MAP
I understand why a company would want to use MAP (Minimum Advertised Price). Theoretically, it lets all shops compete on equal ground when it comes to price. This is little more than a pipe-dream however, since MAP isn't the REAL price, merely the advertised price. Once you ask someone via telephone, email or in the shop what the REAL price is, the shop keep is free to adjust it however they see fit.
This CAN be good for the dealer. It allows them to vary prices based on whatever bills are due, how much they think the customer can afford, how much they want to keep the customer coming back, etc. etc. Unfortunately, with only a little research, the customer will know if they can get a better deal elsewhere.
In the end, MAP does little more than give an impression of a product's value that reflects high quality on the company which isn't really all that important and it adds just one more tedious step in the quest for gear on the consumer's end. Instead of merely hunting down the best price they now have to email and call every shop that is an authorized dealer who may or may not have the inventory they're looking for (some companies like Gibson won't even let a company advertise the shop's inventory which goes beyond short-sighted into just plain ridiculous).
But I've become fairly apathetic to the existence of MAP. It's there, more and more companies are embracing it and SOMEWHERE along the line, they're finding logic that they think tips the scale in MAP's favor. I fail to see it, but I'm just one guy who isn't a marketing/finance major and I'm not in the biz.
I think though, that companies need to lower the MAP to a more reasonable level. The fact that MAP is so ridiculously high in some cases means that some people who aren't familiar with MAP and who think that MAP is the actual price (I CANNOT EMPHASIZE ENOUGH THAT MAP IS NOT THE ACTUAL PRICE) are considering pieces of gear that they really want, out of their price range when in reality it isn't. This is making them settle for something that they may want, sure, but not what they want the MOST. Lower the MAP and you'll see an increase in sales as more and more people see that their holy grail of gear is attainable.
Big Box Stores
I'm generally not a fan of big box stores. Two that are the exception are Elderly Instruments and Sweetwater Music, both of which have great customer service and a friendly feel. That's the line. These are guitar stores that care about the customer who just so HAPPEN to have vast inventories. They don't look at their inventories as an excuse to be rude or snuff customers or potential customers.
Other shops do though. The staff is apathetic and the company seems to not care if there are a growing number of people dissatisfied with their experiences in the shop. After all, they have the inventory which means they'll get the customers - even if it isn't the SAME customers.
This won't last. It's good for the short run, but mark my words, it won't last.
Companies
I have no beef with guitar companies other than one. I have no problem with their higher prices for equal quality gear that can be bought from an independent dealer JUST because it has a famous name on the headstock. That's capitalism and if the people want to buy it, why should a company not want to raise the price to meet the demand? That's within their right and I guess if it means more options, than I'm in.
I do have a problem with any company looking at the order sheets for big box shops and thinking it's a good base line and trying to impose that on a small shop. A small shop cannot afford to stock the inventory that some companies are saying is the minimum because they just aren't that kind of shop. It doesn't help when a quality company that people WANT is also imposing a purchase of a large stock of instruments from their lower-end sister company that the owners KNOW are just going to sit and rot in the corner just eating away at their books.
This is why more and more shops are buying instruments and gear from boutique builders - builders who are completely fine with a dealer buying one or two guitars instead of fifty.
Again, the big box shops won't last and when they go down, the small shops are going to remember the big companies trying to impose ridiculous quotas that would bankrupt a small shop and they will not be hospitable.
So in summary: MAP needs to be lowered, big box shops need to realize they have to depend on return customers if they want to succeed and big companies should not have the same expectations for a small shop as they do with a big one.
If these three things were fixed, the guitar world would probably be a lot more happy.
-Pappy
2 comments:
I genuinely don't see how you can assume that big box stores "have to go down". There's NO data to substantiate that. On the podcast you said Sam Ash was out of business - totally incorrect.
Have you EVER seen a Wal-Mart close? I know that MARS Music went under (too bad, they were the best of the lot!). But American consumers are the ones looking for the best price with no regards for quality or service - hence the proliferation of Wal-Mart stores.
MAP is more than just a guideline. Many times items are available for less, but often not. Just try asking for a discount off the GC "low, low price", which is typically MAP. It's possible that a Store Manager can bring the cost down, but it's NOT often that a regular salesperson can just cut a deal with a customer. You say you'ld like to see MAP lowered. Do you know the formula from which MAP is established? Is it a percentage mark-up from cost, or a percentage discount off MSRP? HOW MUCH PROFIT should a shop make? (Ideally, enough to stay in business! Is a shop overcharging if the owner drives a nice car?)
We ALL know this: the big-box stores pay less for everything that they sell than do their small, independent competitors. But which shop has higher overhead? You bet the big-box store does! The MAIN advantages that they have are in MARKETING - they have the muscle and clout, so people believe that they'll get a better deal there.
MAP isn't solely in the realm of the MI (Music Instrument) industry; it's existed in CE (Consumer Electronics) just as long. And it's really very much a non-issue, even though I know many people who get passionate about it. And there's something FAR more diabolical than MAP - it's called UMRP - Unilateral Minimum Retail Price. By signing a Dealer Agreement to carry products with a UMRP, the dealer agrees to sell at a FIXED PRICE! No Authorized Dealer can violate this policy. It's not illegal, because it's an up-front agreement; if you don't want to abide you simply can't carry the product. I know that there ARE some UMRP brands in the MI industry - the main one that springs to mind is in BOTH MI and CE and you will all recognize the name, as it's the most widely known brand of speakers in the world - BOSE.
True, there's no data to support my premonition that the big box shops will go down, but with the companies that stock the big box stores expecting small stores to carry the same amount of merchandise, the shops will have to look elsewhere for gear and that's when they'll get in bed with the indie builders. Some indie builders want nothing to do with the big shops and THOSE are the companies that are eventually going to cause the downfall.
See, consumers are going to see high quality merchandise without a ridiculous price tag (on some gear, anyway) and choose to buy that because there's a more hands-on approach while still being affordable. Word will spread about the quality sending the indie builders into the successful realms and the big names are going to start to feel it. Big shops are going to feel it too as customer numbers start to dwindle.
At least, I hope so. And I don't hope every big box shop closes down, just the one that's staffed with jerks.
I do think MAP should be lowered to a price that's more on par with what the company actually expects it to sell for. I'm all for keeping MAP because it allows competition, but there are buyers out there who are under the impression that what they want is so far out of their price range that they won't even humor a salesperson with an email or phone call and THAT is a bad thing.
Post a Comment