Sony says non-discounted goods make life easier for you
By Darren Murph 
posted Nov 21st 2008 2:16PM
posted Nov 21st 2008 2:16PM
Oh Sony, will you ever learn? After kvetching during the holiday season two years ago about how rampant price drops were wrecking the industry, the still-insane Jay Vandenbree, president of consumer sales for Sony Electronics, has opened his mouth once again this year. Why? To say that by "having the price for these products [HDTVs, for one] be the same at all retailers, Sony had eliminated stress for buyers." In case you weren't aware, Sony has forbid retailers from discounting select high-end HDTVs and cameras, but it's doing so for you, the buyer (honest!). In fact, he stated that because of Sony's heartwarming efforts, "consumers don't have to worry about whether [they] can get a better deal at retailer A or retailer B, and everybody gets the best deal." Hey, Mr. Vandenbree -- define "everybody" for us, would you?
Wow, I should be used to Sony's arrogance by now, but, for some reason, I'm not.
I just don't get them. If their products were significantly better than the competition it would be one thing, but there are several more than competitive alternatives in the market place.
yea that's the problem, artificially low prices caused in part by theft of IP or counterfeit products, or products produced in slave states like China hurt the market in terms of high-end components because mainstream manufacturers are forced to lower the quality of their items in order to compete on price.
so what he is saying makes sense when you think about the big picture and the industry as a whole, but i do have to admit at first it does sound rather insane.
but i do have to admit it does sound rather insane.
*fixed
These execs should learn to keep their stupid mouths shut if they're not capable of saying something sensible.
They have lost their minds & believe their own propaganda.
There's nothing more ridiculous than listening to them howling at the moon with their BS about the great prospects for their products (the very definition of the emepheral & non-essential) as the global economy dives.
It's tragic, it's pathetic.....but it is sort of funny too.
What's really amazing is this story was posted by Darren Murph. Usually it's Toshiba he hates...
Hey Warner, how d'ya feel about backing Sony's train-wreck now?
(That applies both to the movie division, and to Warner's loyal employees at Engadget, who promote the company line here at this AOL Time Warner news aggregator.)
Man, these past two day Sony is not doing to well in the public eye.
Block retailers from giving discounts?? Who says we don't like hunting for better deal. WTF are you thinking sony??
Mr. Vandenbree comments shows what a low opinion Sony has with respect to the intelligence level of its prospective customers. However, I must admit that they have indeed made my shopping experience simjpler, I have just crossed Sony off my list.
Yawn....Apple has been doing this for years and nobody seems to be making a big deal out of that. Granted, Apple's products have a much smaller "anti-Apple" movement than Sony so there's less noise, but are iPod's really worth the premium they have tacked on to them?
Yeah, this exec probably needed to shut his mouth, but all companies have a strategy for making sure people can't do too much "shopping around". Most of them just make the same product with lots of different model numbers depending on the store they're going to. That way you can't even compare prices.
Tell me when Sony gives students a deal like Apple does when buying a computer, 100$ Printer plus a $200 IPod Touch.
Why woulda STUDENT buy a VIAO anyways???
they arent geared toward students........I damn sure would rather get an HP or Mac than a Sony
drphil7,
http://www.sonystyle.com/webapp/wcs/stores/servlet/CategoryDisplay?catalogId=10551&storeId=10151&langId=-1&identifier=epp_SonyStyle_Campus
Sorry there's no ipod tossed in for students but, really now, why would there be?
this is hilarious........but Sony isnt the only ones that do this......at least they said on HIGHER end products......so if you have money for that $7,000+ 70"+ XBR LCD then you dont much care where you go anyways do you??
idiot = Fail
I agree with him -- I don't benefit from "shopping around". I'd rather spend my time comparing price/quality of Sony versus other companies' products. If Sony's don't stack up, I'll buy the other product. If Sony's "best" price isn't that good, well, no sale.
You know, I think I do too. I usually shop using specs and reviews first, then I compare prices and weigh my options. If I have to worry about which place has the best price and then worry about if that same place is a reputable retailer, it just compounds the confusion. Really, all we're talking about is that Sony is trying to control the margins for retailers, right? If they really think they have the power to do that, then more power to them I guess. If that "universal" price isn't good, then I don't have to look at other retailers...I just move on to the next manufacturer. It's not like I'm forced to buy their more expensive products. Why get mad about this?
Fixing retail prices is a violation of U.S. antitrust laws. Retailers are free to sell products for any price they want to sell them for. The FTC brought charges against New Balance (shoe company) a few years ago for this exact thing. Threatening to stop supplying stores that under-cut the MSRP, etc.
This is only true to a small extent.
Denon and other higher end products are only sold through certain "authorized" retailers. If a consumer purchases from an "unauthorized" retailer then the consumer does not get a warranty.
Even something mostly crappy like Bose has this sort of arrangement. They tell retailers when and how much a product can be sold for.
If you click through to the article, you'll find this:
For nearly a century, antitrust law essentially banned manufacturers from telling retailers what prices to charge for their goods. But last year, the Supreme Court overturned that doctrine and said a court must consider the facts of each case to determine if a particular price policy is illegal.
Price fixing is an agreement between business COMPETITORS not for a single company. Anti-trust is when two or more companies get together and set prices so market forces can no longer work. This is not an example of either.
I'm not a fan of anti-trust law, which basically says that two non-violent and non-fraudulent entities can't do business on mutually agreeable terms; that is that the government will FORCE one of those entities to do business on terms it would walk away from if it had a choice.
Most anti-trust law was written out of economic ignorance (Standard Oil actually lowered prices for consumers and benefited the economy) and destructive populist yahoo-ism. And it was upheld by the courts despite strict limits on the federal government's authority set by the Constitution.
I'll admit, though, that I wasn't happy about the XM - Sirius merger (especially when Dish Network and DirecTV were forbidden to merge).
All retailers have to do is offer an "instant" rebate or some kind of gift card with a Sony purchase and viola! Less than MSRP, but still "selling" for MSRP.
This is great news!
Now I only have to compare Sony's prices to other brands at one store before concluding that I can get a better deal on someone else's TV. Thanks, guys!
As a very recent victim of retail failure, I hope I can give you an insight into what Sony is talking about. Price erosion and margin erosion is a major reason why better retailers are going out of business. Flat screens went from making good sustainable margins to making very much unsustainable margins. As those margins fell faster than manufacturing costs the quality of the product falls to regain some of those profits, and then people bitch that their jobs went to China, Mexico, Taiwan, etc... The products Sony is talking about are their premium goods, ES, XBR 8 series, etc... those goods are limited distribution anyway(not at big box stores), and are not designed or marketed for mass consumption(ie deeper pocket purchasers) . Like it or not almost all reputable brands seek to control price one way or the other, and no it is not illegal(Bose has done it for more than 20 years), essentially you can either sell it at agreed upon prices or not at all if you want the manufacturer to back the warranty. There are some legal loopholes that manufacturers exploit to keep it legal. Where I worked had several brands that set the selling price or limit the kind of discounts the reseller can provide(or advertise). I know a lot of you disagree with this, but keep in mind I am not endorsing or disparaging policies like these, I am simply trying to provide some insight to people who have never worked in the CE industry. Pricing policies like Sony's are incredibly common across all segments of CE, appliances, etc... So next time you bitch about the price of a piece of gear, keep in mind two things 1. If you think it is two expensive than they probably were not trying to sell it to you, 2. Said company has every right to charge what ever they want on their product as long as it is not a necessity for life(if someone pays a price for something than that is what is worth to them, also smaller companies may not have the benefit of economies of scale to lower costs, so they make up for lower volume with higher margin, yes I know this last part does not apply to Sony it is just a gripe of mine.
tldr
Ben, come on, be serious.
It's ludicrous to see a corp like Sony wheel out the 'quality service costs' line.
What extra quality and service are they supposed to be offering anyways?
Do they think we all have amnesia? Or maybe we're all blind....and/or just stupid?
They (the major CE corps in enthusiastic cooperation with all the major retail outlets) are all responsible for the current business practices - and they have been at them for decades.
That's why most large high streets have stores staffed by fast turn-over kids who know little beyond the description card already posted by the products
(isn't it hilarious when you ask a simple question about a product and they start quoting the little card back at you, like you didn't just read it yourself? Not.).
It's also why most high streets long ago lost almost all the little independent guys who had been there for years and who knew their stuff through and through.
It's a joke for Sony to start whining about the perfectly foreseeable end results of the kind of sales strategies they have pursued (in cooperation with the major outlets) for years.
F**king hypocrites.
(does anyone honestly believe that paying the large premium demanded at a Sony store equates to a genuine premium service?!)
Ben is correct. There really isn't anything all that unusual about high end manufacturers setting minimum retail prices to protect their brands. I'm pretty sure Apple does this (Amazon only gives a 5 or 6 dollar discount on a 1600 dollar Macbook for example) as do high end cooking brands like All-Clad and kitchen appliance companies like Dyson.
And if you don't like the price, you are likely not the product's target market in the first place. Its not like anybody can force you to buy this stuff. If deep discounting is that important to you then buy another company's product instead. There are plenty of other choices out there. But don;t assume that just because you are always looking for the cheapest price that this is the primary factor in other people's purchasing decisions. I know a woman who runs an expensive women's gift shop. She told me when a product isn't selling she actually RAISES prices and then it sells better. Go figure. But clearly there are other factors at work in retailing aside from the "low, low prices everyday" mantra of big box stores.
Many products have such brand cache and are in such demand that people don;t care about discounting and they sell well because the market will bear it. Retailers don't have some "right" to sell a manufacturers product at a discount either. If they don't like the manufacturer's rules they can choose to carry another manufacturer's product. If enough retailers stop carrying the products and enough consumers stop buying them the manufacturers will be forced to adjust their policies and market will fix itself.
I'm not sure I see the problem here.
@ minimalist
You seem to be working under the delusion tha Sony is a "high-end" brand.
Come on, you were kidding, right? That's the funniest thing I've read all day.
@multiformatmayhem
Think what you want about Sony. I could care less. But the fact of the matter is that ES products are not cheap. I have no real interest in Sony's high end gear but they still have a right to price their products as they see fit.
The bottom line is this: If the Sony ES line turns a good profit they don't have to care about what some poster on some tech forum thinks about their retail strategy or their quality. If it works it works. The rest of these arguments are irrelevant.
Where does the "S" in MSRP stand for?
I really don't understand why North Americans still accept this? AFAIK, it's the only country in the world where price setting, market manupulation, monopoly-misuse, etc, etc is still sort of silently accepted by the consumer/government.
If this guy (his last name appearently originating in Europe) would have said this in Europe, then Nelie Kroes of the European Commission would have corrected him and fined him all over the place, like the Commission did in the past with many other violators (to protect free-trade, fair competition and ultimately, the consumer).
When will somebody finally stand-up and file a suit? Or, is everybody afraid to be too small to afford better lawyers then the more powerfull company and will loose because of that anyway? Appearently: power=money=better lawyers=more power=more money=etc...
Just my $0.01 (economics can't afford me the $0.02 anymore)
When will somebody finally stand-up and file a suit?
Oh trust me. Americans love to file suits :-) There are more than enough of them to go around.
But what exactly would the suit be filed over in this case? Dictating to retailers a minimum price they can sell your products for is not a crime as far as I know (nor is it as restriction on free trade). The retailers are free to buy or not to buy and the manufacturers are free to sell or not to sell. There is no constitutional right that guarantees the ability to buy wholesale and resell a company's products with no strings attached.
There are always strings attached and there are always going to be power struggles. Wal-Mart has purchasing power and gets to dictate terms to manufacturers and Apple has brand power and gets to dictate selling conditions to retailers. This is all just part of the push and pull of the free market and unless there is a monopoly situation or one retailer is being treated differently than another there is no reason for the government to get involved.
Unless all the CE companies got together and fixed all their prices at the same time there will always be cheaper alternatives. And is what the free market is all about. A single company setting minimum prices for their products is not a violation of anti-trust laws.
@ben:
I completely disagree with you, from a principles point of view.
It's not the 'better' retailer that is going out of busines. Business=business. If your product has declining margins (product lifecycle), act quickly and sell that business (IBM saw this coming on their hardware devisions and sold most of them). If production moves to the east for cost-cutting reasons, move with them, so compete or loose. If an entrepreneur is going out of business, it is always somebody else's fault...
If a company can not decide for themselves what price they charge, or seperate companies make other price-arrangements, this is illegal around (most of) the world. Now in NA, where the Supreme Court made their decision, it suddenly becomes much more complicated to balance the consumer rights to the (usualy, short term) 'benefits' of the price-setter.
I know that companies go bankrupt and people will have to look for another job (e.g. with the company that bought their assets), but that is healthy competition and the way the economy should work. In the long run, I am convinced that this price-setting is not the best solution and in this case I presume no judge would prevail Sony's standpoint above fair-competition regulations; well, I wouldn't :-)
Like usual, Sony should have just shut the f*** up. Did they really need to say anything?
Just when I think Sony couldn't be more arrogant, they say something like this.
F*** Sony!