Quote:
Originally Posted by shalym
Other products may have *suggested* retail prices, but they are just that...suggestions. Retailers are free to sell for whatever price they want. Yes...there are exceptions to that rule, and it seems as if Apple is one of the exceptions, but even with Apple products I can buy an iPod Nano for $129 from Walmart even though it's $149 from the Apple Store, so it seems that stores are *allowed* to discount, it's just that most don't.
Shari
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Also, price variation isn't just for discounting; sometimes it is a response to market conditions (inner city groceries at risk for regular robberies, for example). Sometimes, when products are in high demand or there is a shortage, the retailer will go well above MSRP even over manufacturer objections.
A classic example being the introduction of the MAZDA MIATA. Mazda priced it at $16k and dealer cost was well below that--typical for the time--but demand so seriously outstripped supply that practically all dealers sold them well above list. Some merely added ridiculously priced add-ons like paint preservatives and undercoating to diguise the profiteering but the more honest ones simply added "scarcity charge" or even "dealer profit" on the sticker. The options were either pay or wait a year for Mazda to ramp up production.
Even those that paid the premium got a good deal; it was really a great car and Mazda really mispriced it compared to the competition.
You see similar things with gaming consoles when they get very hot: suddenly they're only available in bundles with accessories and less than hot games. No outright gouging because retailers could find their supply cut off if they are too obvious about it but bundling in profit boosters is tolerated; it prevents write-downs on the unpopular games.
For several years in a row asian HDTV manufacturers (Sony, Samsung, LG, notably) tried forbidding discounting of new models beyond a small nominal amount (like 5%) and the retailers dutifully followed orders for six months, quietly watching Vizio and the chinese brands happily eat up market share and their stocks of non-discounted sets pile up until the manufacturers, whose warehouses were by then overflowing, relented. And then smart shoppers got their deals; 25-30% instead of 15-20%.
Price maintenance rarely works in open competitive markets; too many consumers are smart enough to wait out the market or just get a competing product. Which is why price fixers need conspiracies: all it takes is one player willing to let prices float to sink the fixers.