----- Original Message -----
From: "David J Brooks"
Subject: Re: UK guys, beware (price hike)
I did not do that well in my grade 12 economics's class(but i did pass
it) but wouldn't it make more sense in hard times, to lower the prices
a bit, to drive sales, then bump them back up when things get
better.??
Everything I learned about pricing, I learned from Klaus Bohn, a
particularly talented and successful portrait shooter who makes his home in
Moose Jaw, of all places.
Heres what he said:
If you drop your prices 10%, you need a 40% increase in sales volume to
return to the same level of real income.
I don't know how much of this is true, how much is hyperbole, but it does
have a ring of truth to it. I kinda doubt that Pentax users would drive
sales that much with a small price decrease.
Read the Forum Neurotica threads about the DA*55/1.4. There is always
someone making the point that the FA50/1.4 is still 1/3 the price, which
makes 55/1.4 buyers dopes with more money than brains.
The Pentax user mentality seems to be one of doing everything possible to
drive the company to the brink of bankruptcy, all the while bitching that
the equipment isn't good enough (I tend to be guilty of that, but I do my
part WRT buying new cameras and lenses), that there is no point in buying
new when 40 year old glass has similar IQ (a term that I hate more than Bin
Laden), and if on waits six months the price will drop, so don't buy new.
If they drop the price 10%, the user base will whine that they are being
thrown a bone, but that doesn't change that they are being treated like
dogs, and the price drop should have been more. If they try to raise the
price, they get pilloried for that as well (the recent price increase on the
50-135 being a prime example).
No, I think it best to set a price that will give a needed margin over the
expected sales volume of the product and stick with it. Price drops may work
for the big two, they already have the sales volume built in, unfortunately,
we have chosen a low volume vendor who doesn't have the luxury of sales
volume to keep wads of cash flowing through the company, so we are going to
have to pay more for similar quality.
William Robb
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