First you say this :
> A nice analysis, but it is not totally accurate.
Yet, then you wander hopelessly off into this:
>Because of technology, the new model uses far fewer components.
And what about labor costs, and other pieces of the "costs of goods" ?
There's much to do this that what you suggest ... much more!
>Therefore in 2002, the retail price is not totally based on what the radio
>cost to build, I think it is based upon what TT thinks they can get for it.
Note the "I think"
>The projected retail was originally $595. I suspect it costs them less
Note the "I suspect"
>than $200 to build each radio (in quantity). Then the target price went
>to $695 and now $795. Why? Because we all talked about it so much
Note the "Because we all talked"
>and told them we want it and can't wait to get it, ect. Under the law of
>Supply and Demand, they think that we will tolerate the price increases
>because the demand has increased. Had we all cried foul when the
Note the "Had we all cried foul"
>price kept going up, and did not put in the advanced orders, TT may have
>brought the price back down to reality.
... and how "totally accurate" is the above may I ask ???????
You have accurate and verifiable data to support all of the above ?
(or really Duffy, ... are you just whining about the price changing ?)
How do your define "back down to reality" ? Whose ? Yours ? Theirs ?
Gee, like what if TT faced a reality of a increase in the raw parts from
one or more of their suppliers, and their business plan required that a
price adjustment must be made ? Should a firm stop the project ?
Or offer the product as planned, yes with a higher price to meet the
needs of the business plan, knowing that the higher price may generate
some temporary tension ?
Your flawed logic also would state that to lower the price of the yet to
be released Orion ... IF "we all cried foul" about the targeted $3300
price point ... then magically it will come down "to reality" !
Yea ... right ... when the last time you wrote a business plan with that
as a predicted and controlled variable in it ?
>Another example. ... <SNIP> "I told him and he gave me a range
>of $1,100 to $1,400. The retail price is not directly related to the cost
>of manufacturing, but is more directly related to demand and what the
>marketplace will tolerate.
Really ? ... so based on what you are saying, just because of what the
market specs as to acceptable pricing ... in this case a data point of 1,
then the costs of manufacturing can not be used to set the price points ?
Even if the new rig has a true manufacturing cost of say $ 1600 ? ALL
of the variables must be taken into consideration. And in some cases, the
choice is to not offer the proposed product, as it would be unprofitable.
All you stated was a range which you were willing to pay ... No more,
no less. What's your real world experience with products and pricing ?
Try your advice this afternoon ... first go to your local building supply
outlet ... complain (Read: "cry foul") about the price of plywood.
Next go to your local grocery store ... choose any product you will and
then stand up front and loudly "cry foul" ...
Report back here with your results. We can't wait to hear them !
Very 73
Billy AA4NU
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