So we've all noticed how in many geographical areas the Pentax lens prices have received serious price hikes. It has been speculated whether this is due to the currency exchange rates or if Pentax is trying to present a more expensive, higher profile facade.

Has anybody had a look at what are other brands doing then? Players like C & N, have their prices risen similarily?

[Michaelina2]

Now... if you were Pentax (or another brand) and people were willing to pay more for your stuff, what would you do? Raise, or lower your price?

Cheers...

[jerrymouse]

So we've all noticed how in many geographical areas the Pentax lens prices have received serious price hikes. It has been speculated whether this is due to the currency exchange rates or if Pentax is trying to present a more expensive, higher profile facade.

Has anybody had a look at what are other brands doing then? Players like C & N, have their prices risen similarily?

They did (at least in the Czech Republic). Like 2-3 months before Pentax did.

[MPrince]

It can get pretty complicated, but it's likely a combination of supply/demand, currency exchange rates, and inflation. Inflation being the most pernicious of the three. Governments want you to believe inflation occurs because of price increases but that's not true. Inflation occurs when governments print money to satisfy their spending hunger without directly bilking taxpayers. Pumping up the money supply reduces the value of the money in your wallet. This loss of purchasing power is perceived as a price increase.

Now... if you were Pentax (or another brand) and people were willing to pay more for your stuff, what would you do? Raise, or lower your price?

Yes, but are people really willing to pay that much more? I personally have been thinking about getting 1-3 limited primes or * zooms, but after the price hikes I'm on the hold. And as I don't really have much high quality K mount glass yet, I'm quite open to considering other brands in the long run. Today Pentax doesn't seem to give as good a bang-for-buck ratio as, say, a year ago.

[Michaelina2]

Yes, but are people really willing to pay that much more? ....Today Pentax doesn't seem to give as good a bang-for-buck ratio as, say, a year ago.

Yes, people are willing to pay that much more. And until they decide enough is enough (like you), the price will continue to rise. So, speaking for the rest of us (if I may ), I applaud your decision NOT to buy as it keeps the price still within reach (perhaps).

Also, keep in mind, even if you bought your photo-stuff last year, it will be worth less today. As to year to year comparisons... so what? Photography equipment is NOT an investment. Equipment is a tool (like a golf club) you use to play the "photography game." If you are new to the game and wish to be a player, you need to be a pay-er.

Another poster says price increases are complex. I disagree. The first lesson you learn in Economics 101 (and life) is that the selling price has nothing to do with cost. In a competitive environment, selling prices are determined by purchasers NOT sellers.

If the K-7 is as successful, expect to see the demand for accessory stuff (lenses, etc.) to increase along with prices. If its a dud, or confusing, prices will fall.

Cheers...

[eyou]

pentax stated with lens price hikes that it was due to the currency exchange between the yen and whatever country being so unfavorable for them. Hopefully the prices will come down when the economy and exchange rate equalizes (which it seems to be doing). note that there was a few months lag between failing economy and the price hike, so maybe there will be another lag after the economy recovers.

however, airliners started charging extra last year because gas prices were so high, but when they plummeted, there was no relief. soooooo...... hopefully pentax will stay true to its word and decrease prices when it is right, and not play the same game as the airline companies (basically making their profit margins higher and keeping the same price)

i've been holding off on buying any new lenses for a few months (also saving up for k-7 or 'k300d' after prices fall a bit)

[Michaelina2]

Pentax stated with lens price hikes that it was due to the currency exchange between the yen and ...

Sounds pretty rational, but...

If Pentax is like most other product 'builders', they bundle all of their costs (R&D, production, marketing, salaries, commissions, distribution, etc), estimate demand in terms of units, estimate the market price and develop a marketing plan designed to get that price, set sales targets, and sell to their break even point. Every unit sold beyond the break-even point is 100% profit. For example, if the break-even point for a 1000 unit production run is 500 units and they sell out, every unit sold over unit number 500 is pure profit. If all sales targets are met, they could price every unit over 500 free and still have their annual Christmas party.

As such, cost does not determine price. The notion of 'profit per unit' is interesting, but that's not how they look at things. Demand determines price. That's why a good marketing plan with all cylinders firing (rumors of exciting products in the R&D pipeline, consumer excitement, the expectation of something special, etc.) is key. Of course, excellent execution that meets expectations is critical. It's hard to recover from a dud. Anyway, something familiar is going on here... eh?

Cheers...

[asdf]

Sounds pretty rational, but...

CAD was down around 30% vs. JPY at some point (vs. its peak). I don't see how your comment contradicts the logic of raising prices when a specific currency tanks. If you're in the business of selling gold in Zimbabwe in exchange for Zimbabwe dollars, you want to raise prices every day.

This is really getting ridiculous with these price hikes. The last weeks I've been pondering whether to get a DA 15mm or not, second thoughts mainly due to the price level and performance issues. The cheapest (to me) well known source had it at 615 euros and that felt a bit steep. Today I noticed that the same shop has the lens at 726 euros - just overnight! Geez! Well, there are some (to me) less known shops that still have it around 650, but even 615 -> 650 is a significant rise.

As much as I'd like to have a good AF ultra wide lens from Pentax, I'm really getting fed up with the prices and constant price hikes.

I suspect my next photography purchase will be an Olympus E-P1 with the 17mm lens and not anything from Pentax. Naturally the camera and lens will be quite different beasts compared to the Pentax lens and their use will be different, but probably lots of fun though. Apples and oranges, I know. But if apples have ridiculous prices, I'll be happy eating oranges.

[MPrince]

Every unit sold beyond the break-even point is 100% profit.

Sorry, that is not correct. There are two types of costs: fixed costs and variable costs. (That is an over-simplification, but as a model will suffice). Once your sales volume has reached the point where your fixed costs have been covered, each additional sale will still have variable costs associated with the sale--100% profit on a sale is not achievable.

As such, cost does not determine price. The notion of 'profit per unit' is interesting, but that's not how they look at things. Demand determines price.

Again, sorry, not correct. The initial price for a new product is based on a number of factors, including cost, desired profit margin, anticipated demand, and capacity to meet demand.

Once on the market, price will be determined by supply AND demand, not demand alone. Stated more accurately, in a free market*, price is the mechanism by which supply and demand are kept in balance. When supply exceeds demand, price will drop. When demand exceeds supply, price will increase. The price increase generates additional profit enabling the product maker to increase supply by increasing capacity to meet the demand.


*Free of government interference and free of efforts to manipulate the market, neither of which ever happens in the real world.