 The Clarinet BBoard
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Author: theclarinetist
Date: 2003-06-29 04:48
Just out of curiosity, where do clarinet companies get their list prices from? The "list price" is always several thousand dollars more than they actually cost... for example, the list price for an Bb R-13 is around $4,000. However, I've never seen one for more than approx. 2000.... The same is true for other brands...
I'd like to assume that this is just a lame marketing attempt to make us feel like we're getting a bargain (they do it for other products, so why not clarinets?), but maybe I'm just cynical... Where do they get these numbers, and what's the point of even listing them?
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Author: hans
Date: 2003-06-29 14:40
BobD,
I suspect it's marketing types without MBAs that cause the bizarre pricing. There are too many people in business who don't know its First Rule, let alone the 4 Ps.
Hans (MBA)
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Author: theclarinetist
Date: 2003-06-29 20:28
This doesn't really go to the question of specific clarinet pricing... but what are the first rule, and 4 ps? Just curious!
Don (AA - Social Science) <-- don't laugh... I'm working on it!
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Author: Rick Williams
Date: 2003-06-30 14:20
I wouldn't blame this on MBA's either but rather industry history. Most industries have specific discount levels which work back from the MSRP. So for example, a $4000 MSRP clarinet sells to a large volume retailer for say 50%+10% off or $1800 who then in turn sells it for $2000. These are made up discount figures, just to illustrate the point.
What happens these days in some industries is that the manufacturer calculates the price they need to sell at then they simply apply the standard industry discount that will work back to that price. It is usually a lot more complicated than that because of market forces which bear upon price positioning. There is also the issue of an intrinsinc need to place relative value. How many "On Sale" signs do you see that don't list the regular vs. sale price?
If you want to see something interesting, look at the relative discounts in percent between student-intermediate and professional clarinets by brand. Then compare it specifically to Yamaha Clarinets which almost universally are not discounted as deeply. You might think that dealers are just holding the line on Yamaha, but it could also be that Yamaha doesn't sell the instruments at deeper discounts.
I've been told by several inside sources that clarinets are the most heavily discounted musical instruments. I've heard this from dealers both local shops and the larger national retailers and a manufacturer, so I give it some credence. The result for consumers is low ball pricing, but the other side of the equation are cost cutting efforts by everyone upstream of the sale. So a play tested clarinet translates to one that doesn't have anything missing or falling off it and manufacturers spend less time on fine tuning the assembly, leaving most purchasers needing to make a trip to the tech.
Best
Rick
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Author: Mark Pinner
Date: 2003-07-01 23:43
You have discovered one of the greater fictions of the music industry. The recommended retail price. I am really surprised at the prices quoted in the USA on Buffet. In Australia we pay around the same prices in Australian dollars, likewise on Yanigasawa, Leblanc and Selmer. That means we are paying just over half price. The consequence is that American products such as those produced by the UMI conglomerate Armstrong, Artley, Selmer USA etc. become overpriced here and uncompetitive not to mention some bad quality control and cut price Mexican labour. Perhaps some MBA genius or economist would like to explain this trade anomoly although if they did nobody else, especially one of sound mind would understand what they are talking about . I understand about cross rates on currency before anybody states the obvious. These anomolies are not explained completely by cross rates. I called Woodwind and Brasswind for a quote on a Yanigasawa 991 tenor sax and was told that the retail was in the vicinity of US$4195.00. Our local importers sell these for AU$4900 with the exchange rate in the region of AUD$1 = around US$0.60 I would say that we are getting a better deal in a smaller market. The proximity of both countries to Japan would be roughly the same. The same phenomena occurs with Yamaha although most of their stuff is made in Indonesia which is closer. Always remember, nobody pays the retail price unless gullible or shopping by mail order or other convenience method.
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Author: Rick Williams
Date: 2003-07-02 12:09
Interesting point Mark. If my math is correct your example works out to about a 20% lower "exchange adjusted" price. So where does the 20% come from?
This is just a quess on my part, but here are some possible areas to look at.
First, MSRP isn't always set by the factory nor are MSRP's always the same from world region to world region. Depending on the distribution, an importer may be setting an MSRP for a particular country or the factory may set different MSRP's or sell at different price structures. Japan is particularly well known for this practice. They may decide they need to sell lower in Australia than the US and they are perfectly free to do so. The two markets are far enough removed that it typically wouldn't cause an issue. In the US our pharmacuetical industry is the best known practicioner of this, which is a sore point among many consumers...g
In the US, Britain and Canada and I would assume Australia because of its association with British law, have laws which essentially say that manufacturers in those countries must sell to equal buyers at an equal price, but those laws typically do not apply to international sales.
Another area to look at are relative tax structures. I have no idea what the import duty is on musical instrument parts vs. assembled instruments in the US or Australia but that could easily be part of the difference. The EU Vat tax structure for example can and does cause wide price differences depending on the origin of the item for consumers in EU countries.
This probably doesn't begin to cover all the factors, but I would guess is makes up the best part of the 20% mystery.
As an MBA and and MS in economics I hope this was mostly understandable...BG!
Best
Rick
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