of $90 million for 1998, more volume than almost all of Monster's competitors combined. Lee probably nets 10% pretax.

The huge sales and training budget covers more than junkets for the retailers. Sales personnel are taught things like this: Cheap cables pick up electronic noise from telephones, televisions, hair dryers or the audio equipment itself. Premium cables deliver more signal. What they don't say is that you can solve some of the interference problem by draping your wires away from sources of interference.

After Lee gets through training a store's staff, no customer can leave the store without becoming cable-conscious. In a Good Guys shop near San Francisco, Monster cables visibly hook up every active product display. The Monster name is printed on canopies above the sales racks, and its packages are lined up like invading army troops on the shelves.

Every month Lee sends out the numbers to each store that agrees to his aggressive sales strategy, tracking the performance of each salesman and a store's overall performance rank among competing retailers. The rankings are based not on dollar volume but on the percentage of customers who go out of the store with a Monster product. It's from this list Lee selects the winners of his all-expenses-paid weekends.

Early in the program, one Midwest salesman almost totaled a Ferrari by driving it off a cliff, but was saved from the Pacific Ocean by construction netting. For Lee, it was just another cost of doing business.

It takes sizzle to sell sizzle.

(from Forbes Magazine)
neubilder
jlambrick
138 posts
 
Please forgive the following rant:

I think the basis for the arguments against Monster is disdain for unbridled capitalism. All's fair in love and war (and capitalism) but the free market should encourage excellence and allow the little guy with the big idea to come out on top. I know that this naive and probably simplistic but in a perfect world, the best product would win. Enter marketing. Sales incentives and media blitzes provide an environment where pure crap can be foisted onto the public. Is rampant marketing evil? Personally, I don't care much for it. It's taken variety out of radio and TV and forced the likes of Britney Spears and N'Sync down our throats. It's created an environment where it's impossible to buy a hamburger without being assaulted by a barrage of ads for the latest movie (and action figures for the kids). It's forced many unique mom and pop stores out in favor of generic super stores. Free market forces are no longer encouraging excellence, they are rewarding the aggressive and greedy in our society. Mega-marketing, sales incentives and lawsuits are all convenient ways of making lots of money but what do they actually produce? I'm just glad that there are still a few people out there who are compelled to make the best products they can and that there are also a few people who reward them for doing so by buying their products.
neubilder OP
129 posts
 
Well said Jlambrick. It's up to the consumer to discern quality from pure crap - unfortunately the average N. American is not very discerning or critical. The majority of the public seems quite happy partaking in a throwaway society where quantity of crap takes precedence over quality, aesthetics, and durability - not to mention that all this cheap plastic crap is marketed in the most ambarrasingly tacky manner. An appreciation for visual harmony in products, as well as in architecture, cities, and the landscape was, for the most part, lost somewhere around the 1950's. That may seem like quite a digression but if I'm not mistaken, what I and I think many of us seek in our hi-fi systems, is the ability to step out of the mundane world that is getting more despoiled by the day, and tap into a pure and harmonious world of music. I guess I'm becoming a jaded romantic.
twl
3,251 posts
 
At the risk of entering a political area, one reason why the society at large has become so mercenary, is because that is what they have been taught to do from the time they first opened their eyes. The media blitz of materialism, which is foisted upon us by those who control the captital, the production, the distribution, the marketing, the retailing, and the planned obsolescence, is a game in which the consumers are actually "farm animals" being "fleeced" of their dollars by psychological manipulation. Since this mental control game was perfected years ago, and has been undeniably successful in its implementation, the only game left to play is, which company will finally monopolize all the world's production? In a world where money is the only valued commodity, those with the most money rule. Who has all the money? I know, but I am not going there. This is an audio forum after all.
gallaine
114 posts
 
I cannot argue against Jlambrick's assertion that, "Sales incentives and media blitzes provide an environment where pure crap can be foisted onto the public." But the operative word here is "can". I have not personally experienced the marketing tactics ascribed to Monster Cable, even though I have recently frequented stores which carry their products. I would also add that the logical conclusion of the belief that sales incentives are bad is that incentives in any industry are bad. After all, as a software engineer, if I receive a bonus for shipping a product within schedule and budget I might be tempted to take a few short-cuts just as a salesman might be tempted to inflate his volume by foisting unneeded and unwanted product on an unsuspecting customer.

My issue here is that a single article with little in the way of fact is not a sufficient basis for arriving at an informed opinion. Journalism is not free from the sizzle or aggression ascribed to Monster Cable. Lurid tales of child abuse, murder, rape, and theft sell. Nor are journalists free from bias; not many people are, including me. Because it is in print does not make it true. My position is not that *all* journalists are rumor-mongers and all newspapers false. But that we must take care when forming an opinion for or against a company or person based on what we read. Again, I ask, if you have further information that corroborates the article please share it. Otherwise, lets exercise some moderation; I'll admit to some exaggeration since this thread has been rather civil in its disagreements.

Is capitalism running rampant? Can society's ills be laid at the feet of a mechantilist elite ready and willing to "fleece" us of our hard-earned money? Are we doomed to be sheep unable to throw off the shackles of a program of conditioning that begins at birth? I don't know. Am I being melodramatic? Yes. Perhaps I am not quite as alarmed as some about the future. Maybe I am an exception, but this aggressive marketing that others speak of has less and less effect on me as the years go by; not that I am entirely immune. I watch television at most a few hours a month, read popular magazines almost not at all, shop at major department stores even less, throw unsolicited mail directly into the trash without even opening it, and do not answer the telephone unless I recognize the caller with caller id. I don't do this out of paranoia. It is simply my response to unwanted marketing - avoid it or ignore it when that isn't possible. Instead of television programs I read books (which are largely free from advertisement) or watch movies on DVD (fast-forwarding through any advertisments at the beginning if possible). The few hours of television programming I do watch are mostly PBS or A&E. The result is that I am less and less aware of the latest and greatest cereal, soap, Ginsu (tm :) ) knife, orange peeler, frozen entree or Gee-gaw. This isn't to say that I am free from materialism. But, I suppose, this is more a response to Twl's assertions. It is possible to escape a large part of the marketing hype, though you may argue that my techniques are rather severe or that I should not have to exercise them in order to be free of the evils of aggressive marketing. Maybe so.
gregm
3,405 posts
 
Gallaine, I don't think anyone would argue that your [techniques are rather severe or that.. (you)...should not have to exercise them in order to be free of the evils of aggressive marketing]. It's more like a life-style & as such probably doesn't put any strain on you. I think that what certain posters are alluding to is that the marketing techniques can captivate and affect a significant majority of people; and that these people act according to the marketing plan, at least for some time; this, in turn, limits available choices (mom & pop storeschoice in the arts, in entertainment, whatever...).
To take an extreme example, if the latest global mega-trend product is disposable art -- "look once, enjoy, & throw away. The next piece in your mail tomorrow" --then that's all that there will be available. You're free to choose, of course; but in order to really choose, one needs to have SOME variety...
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