A small factory, a big one and prices
Posted by: Arye_Gur on 25 August 2001
People are claiming that by definition, products manufactured in small factories must be more expensive than products that are manufactured in a big factory.
The argue was about the prices of products from small manufacturers like Naim, Linn or Exposure compared to the prices of products manufactured in Sony, Philips and the like.
Members claimed (in an other forum) that small companies asking for higher prices in order to give the products more prestige - and the biger comapnies can have a cheaper raw material and a better ratio of number of products per emploies.
I don't agree with this idea first because of the thought that altough Naim (for example) and Sony are manufacturing stereo systems, they are not equal players , and each has different ideas as a base for its acts.
I don't think that a product can last on the market for a long time if its price is higher than what it is worth.
I also don't think that "big is cheap" because it is a well known fact (at least to me) that biger organizations are recating quite slowly to new ideas, revolutionary ideas are difficult to acheave as more people are involved in the processes (a big organization is more "frozen" than a smaller one).
What do you think ?
Arye
quote:
Originally posted by Sproggle:
Quote: (Rico) "No, but they'd spend that 10K on an amp made by a Sony subsidiary with a different name, if it was better than the competition. Lexus, anyone?"Quote:
There is a big difference between cars and hi-fi. I'm pretty sure that a high proportion of people who buy cars in the Lexus bracket are primarily interested in a status symbol on wheels. They wouldn't be seen dead in a Toyota LS400 [they have them in Japan].
A Lexus truck would undoubtedly damage the image too, and make existing owners reconsider the "statement" that their ownership was making (or some such bollocks), but Mercedes have made trucks, taxis, the wonderful Unimog and other utilitaria for years without any "brand perception penalty".
How? Honestly good product, in whatever market, with minimum compromise, sold for enough to fund backup and R&D, for years and years and years. It doesn't happen overnight, and in the process you acquire a lot of relatively tiny specialists, such as International Harvester and MTU Diesel, to feed the talent pool.
(and then you can bugger it all up with an "A" and an "M", and maybe get away with it 
)
The Linn Corporation (sic) seem to have had mixed fortunes with the Classic, IMHO because the thing doesn't adhere strongly enough to "classic" Linn tenets. Moral is surely that you can go successfully down-market, but it's very dangerous if the name is the only thing propping the product up. You don't expect bits to fall off your Merc.
The Sony Esprit thing was IMHO an attempt to grab a slice of Levinson/Krell cake. Technics tried something similar in the late 70s with enormous VU meters which was of course de rigeur at the time. Technics, in some ways were themselves the specialist division, being a brand of Matsushita (along with Panasonic), but they still felt it was OK to market horrible home organs with cabriole legs (Parry alert) under the same name. Possibly they both found that if you price something in proportion to the front panel thickness, the only person you thrill is Ken Kessler. Of course, that may be quite enough...
There was even a Sony/B & W badge engineering deal at one time for speakers. My recollection is that B & W make all the speakers, but those with the Sony badge got relatively reasonable cabinets, while the B & W ones were very Parryesqe, curly bits and all. I may have a pic somewhere, will try and dig it out...
Best;
Mark
(an imperfect
forum environment is
better than none)
[This message was edited by Mark Ellis-Jones on WEDNESDAY 05 September 2001 at 12:15.]