Conference napalm::commusic_v1

    
    who says thats what happens?
    
    The manufacturer wants to sell as many as possible.
	They sell to the dealer at a certain cost.
    The dealer wants to sell as many as possible.
        He sells at a certain cost.
            
        
    What does the manuf. care, as long as the cost to dealer
    is profitable, and the number of units sold is large?
    
    ron
    

    Shane (Profound Sound) told me something similar.  He's concerned
    about the fact that he has an 800 number and tends to beat the prices
    of the dealers on the east coast.  He wanted to make sure I got
    the number and heard about Profound from 'friends' (you all are
    friends, right?) before he could do business with me.  Evidently,
    there *is* something the other dealers can do to him if they feel
    he is 'unfair' competition.  I imagine that since he has an 800
    number and lives in Kansas (where the cost of keeping shop is lower)
    the dealers here are afraid that if the 'public' finds out about him 
    they'll do all their mail order with him.  (They're probably right!)  
    And, the only way they can nail him is if he openly advertizes on the 
    east coast.

    Steve

    re: .1
    
    Ron,
    
    Although I have never been given a definitive reason why a
    manufacturer would want to maintain the RETAIL price of his product, 
    I know that it is very commonly done and I'm not surprised that it
    happens in the music equipment industry.
    
    For example, I know at one time there were a large class of items
    that were "fair traded" (a misnomer if ever I heard one).  A fair
    traded item HAD to be sold at the price set by the distributor.
    
    One reason why manufacturers (and/or distributors) may want to set
    the price is that it may make it easier for them to get stores to
    retail their product,   The presumption here is that a store manager
    is more likely to carry a product if he knows:
    
    	a) that he isn't getting into a price war with other retailers
    	   who carry the product
    
    	b) He knows exactly what the profit margin on the product is.
    
    What's in it for the manufacturer is that he gets more outlets for
    his product, and hence more sales.
    
    This is just a theory I have.  Perhaps someone else knows the real
    story.
    
    	db

RE: .1

The manufacturer would want as many outlets as possible so as to sell as
many units as possible.  They would need to distribute to store front owners
to show their product off.

So the purpose of "suggesting" a retail price is to ensure sales and
customers to the store front owners.

I personally would prefer to deal with the store front owner, due to a
feeling of better/quicker service to problems/questions, but when it comes
to money out of my pocket I tend to go with mail-order.

Dan

Manufacturers don't necesarily want as many outlets as possible. In fact
they generally want as FEW as possible. It makes the whole distribution
system a lot easier. If your product is unique and in high demand you can do
without distributors at all, and just sell direct. Like Boogies, or like
VAXes. If your product is a commodity, i.e. interchangeable with others like
them (like PC clones) you need a lot of distributors so the consumer, who
can't tell one from the other, will pick yours just because it's easier to
get to.

I remember hearing from Daddy's, E.U. Wurlitzers and LaSalle's (the big 3
music stores in Boston) around the time that Roland introduced the MKS-20,
the alpha-Juno's and a couple of other big-time synth products that they
were looking for reasons to can some of their distributors. I bet they
thought (correctly) that they were about to become a real name-brand and
that the consumers (that's us) would "accept no substitutes" that (for a
while at least) they would be distinguishable from Korg and Oberheim and
whoever else was offering the same old VCO/VCA/VCF synth architecture that
was already saturating the market.

Manufacturers/wholesalers do have reason to care about the behavior of the
retail distributors.

Don.

	I can't speak to the music industry, however I have run into the
same situation with boats. 

	Specifically the dealer I went to was offering boats at about cost in
order to get customers in the door.  She was making her money on the EXTRAs
apparently.  Anyway, when the older established dealers got wind of the deal,
they went back to the manufacturer and complained (threatened to drop their
line or whatever).  The manufacturer's response was to back order everything to
this particular dealer, withholding shipments etc, until her retail price came
back up to a reasonable figure.  I guess the manufacturer figured he could do
without one small outfit selling lot's of boats, better than he could losing
larger, better established dealers selling lot's of boats.

***				START of SERMON:			***


	Personally I think the whole thing reeks of price fixing and anti-trust
violations.  The small dealer in this case had very low overhead because, in
part at least, that it was a family business in a small marina with no fancy
showroom, no salesmen, mostly word-of-mouth advertising etc.

If the BIG guys can't keep up, they should be taking notes....not crying foul. 


***				END of SERMON:			***


					Al

For those of you who don't know the story, I put this note in due to
Rolands price fixing of the D-50 at $1895(more in the D-50 note).

Well, I did find it for cheaper, and I finally got the gumption(SP, is
this really a word?) up to stop by E.U. Wurlitzer and tell Jack I would
be getting mail-order(I couldn't not tell him).  So besides being unhappy
and saying that everybody does this and he's used to it, he told me why
Roland sticks to the price.

By fixing the price of their Pro series line(D-50, S-50, MC-500, MKS series)
they hope to control the used price market.  Unlike what Yamaha did with
the DX7, whatever that was.  So if you purchase a D-50 for 1895 you shouldn't
expect it to be worth 700 in two years.

Dan

RE < Note 799.9 by FDCV01::ARVIDSON "Leggo my ego!" >

>By fixing the price of their Pro series line(D-50, S-50, MC-500, MKS series)
>they hope to control the used price market.  Unlike what Yamaha did with
>the DX7, whatever that was.  So if you purchase a D-50 for 1895 you shouldn't
>expect it to be worth 700 in two years.

	Jack is a salesman, just like all the others.  He's out to cover his
posterior for the inflexibility that Wurlitzer imposes upon itself.  If, per
chance, he really believes what he says, he's in need of a good shot of
reality.

	Roland charges high when a product first comes out only because they
have worked out a scheme to battle the price of exporting.  In truth, Roland
seems to have their act together technologically, and most of their products
are insightful in the sense that they seem to understand what musicians want.
But their marketting scheme is to lower the price themselves after they've
made their way clear over tarriffs and other export overhead.  Soon they
lower their current list to more reasonable prices and enjoy the hype; 'Wow!
a $2000 keyboard for $1200!!!'  There seems to be at least one more phase
involved; the closeout.  Sometimes the closeout really isn't a closeout, it's
just a way to deal with diminishing sales at the higher price.  Look at the 
following products:

		JX-8P				SRV-2000
	----------------------         -------------------------
orig $$         1600                            1400 (?)
                  |                               |
                  V                               V
markdown        1200                            ????
                  |                               |
                  V                               V
closeout (?)     799                             499 (but it's not REALLY a 
                  |                               |     closeout, because...)
                  V                               V
            discontinued                    'Well, it was selling so good, we
                                       decided to keep it at this sale price...'

	By this track record, it's clear that Roland is not the least bit 
concerned with the depreciating value of their products once in the consumer's
hands.  In fact, their actions have only served to exagerate the depreciation
value; 'You want $700 for your JX?  You're crazy! They were selling for $799
brand new last month!  I don't care how much you paid for it...'


	Dan

    
    	Somehow Jack's rationale isn't rational.  What an XYZ-123 MkI
    is worth two years from now is going to be a function of how successful
    its been as a product, what is replacing or superceding it and how
    much that is selling for.  I just can't see how price fixing two
    years earlier would have any effect.  I can see a couple of reasons
    why manufacturers would want the used price of their equipment to
    remain high, a) residual value at trade up time makes sales easier
    b) brand name loyalty is easier to win with products that appear
    to depreciate more slowly.  
    
    	Reg
    
    

RE: previous replies

I think I read a misconception.  Roland has set the price of the D-50.
If *ANY* retailer sells/quotes a price of lower than $1895.00 that
retailer will not be allowed to sell the PRO series line(period).
Wurlitzer has no option but to sell the D-50 and S-50 at the "suggested"
retail price.  Maybe in the past Wurlitzer has rooked themselves, but
not in this case.

My complaint is with Roland.  Not with Wurlitzer.  Maybe Jack is a
little naive, or selectivly naive since he is a salesperson.

Dan

RE: < Note 799.11 by EUREKA::REG_B "My personal name has expired ?" >
>                    -< Is that "Jack the Ripper (offer) ? >-
No, it's the "Roland give the consumer price fixing."
    
>    	Somehow Jack's rationale isn't rational.  What an XYZ-123 MkI
>    is worth two years from now is going to be a function of how successful
>    its been as a product, what is replacing or superceding it and how
>    much that is selling for.  I just can't see how price fixing two
>    years earlier would have any effect.
Roland feels/knows this is a nice product and is betting/confident that it
will still be backordered when they announce a rack-mount.  So in two years
the price of a used D-50 will be a little bit less than the D-50R.  So if
they are right the customer gains, if they are wrong the customer loses out
and either way Roland still gets its money.

>I can see a couple of reasons why manufacturers would want the used price
>of their equipment to remain high, a) residual value at trade up time makes
>sales easier b) brand name loyalty is easier to win with products that appear
>to depreciate more slowly.  
Yup.

All in all, I have ordered the D-50 thru mail-order and will wait.  $100
down until it comes in.

Dan

    I was at Union Music a couple of weeks ago looking at a Mirage.
    The salesman, Jeff, told me that they don't discount the Mirage
    or any other Ensoniq products. He said furthermore that no dealers
    are discounting any Ensoniq products. I found this hard to believe.
    Has anyone found this to be true, or is Jeff just giving me a line
    of sh*t?

    Bullpuckeys...
    
    I spoke with Karl who owns Union Music. He said he'll try to match
    any reasonably local (~30-40 miles) dealer's price on any Ensoniq
    product.
    
    Considering that the ESQ and Mirage are HOT items, they don't have
    to discount a whole lot. But they WILL talk...
    
    Edd