Originally posted by bxf I suppose this is going OT, but anyway..
Some decades ago, when I migrated from Canada to Australia, I saw that the Mazda RX7, which had a US retail price of about $15K, was about $50K in OZ. At that time, the Australian Dollar was higher than the Canadian Dollar. and, if I'm not mistaken, higher than the US Dollar as well.
Local dealers were telling me that it's import duties, taxes, etc, but simple math said otherwise. I concluded that distributors set prices according to:
1. Limited size markets (i.e. smaller populations).
2. Limited competition in any given class of product.
3. Limited public awareness. The US market, in the past at least, was very sensitive to prices higher than necessary (I'm not so sure this is quite as true today). In many cases. Australians were actually unaware that they were being ripped off.
The above are not meant to imply that I believe myself to have any special knowledge of marketing strategies. They are merely guesses based on observations.
Or that people see as a acceptably price are that set the price. As you say US market are very sensitive, so they have lower prices.
I was check prices in EU and USA for some year ago, and for Pentax and Canikon prices was around 30-50% higher in EU. But Sigma lenses had the same price!!
Walmart have 1$ articles and i heard that Kines companies sometimes sell to Walmart with loss to get in to the market.
I was buying a motorcycle in -85 and pay 50.000SEK for it. In an vacation i Germany i see that it cost perhaps 35.000SEK there.
The answer came some year later, custom taxes was high in Denmark on motor vehicle and they were very progressive. So the price was much higher to Sweden and probably Norway and Finland. So the Japan company's was selling for perhaps 15.000 for this bike to Denmark and to that price the tax was acceptable, perhaps 30-40.000, so the end price to customer could be 60.000 (a import price of 25.000 had make a tax of 50-70.000). Conclusion, acceptable price in both country and they sell more bikes. But we have free prices in most country, there i live bread are more expensive than pork...