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Squier Models Disappearing ??

#101
JACink said:
So according to your perfect business plan, Fender would have been much better to have not had the Squiers available, which means they would have sold a minimum of 13 instruments less just to a small group of people that I know in a no name Spanish town?
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There is no perfect business plan, as you know. A better business plan than the one they're currently following would be to not flood the market with a huge range of low-profit $300 "budget" instruments wearing a budget name brand that compare too favorably in quality to your $1200 higher-profit marquee name brand, thus cannibalizing sales of your more profitable instruments and hurting your marquee brand reputation in the process.
 
#102
RedHotFuzz said:
I agree with this entirely, in theory. BUT in reality...what seems to be happening (based on what I read on this forum) is lil' Johnny learns to play the bass, grows up, gets a good-paying job (or great gigs), and becomes active in a great online forum where he loves to talk about gear. But despite now being an adult with some disposable income to spend, instead of going upmarket with, say, an MIA P-Bass for $1,200, he instead prefers the $300 Squire Vintage Modified, because hey, it's just as good as the MIA but a quarter of the price! I mean, who wants or needs an "extra 10% of quality for a 70% price increase" per ninjaaron's previous post?

You can see how this could be a very bad thing for Fender.

The computer electronics business has played out in a similar manner over time. Companies like Dell and HP thought it a good idea to build market share/brand share by constantly cutting the price of their consumer-level products to the bone. Result: those new price points became the new expectation. No one wanted to spend $2,000 on an HP computer when they could get an HP computer for $600.

You'll note the most financially successful computer electronics business in the world (Apple) avoided this dead-end trap entirely by never jumping into the shallow end of the pool. You want an Apple? Great. You will pay a premium for it. You want a cheap computer/phone? Go talk to Dell or Samsung.

$300 Squires that are "comparable" to $1,200 Fenders only kill Fender's brand and business. Squier cannibalizes Fender sales. And that's not good when Squier are much-lower-profit products.
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The fact that there ARE people spending that much money on MIA Fenders is also shocking. If this was right, then Fender would do something to entice more people to buy the MIA line.

It's funny that the Artist series are somewhat doing better than their Am. Std. lines...if not by more. I've seen more Geddy Lees, Mike Dirnts, Eric Claptons, or Marcus Millers fly off the walls faster than the brand new 2014 American Fenders.
 
#103
ninjaaron said:
^ Won't work. Most people will shop elsewhere, rather than be "pushed upmarket."

The people who want MIA are those who want that extra 10% of quality for a 70% price increase, or those who believe buying local is better (for ethical/economic reasons). People who have $400 to spend on a bass are not going to spend $1000. That's not a thing.
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I bolded, underlined, and italicized this sentence because it rings true so much. My goodness. Couldn't have said it better myself.

I admit, I DO want an MIA Fender bass of top quality. I've been always GASing for one for a long time and the other basses I've bought and sold ended up not satisfying my hunger for unnecessarily-expensive basses. I doubt getting a brand new MIA Fender off the shelf will kill the GAS, but it'll make it dormant for a long long time.

And it's not just Squiers, either. Their MIM line is very very good nowadays and it is a very attractive option for those who want a Fender but doesn't want to pay $1200 and those who for some reason hate the name "Squier" on their headstock. 500-700 for a Fender MIM that's almost just as good as an MIA Fender that costs $1200?
 
#104
MovingPitchers said:
The fact that there ARE people spending that much money on MIA Fenders is also shocking.
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Well, adjusted for inflation the MIA Fenders are close to being inline with what they've cost since the very beginning. Fender has now set this dangerous perception that a "good" bass in the year 2014 need only cost $300, just like Dell and HP convinced (to their own detriment) consumers that a good computer need only cost $500. Congrats, your successful sales pitch just screwed your business model. :(
 
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#105
RedHotFuzz said:
Well, adjusted for inflation the MIA Fenders are close to being inline with what they've cost since the very beginning. Fender has now set this dangerous perception that a "good" bass in the year 2014 need only cost $300, just like Dell and HP convinced (to their own detriment) consumers that a good computer need only cost $500. Congrats, your successful sales pitch just screwed your business model. :(
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Wasn't it like a few years ago, that Squiers, in general, were absolute crap and it wasn't giving Fender much sales in comparison to the actual Fender models, hence their investment into improving the Affinities, VMs, CVs, and such? Well it worked, for sure; Squiers are receiving for sales and more positive reviews than, say, 2007 or 2008, but it also came at a cost where people are now buying less Fenders and more Squiers.

I just saw three Squiers, one standard Strat, two basses, fly off the shelves at one of my local music stores two weeks before Christmas. I saw no Fenders being sold whenever I visit my music stores.
 
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#108
grrg63 said:
If Fender doesnt exploit the obvious demand for good $300 instruments someone else sure as hell will. You really think offering customers (specifically musicians) less selection, less options and higher prices is a good business plan?
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Look at Fender's balance sheet and tell me how what they're doing now is working for them.
 
#111
None of the bad moves they made in regard to the stock market 2 years ago had anything to do with Squiers popularity amongst musicians. The market for guitars has shrunk due to changing popular culture and technological evolution. I bet Fender still owns the lions share of the market that does exist. If anything the availability of more affordable instruments has probably kept it from shrinking furthur. A 2 year old article isnt exactly a current balance sheet is it?
 
#112
RedHotFuzz said:
There is no perfect business plan, as you know. A better business plan than the one they're currently following would be to not flood the market with a huge range of low-profit $300 "budget" instruments wearing a budget name brand that compare too favorably in quality to your $1200 higher-profit marquee name brand, thus cannibalizing sales of your more profitable instruments and hurting your marquee brand reputation in the process.
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grrg63 said:
If Fender doesnt exploit the obvious demand for good $300 instruments someone else sure as hell will. You really think offering customers (specifically musicians) less selection, less options and higher prices is a good business plan?
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That's the rub of it (to get back to the topic the OP wasn't talking about...). It may be a damned-if-you-do/damned-if-you-don't scenario, but I don't see what else Fender/Squier is realistically supposed to do. What, deliberately make your cheaper models lower quality than they could be? That doesn't lead to more $1300 MIA's sold, that just leads more starting-out musicians with a $300 budget buying Ibanez and Yamaha and Schecter and whatever. And if they become fond of those other brands' entry-level instruments (and some of them are very good), then when they have more money to spend they might be thinking about a higher model from that brand rather than getting a Fender of any kind.

Despite how we TBers talk about it, I don't think people walk into a store saying, "I want a P bass, the question is do I want to spend $1300 or $300 on it?" Most people walk into a store saying, "I've got $300 (or $1300) to spend, what's the best instrument I can get for that money?" There's some competition between $380 CV Squiers and $600 MIM Fenders, sure. Someone goes in with $500 in the bank and they're asking if it's worth it to go over budget or if they'd rather take the Squier and have some money left over. But I seriously doubt that's what's breaking Fender's bank.
 
#113
RedHotFuzz said:
It's pretty well-known they're not in a good state financially.

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And the companies that only offer more expensive options are in better shape?

In every market, the current situation is the same. Samsung have had to come up with cheaper TVs and cell phones, because for every note4 that sells, 100 people buy a cheaper phone. That is the main reason that apple has lost so many clients, because the competition offer more for less.

Ford have numerous small and cheap cars (at least here in Europe) to not lose 90% of sales to companies like Hyundai etc. etc.

However, you are convinced, so there is no point in arguing with you, be happy and spend your money how you feel. If I have 2000€ to spend, there is no way it is all going to fender, but if they keep up the quality of Squier, they have a good chance of getting part of that 2000€.

I'm off to celebrate New Year, and tonight I will be playing a Squier!

Have a great New Year everyone!
 
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#114
hrodbert696 said:
That's the rub of it (to get back to the topic the OP wasn't talking about...). It may be a damned-if-you-do/damned-if-you-don't scenario, but I don't see what else Fender/Squier is realistically supposed to do. What, deliberately make your cheaper models lower quality than they could be?
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No, but they could drastically reduce the number of Squier models. They're priced at the entry level, so why do they offer such a wide range of products? Cut back on the Squier offerings. Make Squier the brand you start out on but Fender the brand you strive to attain. You know, like it used to be. Seems today too many people are saying the CV or VM lines are so great, why pay more for a Fender? That's a business-killer for Fender in the long run.

JACink said:
That is the main reason that apple has lost so many clients, because the competition offer more for less.
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Not sure why you think Apple is bleeding to competitors, since they are the most profitable (by far) tech company in the world. Perhaps this is partially due to the fact they choose not to cater to low-budget customers who offer low-margin (or no-margin) profits.

JACink said:
However, you are convinced, so there is no point in arguing with you, be happy and spend your money how you feel.
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I am not arguing what one should or should not purchase whatsoever. Personally I'm not buying either Fender or Squier as neither offer a contoured-body medium scale bass (though I do own an AmStd Strat and a Rumble 100 amp). I'm simply arguing that Fender would be wise to cut down on its range of budget-priced Squier products to increase profitability and retain their brand image, and this very well may be what they're doing (see OP: "Squier Models Disappearing ??). A too-good $300 Squier is not a good thing for Fender.
 
#115
Soooo....

I just tried to take a look at Squire's site, and nothing's working.

Think they're putting up new models to replace the disappearing ones?

Edit - maybe it's my computer? All I get is a white page here: Invalid Link Removed
(false alarm - working a few hours later)
 
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#116
Nah, it's all there now. Same as before AFIK.

Bottom line is every post in this thread is speculation. Fender has never released sales info to the public, so we do not know how many of what has been sold, nor do we know their margins on any models. I'll go out on limb here and suggest that Fender has one or two well-paid analysts who work these things out to maximize profits.

Or maybe they monitor TB for their business planning. That would be more likely to explain their finacial woes. ;)
 
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#120
RedHotFuzz said:
Not sure why you think comparable margins between Squier and Fender are a win for Fender.

Better to make 20% margin on a $1000 Fender than 20% on a $300 Squier, as hdracer rightly pointed out.

I think the huge range of Squier products is ultimately a very bad thing for Fender's bottom line.
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I think with Squier and Fender lines they are making money two ways.

1) High volume, lower profit per unit
2) Lower volume, higher profit per unit

The key is to strike a balance that makes you the most money--it's an optimization problem. Simply focusing on #2 is going to make you miss out on a lot of potential profits from #1.

I don't think they would be smart to get rid of the 300 dollar basses especially in light of their financial problems. However I do agree their CV line is probably cannibalizing some of their sales, mostly in the MIM and higher-end Fender Chinese models.
 
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