Originally posted by Philoslothical The point is, they're not new prices. This measure is just about preventing the U.S. from trying to undercut the established value of the products in the rest of the world. You're completely entitled to feel that Pentax warranties are too short, or any other criticism you may have for them, but I think it would be more effective to protest those as a separate issue.
Yes, they are new prices. He's playing semantic games. A manufacturer can set MSRP at any level they like. What counts is how many hard-earned dollars (euros, etc.) the customer must part with to buy the product.
When PopPhoto reviews a lens or camera, they never quote MSRP. They always show the "street" price, because that's the only number that counts. To the customer that IS the price.
Personally, I don't understand this strategy. If the wholesale price has not increased, why should Pentax really care what the retail price is? If the retailer wants to accept a smaller margin, then so be it.
Setting prices is a complicated process. Not only must one consider the cost of manufacturing and distribution, but many other factors. In business school, they have entire classes on how to set prices to maximize profit. If you set the price too low, you'll sell a lot, but margins (and thus total profit) will be small. Set them too high and margins are great, but you will sell less product and may make less total profit than if you sold at a lower price. That is the tricky balance that they must strike.
If, by forcing retailers to double their per-unit profit, it cuts into sales by 60 percent, the retailer makes less total profit and Pentax makes a LOT less. If sales drop by less than 50 percent, then the retailer makes more. Only the customer gets screwed.
If Ned had said that, now that Pentax is no longer owned by Hoya, they had to pay a lot more to Hoya for lens blanks, or if he said that the dollar to yen exchange rate was unfavorable, I could understand it. But if wholesale prices don't go up, and sales go down, I don't see how Pentax benefits from this.
Many customers like to "shop around" to get the best price on items they buy. To me, this is a sound practice, but Pentax has just made it impossible. If all retailers MUST sell at MSRP, then shopping around is pointless.