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Hi-fi and AV specialist TAG McLaren is set to revolutionise the retailing of high-value AV equipment with the launch later this year of what will probably be the most technically advanced processor on the market.

Born from the purchase of well respected UK hi-fi specialist Audiolab in 1997, TAG McLaren Audio already boasts the best selling stand-alone AV processor in the UK and an unshakable brand loyalty.

The name is synonymous with the hi-tech world of F1 motor racing and has encouraged a strong following.

Building on this enviable customer loyalty, the company is launching its AV192 processor towards the end of this year. Not only will this probably be the most technically advanced AV processor on the market, having seven times the processing power of the AV32R, it represents a new concept in retailing cutting-edge AV equipment.

Most consumers only use a fraction of the features of an AV processor--but obviously have to pay for them all. While the likes of 7.1 channel THX EX processing and component video input is these days considered de rigueur, only die-hard home cinema enthusiasts are likely to make full use of these features.

The answer, says TAG's chief executive Dr Udo Zucker, is a modular approach.

"Small scale manufacturers have no ability to compete in the mass market, so you need to develop a niche," says Dr Zucker. "TAG McLaren's niche is quality combined with securing customer loyalty."

The idea is that the retailer will stock a single AV192 processor for demonstration purposes. This has every option fitted from DVI switching to a 2,048 line video scaler.

The customer then designs his own processor by specifying an AV192 base unit and adding feature modules to his own requirements and purse.

The order then goes of to TAG McLaren's factory and the fully personalised AV192 is delivered between 24 hours and a few days later (depending on module availability).

The customer only pays for the features he is going to use and the retailer is not burdened with having to carry a wide range of stock options. In fact, it is conceivable that the retailer will only ever need one stock unit for the entire sales life of the processor--likely to be several years with many upgrades along the way.

The customer can also upgrade his AV192 processor at a later date to include any of the 19 or so modules likely to be available from launch or any of the subsequent upgrades in the pipeline. The initial swathe of modules includes progressive scan video processing, THX Ultra 2, XLR balanced outputs and a DAB tuner.

For the AV32R owner wishing to upgrade to the new processor, TAG McLaren will refund 100%--yes, 100%--of the purchase price of their AV32R against the purchase of a new AV192.

For AV32R owners, that is a no-brainer.

This amazing trade-in offer has been achieved through recycling. Many of the components in an AV32R can be recycled, reconditioned and used again. No-wear components such as the chassis, fascia, transformer, feet and such like can all be refinished for use on future models. In fact, up to 85% of a returned AV32R will see the light of day again as a brand new TAG McLaren component.

Consumers have a very cost effective upgrade path, retailers retain a customer loyalty second to none and, with the WEEE directive on recycling about to make itself felt, TAG McLaren's product strategy is perfect for a greener industry.

TAG's Dr Zucker believes that quality engineering in a focused market and good retailers have underpinned the company's growth.

Tag McLaren's early growth was undoubtedly hampered by bad reviews from a rather cliquey British hi-fi press. The perception that a company known for F1 racing could not possibly improve upon the audio designs of esoteric UK hi-fi manufacturers undoubtedly tempered some reviews.

However, by 2000 the near-2,500 [pounds sterling] AV32R processor had become the reviewers' favourite and has gone on to become the best selling AV processor in the UK and much of mainland Europe.

One in two AV32R owners has purchased a matching 100X5R multi-channel power amplifier and nearly one in four own a DVD32R DVD player, which has only been on sale for a matter of months.

"Good press is helpful, but good retailers are far more important," explains Dr Zucker. To underline its commitment to its 100 or so UK retailers, the company runs regular training days at its head office in Huntingdon, near Cambridge.

"We put a lot of effort into training our retailers as it is the retailer [not the press] that sells the product."