Korg's shameless policy to under-developed countries

[kanthos]

2. What I can't live with is this - Korg decided to charge for their products equally worldwide. Which means if some Korg product costs 1000 euros in Germany, it will cost 1000 euros in Croatia too. Korg obviously doesn't take into consideration the fact the German standard paycheck is about 1500 - 2000 euros per month, while Croatian is 500 - 1000 euros per month. More so, taxes aren't the same worldwide.

Korg products are probably produced in a few select locations and distributed worldwide. Just because you, in Croatia, have less expendable cash, that doesn't mean that it will cost Korg less to make the keyboard. The distributor could take a reduced profit by marking the prices down for Croatia, but they should still pay the same rate (exchange rates and taxes such aside) to buy the keyboard from Korg Japan since the manufacturing costs are fixed no matter where the keyboard is shipped.

While it's bad for you as an individual, it's the reality of living in the world: prices are different in different places for different reasons. Some places are more expensive to live in than others, and some places have a higher average income than others (and not necessarily both higher cost of living and higher average income either!)

My wife traveled across Canada for school last May and was surprised that a 750 gram block of cheese that would cost, at most, $7 CAD in Toronto would cost $13 CAD in Edmonton, despite Edmonton being in Alberta, which is one of the best locations in Canada for agriculture, and also having less sales tax (Alberta has no provincial sales tax, just a nation-wide tax by the Canadian government that all Canadians pay). Oh, and those are before-tax prices, of course. The same is true across the board; Edmonton is considerably more expensive than Toronto. It's called cost of living, and it sucks when it's not in your favour, but it's reality.

[RiotNrrd]

Just as a side note, every state in the US does have a sales tax.

Untrue. Oregon does not. I remember hearing that Delaware doesn't either, although I don't know for sure, but I know for a fact that Oregon doesn't because I live there.

[Synthoid]

Just as a side note, every state in the US does have a sales tax.

Untrue. Oregon does not. I remember hearing that Delaware doesn't either

Yes, no sales tax in Delaware.....I used to live there.

[AnthonyB]

Whether korg or government - i guess it doesn't ease the "pain" much when Someone from Croatia (for example) sees offers like this (In UK) EXB-FW, EXB M 256, *AND* Radias***ALL FREE*** with M3. Maybe things should be "evened out a bit"... for example "Just" the "Radias" for UK, and "EXB256 board/EXB-FW" for Croatia (for example) or vice versa. Don't think that one should "have-it-all" and other countris NOTHING at all. ...Just a thought -


I kind of feel guilty having my Free MOSS board with my Triton - now:(



AnthonyB

[Xenomorph]

Anthony, feel free to send that guilt-ridden MOSS board to me if it will ease your pain

[AnthonyB]

Anthony, feel free to send that guilt-ridden MOSS board to me if it will ease your pain

I love the board though - that's the problem:), it isn't just an "extra" (to me anyway:) - it is worth nearly that of the Triton it's shoved into!. Nearly $550 HERE on EBAY. I must point out, that I actually "Waited" for an offer for something free - before buying my Triton Studio (still Rockin' keyboard), and i brought it within the "time-limit offerd by Korg (I think). Otherwise, I would have waited for the Triton to come down in price to compensate for the offer i "missed". Unfortunatly, some people have no options available in the first place (OP)


AnthonyB

[Timo]

Whether korg or government - i guess it doesn't ease the "pain" much when Someone from Croatia (for example) sees offers like this (In UK) EXB-FW, EXB M 256, *AND* Radias***ALL FREE*** with M3. Maybe things should be "evened out a bit"... for example "Just" the "Radias" for UK, and "EXB256 board/EXB-FW" for Croatia (for example) or vice versa. Don't think that one should "have-it-all" and other countris NOTHING at all. ...Just a thought

It should be noted that DV247 (Digital Village) is a independent UK retailer, nothing to do with Korg.

The UK is exceptionally deep in recession right now, considerably worse than the USA and Western Europe. Several previously 'mammoth' music technology chain stores in the UK have gone bankrupt. I guess DV are having to resort to large concessions to keep money moving.

[AnthonyB]

But Digital villige say (of the oasys)"Please note there are no discounts available on the Korg Oasys product range and therefore our pricebeat policy does not apply"


AnthonyB

[Vadim]

I know People in Eastern Europe that earn about $20 a week, (when they have a job), and have either KORG, Ensoniq, Roland or Yamaha keyboard, and headphones. some also have sutain pedal, keyboard stand.

And also know how to use them without knowing a single word in English, exept maybe "yes", "no" and "ok"..
and No user's manual in their language, and they make AMAZING music.

also, to get such products there, you gotta go to Poland or Germany, if you get a visa.

[jon@alesis]

Hello as an ex employee of 9 years with Korg UK (and still in the industry) I feel I should try and explain some of the variables here. Sorry for the amount of detail here but it saddened me that such an ethical company as Korg was taking the blame for things often outside their control…..

1) Distributors…….

Korg do not have a wholly owned business in each country themselves where they can control prices. They often use distributors. These distributors can charge what they like. Sometimes they are strategically cheaper as they are trying to enter, or take more market share in a given sector and be aggressive. Sometimes they are just more expensive . This can be for a multitude of reasons - sometimes they think the product can simply stand the market forces – sometimes it’s because they are spending a lot of money on marketing and promotions on it etc and need a reasonable margin to fund that marketing. Either way prices can and will be different.

2) Offers –

As has been pointed out – sometimes there are offers and these differ from each country. Why? Well as in above , many distributors will have different reasons. Perhaps it’s a massive overstock situation? Perhaps a new product is arriving replacing the former and they want to clear some stock before it arrives. Each country will have different situations and thus different offers.

3) Currency – a biggie

Each currency will be differently affected by others and it’s across the world – massive fluctuations. In the UK not so long ago Sterling was $2 to the £1 – Now it’s $1.38 i.e almost the 50% you mentioned.

Now…..some businesses depending on their strength and cash flow can weather the storm. If that country as a whole is under currency pressure, then the competitors in that country will ALSO be under pressure so may raise their prices and make the Korg products look cheaper.
Or…..the distributor are not so strong to absorb the currency fluctuations and have to raise their prices and this can lead to different prices. I note the country you mentioned Croatia uses Kuna, with all due respect not a major currency so may well be under even more pressure than the Dollar/Euro and Sterling. Look around you - every music DJ product has the same price hikes especially if they are in countries which buy in dollars but have a general Euro street price. These countries have the worst of both worlds. Besides many of the Korg bills are probably in dollars now as the manufacturing base are strong in countries that have no requirement for the Yen.

Some companies will have bought ahead at a good exchange rate – some not.

Lastly some businesses do not actually buy stock from the parent company at all as such, but are rather external warehouses – they pay for the stock when the have sold it – the upside is you don’t pay for the stock, the downside is you have the pay the daily spot rate so if I had a few million pounds of stock in my warehouse where I paid the parent company at $2 to the pound I would be laughing as my peer group distributors may have bought the stock 40-50% higher price than I did.

ALL these variables come into play but one thing is certain it isn’t Korg’s fault.


4. Pay checks etc

There may be some small price charges on the periphery but Korgs cost of manufacturing will be same no matter what. Now, if they had absolutely huge margins to play with, maybe they could look at subsidising those countries with the lower incomes but a) they don’t, and work on unbelievably small margins or sometimes even at a loss (trust me – I’ve seen them) b) who exactly decides what country would get a better price compared with others and in what part of their economic cycle do you bench mark it against, c) isn’t that the same discrimination but in reverse you are making accusations about in the first place? !!

5) Prices too low caused a change of distributor?

Well that’s a new one on me. I don’t know the ins and outs so can’t comment but believe me Korg are extremely loyal to their distributors. (PROBABLY TOO LOYAL) In general terms a distributor will be only “canned” for a mixture of, say, not paying their bills, not meeting sales targets, not promoting the brand, giving out false/ confidential information etc . …..Not because their prices were too cheap?

That doesn’t make sense anyhow. If Korg prices were too cheap in a given country then they would be getting large market share and thus giving large stock orders….. to… …er, korg!

Placing very large orders is not usually a premise for canning somebody as far as I’m aware.

Lastly Korg Inc and it’s employees are a good bunch. Please do not make such bold accusations as you did without being in possession of at least some of the facts re distribution and how business work in the industry. If you had written a “why are there such variances in pricing between countries” you may have got a reply but your comments come over as naive and somewhat inflammatory .
They probably wont reply to you because they wouldn’t want to start a whole long winded and largely negative discussion, that’s not their style, but I cant stand by and let you make the comments without someone putting the other side of the story and hope they forgive me for doing so on their behalf.

regards

Jon

[popcorn]

Here in our countries rules Count Specula!

Thanx Jon, for your kind and detailed explanation I am sure that what you explain here is what it is, but it took me many years to start to think like this. It could remind me now to think why I see these fantastic price intervals in different fields of the market.
I understand Shrike's position and I was thinking many years why these big companies do not think for people like us as their potential customers.It happened to me to understand while I was buying my Triton in 1999 that this "poor" guy who was selling it had nothing to do with Korg and that he is maybe the 3 or 4 dealer after original company.Well I got the good price, because I payed with Danish crona then and the course was good for me, doesn't matter.....

Why I say we are victims of speculations in all Eastern Europe-never mind that Bulgaria is member of EU.The goods in supermarkets in Germany or Austria are 1,5 till 2 times cheaper than here.We are going to Greece to buy cheaper gas for our cars.I am returning from Europe when I am at festivals with washing powder in my car or staff like this- which is a shame! In Croatia the gaz is more expensive than this in Slovenia. Friend of mine was in January in Danmark and when I was there 10 years ago I remember there was extremely expensive- now everything is opposite..
I will not go into more details, just to mention - the average wage here is 250 euro per month!!!Then, what the people in Germany do with so much money at their disposal- HAHAHAHA.....

No Korg dealer here!

But what when we have Alesis one! I reported to Alesis support in USA for a problem in the boxes in a warranty and they were so kind after detailed conversation to suggest the boxes to be serviced. poor they! Our people in the service started to shout at me" Who are these stupid poeple from Alesis to send you here! They just produce these boxes with this problems!!!" I returned boxes to them, they refuse to return money to me.....still.

Donny

[MedicalDocument]

The purpose of any corporation is to make money.

I've heard that statment more than enough times and it doesn't cease to be stupid.


Back on topic I've noticed most of the cheaper synthesizers have jumped up around £100.

[djcl.ear]

The purpose of any corporation is to make money.

That is alegedly the main (not the sole) purpose of the shareholders, goal that is then conveyed to the managers.
However like in CD fidelity; it is not just the amount of bits collected, but the timing involved. Companies really want to maximize their long term profits, not just next year cashflow.
This is why most firms define their MISSION. Usually something like "our mission is to become the manufacturer of the best quality equipment...bla,blah".

And so a few multinationals , have sort of invested in developing countries, by charging less at certain areas, but that was mostly in pre-fax times. Investment that later translated in a larger customer base.

That said, I agree that most factors that jon@alesis point at, explain the price differences any buyer face from country to country. These deltas are kept in place mostly by borders, legislations, customs, distances, etc.
However nowadays with the proliferation of internet, cellphones. couriers, airports, ports, highways, commerce treaties, borders falling down, etc, etc. and all this accelerating...Then it's not difficult to see that in a growingly integrated world, trade differences will keep diminishing.

////The long term view shows that first individulas and then countries gain by closing the gaps still in place.
Ultimately well organized, creative companies keep producing key product in more markets, more developed and more stable ones which precisely permit the Co's long term existence and success...

Ok this is decades-long-general-view, and its no help for most prospective customers facing a hiGH PRice... But consider
You are already writing at an international forum...Some of us might find a way to legally jump the commercial borders, lower the barriers, etc... Ebay anyone?

[jon@alesis]

Hello , I generally agree. Not so long ago, but yes pre internet, dealers worried about the guy down the road, then later the next town, then county etc. We started worrying about the UK then Europe and soon with ever increasing visibility of prices, across the world - then manufacturers will have to make some hard decisions..........they are used to sell in their domestic territory at very low margins but then will be forced at the same price everywhere as the domestic price will be widely known and the concept of buying from countries thousands of miles away becomes less alien to consumers

Here's the downside....if manufacturers of goods don’t get a chance to blend the margins across the world to end with something reasonable then that margin wont allow serious investment, they either do one or two things 1) sell direct and bypass the retailer completely- (very high risk - potentially commercial suicide) or don’t invest in new technology etc.
Potentially commercial suicide again.!

bottom line it's not easy to make profits when the world is shrieking - "it needs to be cheaper"

Profits in my book means investment in the future security of the brand, the staff involved making designing and selling it and retailers making and honest profit in order to pay staff , buy stock, represent it properly etc.

Jon

[papersky1]

well thanks to ebay ppl can at least buy internationally and then get it shipped to their place so im sure if i was living in croatia thats what id be doing for instance i live in australia and a micro korg xl is about a grand in australian dollars while if i buy one from ebay and ship it over to aus it works out to be 700 dollars now i dont point the finger at korg for it being like this i point at the ppl u stated such as governments who tax these instruments, and rip off retailers and to any retailers listening one guy before said the point of a business is to make money well the driving force for a consumer is to get it for less