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Roland and Korg fined for price fixing.

 
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chelsea4023
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Joined: 06 Apr 2016
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Location: West London, U.K.

PostPosted: Tue Jun 30, 2020 10:46 am    Post subject: Roland and Korg fined for price fixing. Reply with quote

I am reading in the U.K. press that Roland have been fined £4 million and Korg £1-5 million for price fixing.
I've been buying keyboards for nearly fourty years and the two times when I'm pretty sure it's happened with me were when buying Yamaha keyboards.
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Jan1
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PostPosted: Tue Jun 30, 2020 12:05 pm    Post subject: Reply with quote

https://www.gov.uk/government/news/musical-instrument-firms-to-pay-millions-after-breaking-competition-law
“Yamaha was granted total immunity from fines for being the first to bring the conduct to the attention of the CMA”.
Such exemplary conduct from Yamaha...
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GregC
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PostPosted: Tue Jun 30, 2020 12:46 pm    Post subject: Reply with quote

I have noticed that the Roland, Korg, Yamaha " flag ship " keyboards are all very close to the same MSRP

In a post on another music forum, I analyzed Yamaha financial statements, and I concluded, based on the #'s , Yamaha was making a very healthy profit margin on their Montage.

Their healthy profit margin is obviously supported by the MSRP.

I would also conclude that, their 'competitors ', Roland and Korg are also enjoying a very healthy profit margin, on their flag ships, supported by the MSRP, which ranges from $3200 to $3900 depending on key size model.

Naturally, on that forum, 90% of keyboard owners disagreed with me. They were totally satisfied with the high MSRP on the flag ships.

So consider this,,, how did Roland, Korg, Yamaha, all arrive at their MSRP flagship pricing ?

Coincidence ?

My opinion is that they looked at this flag ship niche, put a pencil on exactly
where the MSRP is, and determined " that's what the market will bear".

I suppose this makes business sense.

But all 3 co's , doing the same thing ? Or following the W/s leader in the category, which arguably is Korg ? With their 9 year old w/s, which is Kronos ?

I am not a legal expert FYI. Just my observations here.
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megamarkd
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PostPosted: Tue Jun 30, 2020 1:17 pm    Post subject: Reply with quote

Confirms a thought I've had for 30yrs now....
Hard not to feel cheated, but at least it's officially acknowledged now. Hope the rest of the musical instrument industry is pulled up for it also (speak to a sax player about what goes on with the cost of their instruments).
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GregC
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PostPosted: Tue Jun 30, 2020 1:23 pm    Post subject: Reply with quote

megamarkd wrote:
Confirms a thought I've had for 30yrs now....
Hard not to feel cheated, but at least it's officially acknowledged now. Hope the rest of the musical instrument industry is pulled up for it also (speak to a sax player about what goes on with the cost of their instruments).


I think its over due, esp on high priced items.

No one has ever asked me, but I estimate 'we' are paying an extra 25% on high priced items.

I concluded this by doing a margin analysis on Yamaha's financials.

A very successful co. Financially strong and a hefty gross margin on sales.
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Jan1
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Joined: 16 Mar 2005
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PostPosted: Tue Jun 30, 2020 1:34 pm    Post subject: Reply with quote

GregC wrote:
I have noticed that the Roland, Korg, Yamaha " flag ship " keyboards are all very close to the same MSRP

In a post on another music forum, I analyzed Yamaha financial statements, and I concluded, based on the #'s , Yamaha was making a very healthy profit margin on their Montage.

Their healthy profit margin is obviously supported by the MSRP.

I would also conclude that, their 'competitors ', Roland and Korg are also enjoying a very healthy profit margin, on their flag ships, supported by the MSRP, which ranges from $3200 to $3900 depending on key size model.

Naturally, on that forum, 90% of keyboard owners disagreed with me. They were totally satisfied with the high MSRP on the flag ships.

So consider this,,, how did Roland, Korg, Yamaha, all arrive at their MSRP flagship pricing ?

Coincidence ?

My opinion is that they looked at this flag ship niche, put a pencil on exactly
where the MSRP is, and determined " that's what the market will bear".

I suppose this makes business sense.

But all 3 co's , doing the same thing ? Or following the W/s leader in the category, which arguably is Korg ? With their 9 year old w/s, which is Kronos ?

I am not a legal expert FYI. Just my observations here.

The price fixing issue is no surprise, there were way too many coincidences involved to explain the MSRP’s.
At least the secret is out now.
In this light it’s interesting to see the prices Behringer will ask for a possible future workstation because that company is an outsider.
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GregC
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PostPosted: Tue Jun 30, 2020 1:44 pm    Post subject: Reply with quote

Jan1 wrote:
GregC wrote:
I have noticed that the Roland, Korg, Yamaha " flag ship " keyboards are all very close to the same MSRP

In a post on another music forum, I analyzed Yamaha financial statements, and I concluded, based on the #'s , Yamaha was making a very healthy profit margin on their Montage.

Their healthy profit margin is obviously supported by the MSRP.

I would also conclude that, their 'competitors ', Roland and Korg are also enjoying a very healthy profit margin, on their flag ships, supported by the MSRP, which ranges from $3200 to $3900 depending on key size model.

Naturally, on that forum, 90% of keyboard owners disagreed with me. They were totally satisfied with the high MSRP on the flag ships.

So consider this,,, how did Roland, Korg, Yamaha, all arrive at their MSRP flagship pricing ?

Coincidence ?

My opinion is that they looked at this flag ship niche, put a pencil on exactly
where the MSRP is, and determined " that's what the market will bear".

I suppose this makes business sense.

But all 3 co's , doing the same thing ? Or following the W/s leader in the category, which arguably is Korg ? With their 9 year old w/s, which is Kronos ?

I am not a legal expert FYI. Just my observations here.

The price fixing issue is no surprise, there were way too many coincidences involved to explain the MSRP’s.
At least the secret is out now.
In this light it’s interesting to see the prices Behringer will ask for a possible future workstation because that company is an outsider.


I am a supporter of competitive pricing. In theory, these co's are supposed to
set MSRP independently.

It always struck me, how Roland, Korg, Yamaha managed to figure out a very close MSRP for similar products. Such as "work stations ".

Musicians, per my debate on another forum, are more than willing to pay high prices. They have various rationale etc etc.

Musicians should scrutinize the #'s. It is a business.
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Jan1
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PostPosted: Tue Jun 30, 2020 2:02 pm    Post subject: Reply with quote

GregC wrote:
Jan1 wrote:
GregC wrote:
I have noticed that the Roland, Korg, Yamaha " flag ship " keyboards are all very close to the same MSRP

In a post on another music forum, I analyzed Yamaha financial statements, and I concluded, based on the #'s , Yamaha was making a very healthy profit margin on their Montage.

Their healthy profit margin is obviously supported by the MSRP.

I would also conclude that, their 'competitors ', Roland and Korg are also enjoying a very healthy profit margin, on their flag ships, supported by the MSRP, which ranges from $3200 to $3900 depending on key size model.

Naturally, on that forum, 90% of keyboard owners disagreed with me. They were totally satisfied with the high MSRP on the flag ships.

So consider this,,, how did Roland, Korg, Yamaha, all arrive at their MSRP flagship pricing ?

Coincidence ?

My opinion is that they looked at this flag ship niche, put a pencil on exactly
where the MSRP is, and determined " that's what the market will bear".

I suppose this makes business sense.

But all 3 co's , doing the same thing ? Or following the W/s leader in the category, which arguably is Korg ? With their 9 year old w/s, which is Kronos ?

I am not a legal expert FYI. Just my observations here.

The price fixing issue is no surprise, there were way too many coincidences involved to explain the MSRP’s.
At least the secret is out now.
In this light it’s interesting to see the prices Behringer will ask for a possible future workstation because that company is an outsider.


I am a supporter of competitive pricing. In theory, these co's are supposed to
set MSRP independently.

It always struck me, how Roland, Korg, Yamaha managed to figure out a very close MSRP for similar products. Such as "work stations ".

Musicians, per my debate on another forum, are more than willing to pay high prices. They have various rationale etc etc.

Musicians should scrutinize the #'s. It is a business.

Fully agree.
It’s also YOUR money, and that particular commodity does not grow on trees.
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Musicwithharry
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Joined: 23 Mar 2012
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PostPosted: Tue Jun 30, 2020 3:44 pm    Post subject: Reply with quote

I guess I am not surprised by the news...

Isn't the MSRP really an arbitrary number that a company assigns to its product? I am not aware of ANY product where you actually pay the MSRP though.

I am pretty old school when it comes to music products and have a number of Ensoniq keyboards in my stable. One of them is the VFX-SD. Back in the day, that has an MSRP of $2,695 USD and one could get it for a bit less. I think that the TS series went for the same price or $2,795... I cannot remember.

I would also not be surprised if the big three companies (Korg, Roland, Yamaha) were in bed together in some form behind the scenes...

Let us consider Kurzweil as well. Their products cost a lot of money as well, as do Ketron, Wersi, etc... maybe they are all in bed together, fixing prices on their high end stuff.

Even the affordable stuff from these companies are more expensive than they were. The Kross 2 88 model with the expanded PCM and OASYS piano samples (I think that they are derived from the OASYS) is now $1,299 USD. The price of the PA700 went up to $1,499 USD. I bought mine for $1,299 (actually I got mine at 20% off, but the retail was $1,299 in September 2017).

I cannot believe that the COVID-19 is singularly to blame for the increases in price.

Again, I think that MSRP pricing is arbitrary and I doubt anyone is paying MSRP for any music products.

Grace,
Harry
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GregC
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PostPosted: Tue Jun 30, 2020 4:25 pm    Post subject: Reply with quote

Musicwithharry wrote:


Again, I think that MSRP pricing is arbitrary and I doubt anyone is paying MSRP for any music products.

Grace,
Harry


its not arbitrary. True, you can dicker with retailers- that's standard stuff, bargain hunting. close outs, demos, etc etc

MSRP is a manufacturer hammer, lets say device, that Yamaha, Roland, Korg use to keep prices at retail at a certain level esp for high priced products. What is a hammer ? PM me.

So this is all behind the scenes stuff. Its been going on for some 30-40 years.

Prices for products are supposed to be set independently. Thats to support competition in the marketplace.

The way it use to work is that " Competition is King ". The way it mostly works is " Profit is King " . A bad analogy is its a taffy pull.
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billysynth



Joined: 20 Jan 2005
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Location: Australia

PostPosted: Thu Jul 02, 2020 9:46 am    Post subject: Reply with quote

Look in 2001 I purchased a Novation SuperNova Pro 2. The Australian Retail price at that time was $7,000.00. I enquired at several Music Store for a better price...remember when we use to walk into Music Stores? I went to three different stores for a price. Two of them would not go below $5.500.

The 3rd Store gave it to me for $4,500. When I took the box home I noticed a plastic packet on the underside. I pulled it off and inside was an invoice to the Music Store from whom he bought the Novation from. His price was $3,500!!!

The mark up was 100%. They double the price of what they buy it for.

This also, by coincidence happened to me a second time. You won't believe.

In 2005 I purchased an OASYS 88. The Australian retail price was $15,000.00

Again I went around to get the lowest price I could. Nobody would go below
$13,500.00 or thereabouts.

Only one guy gave it to me for $10,500.00

When I took the big box home, underneath was a plastic packet. I took it off and inside was an invoice. The price on the invoice was $7,500.00!!

Again, the price doubled by the Retail Store allowing them to play around with prices when clients come in for pricing. You think your getting a good price but they are duping you...

Vas
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voip
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PostPosted: Thu Jul 02, 2020 10:06 am    Post subject: Reply with quote

That's the trouble with this retail sector; low volume sales. The music store needs to cover its costs, which are not trivial - rental, staff, utilities, insurance.....
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GregC
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PostPosted: Thu Jul 02, 2020 10:14 pm    Post subject: Reply with quote

voip wrote:
That's the trouble with this retail sector; low volume sales. The music store needs to cover its costs, which are not trivial - rental, staff, utilities, insurance.....


Internet sales turned the retail B & M landscape upside down

Simply, folks will buy the cheapest, and a legit Internet site will have significantly less SG& A [overhead expense]

I think this is the status quo for 20 years.
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