Over-Priced basses?

[FromTheBassMent]

I will highly disagree with this statement, most of all with the part that I marked with bold.
It is true that few builders will set their prices below the usual price on the market. However, marketing doesn't mean to calculate production cost at all; rather, it is the legend that marketing is trying to create, hence the math. The higher the price, the more attention the legend will attract.
Speaking exact bass brands would be violation of TB rules, so let me make other examples. In the 70-ies, a new casta of luxury brands emerged, their goal being solely: more money for the same stuff.
The funny thing is that Lexus, Acura and Infinity are sold in other parts of the world under their original badges: Toyota, Honda and Nissan. I don't know if that happens in the USA, but in Russia, you may buy either a Lexus RX or get a Toyota Harrier, a Lexus LX or a Toyota Land Cruiser, an Infinity QX or a Nissan Armada . Save for badges and sometimes shape of headlights they are the same cars (please note that the same names may be applied to quite different cars in other countries), built from the same molds in the same facilities. Well yes, Lexus equals to only top version of Toyota, but the rest is nothing but marketing. And guess what - they are priced differently.
Just several months ago, when sales have gone deep, several guitar companies raised their price tags. Is that the natural way how the demand/supply law apllies? No way, that is measures taken to artificially inflate interest.
For such a builder, a waiting line is just perfect. On the contrary, satisfying the needs of customers just in time and thus dissolving the waiting list is a disaster. So please don't say someone's so good people spend months to wait - that is part of marketing, so it is a bad example.

"We're expensive because we're doing good", huh? In real world, once this line is crossed, you have to watch out for clerks falling on your head from their windows.

Wow, you've gone to great lengths to disagree with me by paraphrasing exactly what I said in both of my posts in this thread:

The "worth" of any commodity is determined by the price the market will bear. Any producer of any commodity who overestimates what the market will bear will fail.

This is "Business School 101."

Your example about the re-branding of "luxury" Toyotas and Nissans is precisely the sort of thing I'm talking about. If consumers had walked into Lexus dealers when they first appeared, looked at the cars and said, "These are just Camrys," the merchandising experiment would have been an epic failure. But it was not, because Toyota correctly surmised that a large number of consumers would perceive enough value in a "luxury" Camry to pony up the extra cash. It's been a highly successful endeavor, because the consumer market has supported it. If people are buying your product in droves, then you've clearly done an excellent job of specifiying a price point that consumers believe is commensurate with the value of the product.

The fact that Toyota and Nissan use different marketing and pricing strategies in other parts of the world than they do in the US further reinforces my point. They have studied each market, figured out what it will bear, and priced their products accordingly.

How is this different for basses? Why would you bold my statement about the marketing of basses and disagree with it, and then give an example about autos that precisely proves my point?

When TBers express an opinion like, "I don't think Warwicks are worth what they're charging for them," they're not providing any sort of market analysis. They are simply saying, "Given my budget and my needs, I do not see sufficient value in Warwick products to spend my money on them." The mistake people make in these declarations is thinking that because they have this opinion they have thereby invalidated Warwick's business model.

Clearly this is nonsense. There are enough consumers of bass guitars on the planet who do see value in Warwick products commensurate with their pricing to keep that factory in Germany humming. This means that Warwick got the math right.

I agree that the perception of "luxury" sometimes is generated in the marketplace merely through pricing, but this can only be sustained up to a point. "Luxury goods" must meet certain minimal standards of quality because even in this niche market there is tremendous competition.

However, I would also posit that if Warwick's prices when they first hit the USA had been double what they were, that Warwick would have gotten the math wrong and their business plan would have been a failure.

So explain to me again what it is that you disagree with. Because your previous post is 100% in agreement with everything I've been saying, except for the part where you say you disagree.

 

[Relayer71]

name. Since my understanding is that Cort and Samick (I believe) manufacture about 80% of the basses sold in the US, he is implying that a lot of people could be paying a markup for a "brand name." I'm not saying that he is correct--just passing information along.

That may very well be true but not in all cases. That would assume that every manufacturer/model use the same specs/materials and they clearly don't.

Quality control plays a huge part too. You pay a factory to a premium to ensure that NOTHING EVEN REMOTELY CLOSE to a B-grade gets past the door and they will do it. Otherwise they will chuck a few in with each order (normal practice with most manufactured goods) which accounts for some of the crap you see on lower priced mass produced goods.

Design plays a part as well. Even if 2 guitars are made of the exact same materials one may be fundamentally better than the other by way of smarter design. You probably can't put an actual dollar cost on ergonomics but many will gladly pay a little more for bass "A" if it is very comfortable to hold and play or easier to adjust/set up even if it costs the same to make as bass "B".

Also, because several brands are made at the same factory it doesn't mean that factory sources materials from the same suppliers for all those brands. Some manufacturer may prefer the quality of one supplier's hardware over another. Another brand may not care so much so the factory will source it out to the cheapest supplier they can so they make more profit.

 

[chris lykins]

I cant believe no ones said Fodera.

 

[vene-nemesis]

I cant believe no ones said Fodera.

Foderas are overpriced if you compare the production prices against the retail prices, but being by far the most desired bass brand and having a 3 year waiting list (plus a buch of people whos willing to pay whatever they ask) is what makes their basses so expensive.

 

[Brad Johnson]

Foderas are overpriced if you compare the production prices against the retail prices, but being by far the most desired bass brand and having a 3 year waiting list (plus a buch of people whos willing to pay whatever they ask) is what makes their basses so expensive.

How does production price figure in selling price... other than it making sense not to sell below it? Production is not necessarily the only cost involved in putting an instrument out for sale.

 

[Brad Johnson]

I cant believe no ones said Fodera.

I'd call that progress.

 

[Brad Johnson]

Wow, you've gone to great lengths to disagree with me by paraphrasing exactly what I said in both of my posts in this thread:

The "worth" of any commodity is determined by the price the market will bear. Any producer of any commodity who overestimates what the market will bear will fail.

This is "Business School 101."

Your example about the re-branding of "luxury" Toyotas and Nissans is precisely the sort of thing I'm talking about. If consumers had walked into Lexus dealers when they first appeared, looked at the cars and said, "These are just Camrys," the merchandising experiment would have been an epic failure. But it was not, because Toyota correctly surmised that a large number of consumers would perceive enough value in a "luxury" Camry to pony up the extra cash. It's been a highly successful endeavor, because the consumer market has supported it. If people are buying your product in droves, then you've clearly done an excellent job of specifiying a price point that consumers believe is commensurate with the value of the product.

The fact that Toyota and Nissan use different marketing and pricing strategies in other parts of the world than they do in the US further reinforces my point. They have studied each market, figured out what it will bear, and priced their products accordingly.

How is this different for basses? Why would you bold my statement about the marketing of basses and disagree with it, and then give an example about autos that precisely proves my point?

When TBers express an opinion like, "I don't think Warwicks are worth what they're charging for them," they're not providing any sort of market analysis. They are simply saying, "Given my budget and my needs, I do not see sufficient value in Warwick products to spend my money on them." The mistake people make in these declarations is thinking that because they have this opinion they have thereby invalidated Warwick's business model.

Clearly this is nonsense. There are enough consumers of bass guitars on the planet who do see value in Warwick products commensurate with their pricing to keep that factory in Germany humming. This means that Warwick got the math right.

I agree that the perception of "luxury" sometimes is generated in the marketplace merely through pricing, but this can only be sustained up to a point. "Luxury goods" must meet certain minimal standards of quality because even in this niche market there is tremendous competition.

However, I would also posit that if Warwick's prices when they first hit the USA had been double what they were, that Warwick would have gotten the math wrong and their business plan would have been a failure.

So explain to me again what it is that you disagree with. Because your previous post is 100% in agreement with everything I've been saying, except for the part where you say you disagree.

Nothing quite like being in violent agreement, eh?

 

[vene-nemesis]

How does production price figure in selling price... other than it making sense not to sell below it? Production is not necessarily the only cost involved in putting an instrument out for sale.

In real life production costs mean everything.

 

[dj150888]

In real life production costs mean everything.

As much as that statement sounds intellectual and sensible, its really not true. Production costs only mean one thing - the absolute minimum price a product can be sold for. Not the maximum, or most sensible, just the minimum. Everything else is governed by various other factors.

 

[Brad Johnson]

In real life production costs mean everything.

No, they don't mean everything. That would mean advertising costs meant nothing for example. Advertising is a cost not related to the actual building of the instrument, rather the selling of it. Sales costs count too. If you have salespeople, think they don't figure into the ultimate sales price of an instrument?

People seem to either not know or forget this on a fairly regular basis. But businesses don't forget it... or they'll likely not be in business long.

 

[vene-nemesis]

No, they don't mean everything. That would mean advertising costs meant nothing for example. Advertising is a cost not related to the actual building of the instrument, rather the selling of it. Sales costs count too. If you have salespeople, think they don't figure into the ultimate sales price of an instrument?

People seem to either not know or forget this on a fairly regular basis. But businesses don't forget it... or they'll likely not be in business long.

Production costs still are the most important part of the whole fabricating business thing. IE: many brands outsource their production lines to save money on them, yet they still spend the same amount of money on on salespeople and marketing.

 

[Brad Johnson]

Production costs still are the most important part of the whole fabricating business thing. IE: many brands outsource their production lines to save money on them, yet they still spend the same amount of money on on salespeople and marketing.

Glad you understand that... now.

I disagreed with this statement by you: "In real life production costs mean everything".


Apparently so do you... now.

 

[vene-nemesis]

Glad you understand that... now.

I disagreed with this statement by you: "In real life production costs mean everything".


Apparently so do you... now.

No i dont, i still think production costs mean everything because they are the most important part of the whole fabricating business, regardless of the other costs that are also involved with it.

 

[Norwegian Bass]

Heheheheh.

 

[bstringkyle]

I think MIM are a tad overpriced now as well BUT I don't think they are supposed to be the entry level line. They are the mid-priced line and Squiers are the budget instruments.

I will get some argument here but I think Skylines are priced too high. Every other manufacturer getting lower priced basses from Cort are priced hundreds lower. An Indonesian bass (plek'd or not) that is the same price as a US Fender, Music Man or G&L is just too much.

+1

 

[48thStreetCustom]

Any bass made by Peavey. I bought one in the 80s when I was first starting out and it was a complete piece of doodoo. I swore that Peavey would never again get a dime of my money for the rest of my life. They could charge $10 and and it would still be overpriced

 

[Brad Johnson]

No i dont, i still think production costs mean everything because they are the most important part of the whole fabricating business, regardless of the other costs that are also involved with it.

The word "everything" means what to you?


Hint, if it means every thing, there is nothing else that matters. There is no "more important" or "less important", there's only that thing.

Production cost does not have to be the largest (or only ) factor in the pricing process. It could easily be that other factors drive the price up more than production cost. Business experience bears that out.

Let's see where this goes.

 

[Brad Johnson]

Any bass made by Peavey. I bought one in the 80s when I was first starting out and it was a complete piece of doodoo. I swore that Peavey would never again get a dime of my money for the rest of my life. They could charge $10 and and it would still be overpriced

A lot has changed since the 80's. Skinny ties and rolled up jacket sleeves are out... and Peavey has come a long way.

 

[Brad Johnson]

+1

If you look at Cort as building one type of bass at one price point, that might make sense. Since they don't, it doesn't.

Country of origin is not a price.

 

[vene-nemesis]

The word "everything" means what to you?


Hint, if it means every thing, there is nothing else that matters. There is no "more important" or "less important", there's only that thing.

Production cost does not have to be the largest (or only ) factor in the pricing process. It could easily be that other factors drive the price up more than production cost. Business experience bears that out.

Let's see where this goes.

And yes there are a few things wich prices are much more influenced by other factors, like the raw materials needed to produce them, IE: fine jewlery, but these are usually luxury items.

But anyway, most of whats being produced (wich is the key word here) on todays world is being priced mainly after its production costs. I agree that there are other costs involved, but in the very begining of a business a certain good is either manufactured or not depending on the marging of benefits the manufacturer will obtain against its protuction costs given an estimated demand for said good.

BTW, no ofense here, but you're a semantics nazi .