Mesa Boogie Price Increases

[chadd]

Also bear in mind that when Mesa increases wholesale prices to dealers, the dealers need to maintain their margins as well. Mesa factors that into the MAP/MSRP obviously, but not everyone on the internet factors it into these discussions.

Overall inflation is irrelevant, it's the specific sectors that need to be considered. Our freight costs are up dramatically, and I would imagine Mesa's are as well.

 

[Bogner]

This is not entirely true.

It can be a HUGE advantage to "underprice" in a market to gain a carton of market share.

Product Cost = 20
Product Price = 100

Net revenue from this is 60 (20 cost and 20 overhead) - you are doing well.

You can "underprice" the market and sell at 80, a good deal for your product, giving a lot of value for the dollar to the customer, undercut the completion who sells at 90 by 10, and still be +40.

Obviously depends on the buy decision point....but "underpriced is not really the concept you want to work with, it is the Market share to revenue ratio you want to balance.
- Market share goes too high at a given cost, you lose because you have to invest revenue you don't have (from "underpricing" to win market) to grow capability
- Price to high, you lose market at a rate that causes overall revenue to drop, since you are pricing out the Market (Gibson)

I don't disagree with your post but I do believe you are somewhat splitting hairs. You know what I am saying overall. My point being Mesa has always made proper margin and if they didn't, they wouldn't be in business. We can go a million directions off of that premise and get into all kinds of business plans. No need to do that. If a company is not profitable they are not in business for long. Additionally, people gravitate to higher priced items being better. If Diezel's (high end of price wise amp builders) Price Point was Bugera's price point (low end of builders) I doubt Diezel would be as popular. Mesa grabbed market share because they made a good product in America. They have never been cheap in any economy at any timeframe.

 

[Bogner]

Hey one thing that occurred to me, Mesa prices dropped on many amps last late spring after their stock caught up

-Mark stuff specifically -but I didnt track every amp in their line

-are we sure these price increases aren't normalizing their prices from the drop last spring?

Maybe it was only the Marks, but thought I'd mention it.

Low watt amps maybe but not the high watt staple amps. The short season there was a price drop was a sale, not MSRP.

 

[Bogner]

Also bear in mind that when Mesa increases wholesale prices to dealers, the dealers need to maintain their margins as well. Mesa factors that into the MAP/MSRP obviously, but not everyone on the internet factors it into these discussions.

Overall inflation is irrelevant, it's the specific sectors that need to be considered. Our freight costs are up dramatically, and I would imagine Mesa's are as well.

True, most people don't understand the scope of business. While shipping costs are definitely up, Mesa hasn't sold much of anything the last year so shipping prices isn't much of a factor if any for them. Companies that were selling stuff increased their prices and once that happens it isn't long before everybody else does it...because they can. I find it interesting that the prices never work the other way when the conditions are reversed. If parts costs dropped, shipping dropped, and labor rates dropped (just an example here) I doubt you would see pricing drop. When those things increase, prices increase.

Anyway, it is what it is.