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kwatt wrote:Dave would you please remind about this later?
No need, I’ve started work on the relevent info already 😉
Dave.
Re: £179 For A Zanussi Washer!
I seem to remember a certain K Watt being interviewed on radio 4’s you and yours consumer prog not so long ago ,Is it worth following up any contacts there ? along the lines of “its not the sticker price thats important ….”
Just a thought
Lawrence
Re: £179 For A Zanussi Washer!
Na, not been interviewed by them Lawrence, spoken to them though. The interview I did was for BBCi, essentially the BBC website. Spoke to You & Yours though and a few others in the media so I’ll just start banging on doors again and see what shakes out.
However I think you and I are thinking on similar lines. 😈
Let’s see what we can come up with to highlight the stupidity of the situation, then we may expand on that a bit and really upset some people since they’re really starting to hack me off with this crap.
K.
Re: £179 For A Zanussi Washer!
Dave_Conway wrote:I can’t quite believe Electrolux for doing this 👿
I actaully sat in the same room (as did a few others here) last year with someone pretty high up within Electrolux who quite clearly stated that they were making a stand against this “price war” cr@p.
OK, he was in the service side of the industry and sales will have had the upper hand no doubt, but for fooks sake !!!!
Sorry I’m a bit late jumping in on this.
I’m surprised to read the comment about Lux making a stand on the “price war” when their strategy is to implement substantial cost-downs on materials in order to expand market share.
You’re right, service will have had little say in it.
Re: £179 For A Zanussi Washer!
mikem wrote:Sorry I’m a bit late jumping in on this.
I’m surprised to read the comment about Lux making a stand on the “price war” when their strategy is to implement substantial cost-downs on materials in order to expand market share.
You’re right, service will have had little say in it.
So, from that then there will be “saturation” of the product, this will give us in service a greater workload as percentages come into the equation; however, we will possibly be undervalued as there will not be anything within the budget for failures. The end result will be us at the bottom of the food chain geting the crumbs off the table. Nothing new there then!
No problem with cost downs if the market can be kept bouyant. That does not mean fat profits, but money for research & development as well as investment in people and the infrastructure that goes with it. Eventually there could be a perception in the mind of the consumer that they have bought an above average product.
The snag is, we are all price driven and realists. I shop around for my tyres, heating oil, computer goods, stationery etc. As long as the big boys dominate the market they can dictate the same market.
In the early 60’s a certain character by the name of John Bloom went to Tallent engineering and asked them to make a Washing Machine that he could market for less than 20 guineas. The Rolls Rapide & Concorde was born. All very well then as there were few owners of washing machines and he helped create a market that was reachable to the masses. Regretfully for him though the bubble burst, nothing wrong regards the marketing or product in the early days, but he set a criteria that in the end he was unable to sustain. Tallent engineering kept making the product long after his demise through Colston or Electricity Board own badge, and went out at a more realistic price.
A no “whistles and bells” philosophy looks good on paper, but finally the perception will be a poor quality “cheap as chips” machine that doesn’t last. People soon forget they paid silly money for it, and then berate the quaility of what they bought. This then passes down the grapevine, and a poor reputation comes on the back of it.
Mr Dyson was successful in raising the vacuum cleaner market, and he looked like he was about to do similar on his laundry product. Didn’t happen though. Some retailers would place an AEG machine beside the Dyson Washer on their display, that would lead the customer to choose a different product than they intended. They were interested in what Mr Dyson had to offer on the back of his previous track record, but didn’t fancy the price or colour scheme perhaps.
I’m really hoping 2005 will be the year that realism starts to come back to this trade.
Alex
Re: £179 For A Zanussi Washer!
But you would expect lux, and Merloni for that matter, to maintain their margins whilst they’re carrying out their relative strategies.
While margins are maintained you’d expect business as usual for you guys although I wouldn’t be so naive as to suggest that.
Whether it is realistic to maintain margin I don’t know, it hasn’t been so far.Looking at things another way, I don’t believe Lux and Merloni are trying to take marketshare directly from one another. I reckon they are both looking over their shoulders at the “cheap as chips” brands and trying to minimise their respective loss of marketshare to them.
The end result being that whoever is most successful will be no1 in the league table.A price war is not sustainable long term but it is likely to change the face of marketplace and the industry.
Re: £179 For A Zanussi Washer!
Cost downs are fine, retention of margin and, ultimately, customers is far more important long term I should think but it appears that long term planning with moves such as these is cast aside.
Dyson had to do something different and he did, it didn’t work. Proving that Mr Dyson isn’t just as smart as he thinks he is, or at least his design team were not. It also proved that funky design and some clever marketing don’t always cut the mustard and eventually the machines appeared in Makro with the prices shredded, inevitable really.
Just like the Chinese and a few EU/US names to boot (IMO) they have lost sight of the product that they are selling to a large extent looking more at the cost on Currys shop floor and the cost/ways to achieve that than any other factor. But then, that’s not a new thing by far.
Mike, even if the margin does not drop the percentage allowed to filter through to the service budget will do and so, next year, we’re in a position where we’re faced with cost rises that we simply cannot counter yet there’s less money in the pot to pay for it. Fun isn’t it? 😉
The joys of an archaic system.
Both Lux and Merloni as well as others do have the power to lead and counter the cheapo brands in many other ways, it’s just that they’ve been resting on their collective laurels for far too long now concentrating on making the product cheaper or a bit prettier than actually developing it. For example, when was the last time we saw a new tub group introduced by Lux or Candy Group? I can’t speak for the rest as I’ve not been poking around in them for a while, but even the Servis crap remains virtually unchanged, despite the obvious flaws and under-engineering in them.
If you ask why something doesn’t get resolved on production you get the, “but that would cost another Euro” argument thrown back at you. Fine, but it doesn’t resolve the losses faced through needless service calls or loss of a customer or indeed the exchanges, which cost a damned fortune to do especially on non-freestanding products.
I think you’re spot on though Mike a price war is not sustainable and the only winner will be the shark that swallows the minnows when they fall foul. Only in this case the minnows may be bloody big!
K.
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