Sony/Samsung to enforce minimum TV prices in the US, can it happen here?

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surfisup1000

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#102857 24-May-2012 08:20

Sony Corp. and Samsung Electronics Co. are trying to force retailers to rein in discounts on televisions, a tactic aimed at preserving profit margins that may also help protect chains such as Best Buy Co. BBY +0.54% and Target Corp. TGT +0.19% from cutthroat online competition.

http://online.wsj.com/article/SB10001424052702304791704577420383631021786.html?mod=rss_Europe_Technology

Could it happen here? Maybe not, since NZ must be an unimportant market.

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#629726 24-May-2012 08:29

Shouldn't matter as much, since we probably get most of Australia's stock.

Plus Australia's economy is doing so well, and ours is doing alright...probably a bit less.

Less shipping costs, most of the electronic stores across AU/NZ are doing well. Apart from of course Dick Smith. So I don't see the need for setting these levels.

The US economy on the other hand is tanking, and has been for a while.

I have moved across the ditch. Now residing in Melbourne as a VOIP/Video Technical Trainer/Engineer.

trig42

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#629760 24-May-2012 09:33

I don't think it's legal here - it's price fixing.

Fisher and Paykel used to something similar here using their Exclusive Dealer network, and they would get very poopy if a retailer heavily discounted their product. I don't think they ruled that they couldn't discount, they would just get very stern.

If all the suppliers did it, then it would be collusion, also frowned upon by the Commerce Commission.

Byrned

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#629773 24-May-2012 09:55

ComCom have already warned a distributor last year of trying to enforce discounting on a retailer, although I'd say in practice it would be difficult to prove.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10756440

The Commerce Commission says that suppliers cannot:

- enforce a recommended price for goods
- pressure a retailer to stop discounting
- refuse to supply or punish a purchaser who sells goods below the recommended retail price
- offer a retailer an incentive or special deal if the retailer agrees to stop offering discounts for goods

Dunnersfella

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#630047 24-May-2012 20:28

How could they possibly enforce this?
Ask for an invoice from every sale made?
I mean... come on.

nickb800

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#630049 24-May-2012 20:35

Dunnersfella: How could they possibly enforce this?
Ask for an invoice from every sale made?
I mean... come on.

I think it would more be about adverts, as they have the greatest 'tarnish' on the product brand (although i think the brands in this case are over-reacting). Nothing to stop harvey norman, etc from advertising at standard prices and giving massive discounts in store at the slighest nudge, but that wouldnt have a great effect on the product brand overall. But yes, it would be practically impossible for Sony/Samsung to keep an eye on instore discounting/bargaining.

Crazy idea, glad that it (at least appears to be) is illegal here.

eXDee

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#630053 24-May-2012 20:45

vinnieg: Shouldn't matter as much, since we probably get most of Australia's stock.

Plus Australia's economy is doing so well, and ours is doing alright...probably a bit less.

Less shipping costs, most of the electronic stores across AU/NZ are doing well. Apart from of course Dick Smith. So I don't see the need for setting these levels.

The US economy on the other hand is tanking, and has been for a while.

Hmmm, Australia uses MPEG2 based digital, we use MPEG4 in freeview? Unless the chips are very cheap and not much difference between them, i assume a MPEG2 decoding chip is cheaper to produce than an MPEG4 one. A TV you buy over there won't work here.
Perhaps they just swap out the tuner and firmware.

vinnieg

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#630055 24-May-2012 20:54

eXDee:
Hmmm, Australia uses MPEG2 based digital, we use MPEG4 in freeview? Unless the chips are very cheap and not much difference between them, i assume a MPEG2 decoding chip is cheaper to produce than an MPEG4 one. A TV you buy over there won't work here.
Perhaps they just swap out the tuner and firmware.

If it's a Samsung from Australia and freeview certified, it will work here. It should work the other way round too. I'm not sure about the other brands though...

However, it would be a complete waste of money. You'd lose the warranty through shipping to another country, and it'd probably be a similar amount including shipping to buy it across either side of the tasman

Edit: after further checking I think most 2011 Samsung TVs will in fact work both ways, since they seem to both have 7mhz/8mhz stepping, and MPEG2/4. However if someone could confirm that would be easier

Still not sure if anyone would have shipped their TV over with them though.

I have moved across the ditch. Now residing in Melbourne as a VOIP/Video Technical Trainer/Engineer.

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Dunnersfella

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#630546 25-May-2012 21:45

nickb800:
Dunnersfella: How could they possibly enforce this?
Ask for an invoice from every sale made?
I mean... come on.

I think it would more be about adverts, as they have the greatest 'tarnish' on the product brand (although i think the brands in this case are over-reacting). Nothing to stop harvey norman, etc from advertising at standard prices and giving massive discounts in store at the slighest nudge, but that wouldnt have a great effect on the product brand overall. But yes, it would be practically impossible for Sony/Samsung to keep an eye on instore discounting/bargaining.

Crazy idea, glad that it (at least appears to be) is illegal here.

I believe advertising (lost leaders on the cheaper tellies) has been one of the main reasons for low prices here.
I mean, Noel Leeming do their 20% off stunt every second week right now, sometimes including models that aren't even available yet (and may indeed be 3 months away - VT50 from Panasonic comes to mind).
Great for market share if it works.
Poor for profits though... and we all know that you can't put market share percentage points in the bank...
Dumb retailing really, but, fortunately... it's nothing new - so we get cheap tellies.

Maybe we'll see a move towards a stock consignment model where the wholesaler owns the product, ensuring price control. Or, more specialty stores (similar to what Sony have always done, but on a larger scale) where the store is run by the importer...

mattwnz

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#630554 25-May-2012 22:06

Dunnersfella:
nickb800:
Dunnersfella: How could they possibly enforce this?
Ask for an invoice from every sale made?
I mean... come on.

I think it would more be about adverts, as they have the greatest 'tarnish' on the product brand (although i think the brands in this case are over-reacting). Nothing to stop harvey norman, etc from advertising at standard prices and giving massive discounts in store at the slighest nudge, but that wouldnt have a great effect on the product brand overall. But yes, it would be practically impossible for Sony/Samsung to keep an eye on instore discounting/bargaining.

Crazy idea, glad that it (at least appears to be) is illegal here.

I believe advertising (lost leaders on the cheaper tellies) has been one of the main reasons for low prices here.
I mean, Noel Leeming do their 20% off stunt every second week right now, sometimes including models that aren't even available yet (and may indeed be 3 months away - VT50 from Panasonic comes to mind).
Great for market share if it works.
Poor for profits though... and we all know that you can't put market share percentage points in the bank...
Dumb retailing really, but, fortunately... it's nothing new - so we get cheap tellies.

Maybe we'll see a move towards a stock consignment model where the wholesaler owns the product, ensuring price control. Or, more specialty stores (similar to what Sony have always done, but on a larger scale) where the store is run by the importer...

It is because there is so much competition in that area of the market. We didn't really have this sort of thing 15 years ago, it seems to have been since we have had these Ozzie retailers setting up in NZ, who I think are able to bring in cheaper prices, as they have far more buying power, so can buy more in bulk and are able to get far better discounts.

Dunnersfella

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#630562 25-May-2012 22:44

It's certainly a case of attrition...
Waiting for the other guys to die, so the winner can take the spoils.
Whether it's the small guys giving up, or the big boys going down in a blaze of glory (and curse words) - well, that remains to be seen. But no doubt, the company who sells the most TV's will go broke first...

vexxxboy

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#630574 25-May-2012 23:47

probably got a lot to do with Sony losing 5.7 Billion dollars last year, they have to try something

Common sense is not as common as you think.

scuwp

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#630618 26-May-2012 08:55

If price fixing is illegal, and they cannot force retailers to sell at a 'certain' price...then someone please explain to me how Apple get away with it. It is next to impossible to get any significant price variation on an apple product in NZ.

Lazy is such an ugly word, I prefer to call it selective participation

sbiddle

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#630620 26-May-2012 09:10

scuwp: If price fixing is illegal, and they cannot force retailers to sell at a 'certain' price...then someone please explain to me how Apple get away with it. It is next to impossible to get any significant price variation on an apple product in NZ.

Margins on Apple products are significantly less than other brands, and Apple do no discounting or retailer scan back deals. This means retailers have no real choice but to sell products at the RRP.

Dunnersfella

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#630842 26-May-2012 20:22

I do doubt Samsung will ignore any minimum pricing deals in NZ... after all, rumour has it that they'll start to be sold in the Warehouse soon...

JBO

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#635540 4-Jun-2012 17:01

sbiddle:
scuwp: If price fixing is illegal, and they cannot force retailers to sell at a 'certain' price...then someone please explain to me how Apple get away with it. It is next to impossible to get any significant price variation on an apple product in NZ.

Margins on Apple products are significantly less than other brands, and Apple do no discounting or retailer scan back deals. This means retailers have no real choice but to sell products at the RRP.

I assume when The Warehouse started selling iPads cheaply a few months back it was because they successfully managed to parallel import from the States or similar, and thus pay less for each unit. Why doesn't every retailer do this? Just don't have the street smarts?

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