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[TenTec] Re: 516 Price in Perspective

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Subject: [TenTec] Re: 516 Price in Perspective
From: duffyb01@fuse.net (duffyb01@fuse.net)
Date: Wed, 29 May 2002 16:03:04 -0400
Art, some good points.  Billy, I'm not sure what you are getting at.

Productivity has everything to do with keeping prices down when faced with an 
increase in wages.  My point on productivity is that the greater the ability of 
the manufacturer to increase productivity, the lower the price of the product 
provided that demand and the price of raw materials stays equal.

With amateur radio transceivers today versus yesterday, the amount of parts 
used are fewer, thus the cost to manufacturer is lower, and more of the 
production is automated which also reduces the cost to manufacturer. R&D costs 
are assumed to be the same percentage of sales as 30 years ago, and may even be 
less today.   

The retail price of TT's radios 30 years ago had to support a model that used 
retailers as the prime method of distribution.  Now TT uses a direct model so 
more of the profit is retained by TT.  I am all for profit and the more they 
make the better.

So what is the debate all about - price of the radio. Yes, Billy, I am whining 
about two price increases before the radio even hit the street.  I think the 
price is too high (yes, my reality - not yours).  

My response was to the post about the price of the radio being less than the 
rate of inflation.  I just disagree with using the price of previous Argonauts, 
adjusted for inflation, as the basis for justifying the price of the 516.  The 
reality in electronics pricing over the last 30 years would indicate that the 
price should be even lower than what it is today.  I believe the original $595 
may have been the right price, but a perceived high demand for their product 
may have led them to believe they priced it too low - thus the two increases.

Billy, my statements were made from my observations and my experience with 
pricing the products and services I offer for sale.

I think TT had a real opportunity to use a new product, at an attractive price 
point to attract NEW, never before TT buyers, to buy their products and become 
hooked - then move them up the ladder to their other radios.  At $795 they have 
the radio at a price point that is no longer attractive and puts it, in many 
cases, at a price point that is higher than many of the low end rice boxes (of 
course we can argue the features of each and every product compared to the 
516).  I think the definition is missed opportunity.

I already think highly of many of TT's radios and have owned three - A Paragon 
II, Omni VI, and the Jupiter.  But most hams are unlike TT fanatics and are 
simply going to compare price and basic features and turn away from the 516.

Oh, Billy, if everyone stopped buying plywood tomorrow, the price would come 
down.  No one individual can do it alone as I am sure you know (at least I hope 
you know) from the rhetorical questions you asked.  Why else do you think the 
price of plywood increases so dramatically every time a major hurricane 
threatens the United States?  Plywood did not get more expensive to 
manufacture, it's just that more people wanted it.






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