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ScoobyDoo555 Platinum Member
Joined: 12 Jan 2008 Posts: 840 Location: Herefordshire, UK
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Posted: Mon Apr 18, 2011 6:58 pm Post subject: |
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_________________ Yamaha SY77 & KX88, SSL Nucleus, Korg Kronos 61, Wavestation A/D, Access Virus B, Roland XP30, DeepMind12D, System 1m, V-Synth XT, Focusrite Red16Line, Unitor 8, Akai S3000 XL, Alesis Quadraverb+, Focal Shape Twins, Full fat iMac, Logic Pro X, ProTools 2021, loadsa plugins.
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DaveBoulden Senior Member
Joined: 20 Nov 2009 Posts: 314 Location: Kent, United Kingdom
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Posted: Mon Apr 18, 2011 7:09 pm Post subject: |
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JPWC wrote: | Of course this does not necessarily mean Europe should pay 60% more, and maybe the won't, once the pre-ordering begins in Europe. |
...and that is the crux of the issue. We all realise there will not be absolute parity between each regions pricing due to the size of the potential market and so on... though having said that, if you add together the populations of of the larger Western European counries, it dwarfs even the population of the USA, and in a considerably smaller space. It's because there is such a big difference that we're questioning where all that extra money is going on this side of the pond. |
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GregC Platinum Member
Joined: 15 May 2002 Posts: 9451 Location: Discovery Bay (San Francisco Bay Area)
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Posted: Mon Apr 18, 2011 7:23 pm Post subject: |
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DaveBoulden wrote: | JPWC wrote: | Of course this does not necessarily mean Europe should pay 60% more, and maybe the won't, once the pre-ordering begins in Europe. |
...and that is the crux of the issue. We all realise there will not be absolute parity between each regions pricing due to the size of the potential market and so on... though having said that, if you add together the populations of of the larger Western European counries, it dwarfs even the population of the USA, and in a considerably smaller space. It's because there is such a big difference that we're questioning where all that extra money is going on this side of the pond. |
you really shouldn't assume based on population
i think it would be worthwhile to gather a estimate of Euro pre orders. _________________ Kronos 88. MODX8
Achieve your musical dreams
https://soundcloud.com/user-898236994 |
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DaveBoulden Senior Member
Joined: 20 Nov 2009 Posts: 314 Location: Kent, United Kingdom
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Posted: Mon Apr 18, 2011 8:09 pm Post subject: |
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I would have thought there is a very similar percentage of the population in Europe who are synth playing musicians as there in the US. |
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zahush76 Junior Member
Joined: 09 Mar 2011 Posts: 98
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Posted: Tue Apr 19, 2011 1:39 pm Post subject: |
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RKfan wrote: | I hope Korg takes a third approach - make the cost in Europe and the US the same (or at least pretty similar) - I dont mind paying 20% more dollar wise ($3000+20% = £2250) - but I do object to 60% more.
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All of this is nice and interesting, but you're forgetting one important thing:
The 2999$ price tag in the U.S. is from stores that bought the Kronos directly from korg in japan. All the taxes, VAT etc - are there, and it sums up to 2999$ for a kronos 61.
Why do you take that price as a base price? It's not the U.S. that distributes the kronos.
U.S. dealers, as well as U.K. dealers, other european dealers, Israeli dealers etc etc - all get this gear from korg japan, where it's manufactured.
U.K. dealers do not get their kronos's from U.S. so i see no reason to take the U.S. price and add VAT and all kinds of taxes to it, as a formula to get to what the european price should be. |
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GregC Platinum Member
Joined: 15 May 2002 Posts: 9451 Location: Discovery Bay (San Francisco Bay Area)
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Posted: Tue Apr 19, 2011 1:53 pm Post subject: |
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DaveBoulden wrote: | I would have thought there is a very similar percentage of the population in Europe who are synth playing musicians as there in the US. |
since we are ( always) discussing the Kronos price in the UK/Europe, and you feel the unit sales US vs Europe, are similar, it makes sense to ask what the Kronos pre-orders are( or will be) in Europe. If not the pre-orders, actual sales for the first month or 2.
I know this is not possible today, but once the pricing is clearly established, and units to Europe start flowing, then a rough comparison ( US vs Euro)
of initial sales( in units) can be made.
If we see a large delta, that could also financially explain a market price gap between the countries. _________________ Kronos 88. MODX8
Achieve your musical dreams
https://soundcloud.com/user-898236994 |
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RKfan Senior Member
Joined: 15 Feb 2011 Posts: 402 Location: Cambridge, England
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Posted: Tue Apr 19, 2011 3:19 pm Post subject: |
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How about price elasticity and demand - I bet someone at Korg has done that. I have just done a little calculation using an Ed factor of -1.7 (similar to -1.5 for pleasure flying elasticity and a little more for US to EU emotional factor, look it up on Wikipedia - you can also download an Excel Macro to do the calcs from Microsoft). I then had a think about the relative numbers of K61s you would expect people to buy if you change the prices.
If the US price was $3,000 and the EU price was $3,600 (UK £2,250) then you might expect to sell 73% the number of units compared with the US, and get 87% revenues. If you then put the price up to £3,000 ($4,800) then you would only expect to sell 43% the number of US units, and 70% revenues (i.e. still profitable but ripping off some people and pissing off many more) - OK so these are rough calculations with quite a few assumptions but the basic message is as follows:
If you make the product too expensive dont expect too many sales, if you have a 60% price differential you will sell less than half the number of units you could have!
Alternatively sell it at an acceptable price and have double the number of fans (and an RKfan too). |
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GregC Platinum Member
Joined: 15 May 2002 Posts: 9451 Location: Discovery Bay (San Francisco Bay Area)
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Posted: Tue Apr 19, 2011 3:48 pm Post subject: |
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RKfan wrote: | How about price elasticity and demand - I bet someone at Korg has done that. I have just done a little calculation using an Ed factor of -1.7 (similar to -1.5 for pleasure flying elasticity and a little more for US to EU emotional factor, look it up on Wikipedia - you can also download an Excel Macro to do the calcs from Microsoft). I then had a think about the relative numbers of K61s you would expect people to buy if you change the prices.
If the US price was $3,000 and the EU price was $3,600 (UK £2,250) then you might expect to sell 73% the number of units compared with the US, and get 87% revenues. If you then put the price up to £3,000 ($4,800) then you would only expect to sell 43% the number of US units, and 70% revenues (i.e. still profitable but ripping off some people and pissing off many more) - OK so these are rough calculations with quite a few assumptions but the basic message is as follows:
If you make the product too expensive dont expect too many sales, if you have a 60% price differential you will sell less than half the number of units you could have!
Alternatively sell it at an acceptable price and have double the number of fans (and an RKfan too). |
I see it from a bottom line, finance attitude. ( thats the way I run my business).
They could be looking to hit a total profit figure by country. Obviously, the best chance of hitting most of the profit is in the first 6 months- 1 year.
And they ( and me) are very aware a certain sales figure has to be attained in operating a business.
They are not in a high volume ( many units sold) business. Its a niche business( high priced workstations/synths) with relatively few units sold- thus protecting unit profit is paramount. For example, with me, I don't bother investing in the sale of a unit, unless I am reasonably sure, my profit is protected , and my profit
as a % of sale is adequate.
The way they track ( and I track) profitable sales is by carefully managing
gross margins as a %, expenses as a %, and finally profit as a % ( of sales)
IOW, I have a Profit and Loss statement that captures this data, and tracks it monthly. All managed businesses have internal P & L statements.
I suspect eyes are glazing over. If folks are financially inclined, they will mostly follow the above. _________________ Kronos 88. MODX8
Achieve your musical dreams
https://soundcloud.com/user-898236994 |
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RKfan Senior Member
Joined: 15 Feb 2011 Posts: 402 Location: Cambridge, England
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Posted: Tue Apr 19, 2011 3:59 pm Post subject: |
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I can make it dead simple for Korg.
At £2,250 (purchase price) RRP can be higher - I will buy a K61
At £2,400 - I will think about it
At £2,500 - I will probably not buy
At £3,000 - I will laugh nervously then buy something else - the sales guy will get some of my money (so he'll be laughing too) - Korg will not. |
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DaveBoulden Senior Member
Joined: 20 Nov 2009 Posts: 314 Location: Kent, United Kingdom
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Posted: Tue Apr 19, 2011 4:49 pm Post subject: |
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zahush76 wrote: | RKfan wrote: | I hope Korg takes a third approach - make the cost in Europe and the US the same (or at least pretty similar) - I dont mind paying 20% more dollar wise ($3000+20% = £2250) - but I do object to 60% more.
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All of this is nice and interesting, but you're forgetting one important thing:
The 2999$ price tag in the U.S. is from stores that bought the Kronos directly from korg in japan. All the taxes, VAT etc - are there, and it sums up to 2999$ for a kronos 61.
Why do you take that price as a base price? It's not the U.S. that distributes the kronos.
U.S. dealers, as well as U.K. dealers, other european dealers, Israeli dealers etc etc - all get this gear from korg japan, where it's manufactured.
U.K. dealers do not get their kronos's from U.S. so i see no reason to take the U.S. price and add VAT and all kinds of taxes to it, as a formula to get to what the european price should be. |
Zahush76, you've completely misunderstood the point. We ALL know the distributor in each territory imports directly from Japan, no-one has even once suggested UK dealers buy from the US.
Since the only released pricing so far is the US price, that is being used a baseline price for what a Kronos can cost once it's been imported and is standing on the shop floor. The claim is that if shops in the US can put it on sale sfor $2999 and make a profit, then it should be possible to offer them at the equivalent price in other countries, hence converting THAT price into other currencies. In the case of the UK, we pay sales tax (VAT) on all keyboards, and so that's why you are seeing it added in those examples as the quoted US price is without sales tax.
Clearer now? |
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Zeroesque Senior Member
Joined: 17 Jan 2011 Posts: 451 Location: SoCal
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Posted: Tue Apr 19, 2011 5:09 pm Post subject: |
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RKfan wrote: | I can make it dead simple for Korg.
At £2,250 (purchase price) RRP can be higher - I will buy a K61
At £2,400 - I will think about it
At £2,500 - I will probably not buy
At £3,000 - I will laugh nervously then buy something else - the sales guy will get some of my money (so he'll be laughing too) - Korg will not. |
Judging from prices at absolutemusic, you're saying that you will only buy a Kronos if it costs the same as yesterday's Fantom or Motif. Good luck with that. _________________ Kronos 61, Kronos2-88, Hammond B3, Baldwin SD-10 |
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peter_schwartz Full Member
Joined: 14 Jan 2011 Posts: 206
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Posted: Wed Apr 20, 2011 6:12 am Post subject: |
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Everyone wants to save a buck, pound, farthing, or Euro. That's understandable. It's human nature. But as far as European prices go compared with US prices...
Last time I checked, Japan is much further away from England/UK than it is the US. So transport of Kronii (and other Japanese goods) is going to cost more to get to you than in the US. I offer that as only the tip of the iceberg of probable reasons as to why there's sometimes a vast difference in the cost of goods in one country versus another. I'm sure the other reasons behind the price difference have less to do with price gouging and more to do with economic viability. That's my 2-farthing's worth. |
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sani Senior Member
Joined: 22 Jul 2002 Posts: 354 Location: Croatia
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Posted: Wed Apr 20, 2011 6:36 am Post subject: |
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@peter_schwartz
Your argument seems very reasonable. But Australia on the other side doesn't seem to be much further away from Japan compared to the US. And the prices there in AU seems even more ridiculous. |
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ScoobyDoo555 Platinum Member
Joined: 12 Jan 2008 Posts: 840 Location: Herefordshire, UK
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Posted: Wed Apr 20, 2011 8:15 am Post subject: |
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I totally get your reasoning Greg and FWIW, my eyes don't glaze over, as it is all too easy for people to forget that regardless of our feelings for Korg (or any other manufacturer), they're actually in the business of making money (shock/horror!!! )
My take is that with exception to the vehicle in which the technology's housed and the resulting interface, the technology is relatively established (a subtle way of putting it!)....
So the price could reflect this - in the product range, the next "best" thing is the M3, which is a good £1000 cheaper...... and based on less of the same technology.....
We'll see what happens when the price is officially announced eh? _________________ Yamaha SY77 & KX88, SSL Nucleus, Korg Kronos 61, Wavestation A/D, Access Virus B, Roland XP30, DeepMind12D, System 1m, V-Synth XT, Focusrite Red16Line, Unitor 8, Akai S3000 XL, Alesis Quadraverb+, Focal Shape Twins, Full fat iMac, Logic Pro X, ProTools 2021, loadsa plugins.
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RKfan Senior Member
Joined: 15 Feb 2011 Posts: 402 Location: Cambridge, England
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Posted: Wed Apr 20, 2011 8:25 am Post subject: |
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Quote: | Judging from prices at absolutemusic, you're saying that you will only buy a Kronos if it costs the same as yesterday's Fantom or Motif. Good luck with that. |
No - I want to pay more or less what the US prices are...
K61 is $3,000 - That converts to £1,875 - If I pay £2,250 ($600 more than you) then I am already paying 20% more. If the price of the Kronos in the UK was £3,000 ($4,800) then I would be paying 60% more - this is clearly not value for money. Just look at the prices of the Jupiter 80 on sweetwater $3,000 and in the UK the RRP is £2,580 approx. so the street price would be 10% less than that £2,300ish - so why would the Kronos be priced any differently?
I dont think I need good luck at all - I think Korg needs it more than me. My career/business isn't on the line if the Kronos fails to sell. And if it is seen as too expensive..... the next version might be called Motif KF (Kronos failure) |
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