[Harp-L] RE: Hohner Price Increase

[JohnnieHarp <johnnieharp@xxxxxxxxx>]

> I do think it's odd that Hohner has decided to raise prices
> significantly at a point in time when:
>
> 1) Unemployment in its target markets is higher than at any
> time in decades ....

Makes one wonder how well current (new?) management understands the
nature of its customer base and their buying behaviors, the current
market price dynamics, and the competitive landscape with respect to
substitutes. For instance Suzuki Bluesmaster for $31 versus Hohner
Marine band for $37 or Golden Melody for $43. Given that Suzuki's can
be embossed and gapped as necessary to match players preferences, why
NOT change if cost is wildly different?

> It's difficult for me to see how Hohner's move will
> increase their market share, especially for a new model like
> the Crossover.

I too, see no current evidence to suggest that this pricing strategy
will increase market share.

If Hohner is attempting to put more emphasis on its premium products
in terms of corporate profitability, then with premium pricing must
come perceived value increases. Blister packaging does NOT fit this
bill. A beautiful, fancy box with a luxurious cloth or very pretty,
newly designed cover plates might.

> In fact, assuming that Suzuki can ramp
> up production of Manjis to meet demand, I would expect that
> the opposite is more likely to happen.  I have no doubt
> at all that many people will be more likely to buy a Manji
> priced at $45 or so at retail than a Crossover priced above
> $70.

In terms of the Manji, I have seen mixed reviews on Harp-L regarding
the supposed improved playability, out-of-the-box.  Only time will
tell whether consumers will favor the Manji over the Bluesmaster when
price and value are factored in.

It seems to me that unalterable anatomical and physiological
differences between individuals greatly affects instrument playability
and personal preference given identical harmonicas. Personally, I
would attempt to optimize Manji playability with reed work and at the
end the day, may find the Manji to be no more playable than a
self-customized Bluesmaster. So why buy the higher priced Manji versus
a Bluesmaster?  Besides, the Bluesmaster has full-length cover plates
which I greatly prefer.

> But perhaps there are elements of strategy here that I
> don't understand.  You

One key possibility that should not be ignored is the potential for
significant management arrogance / stupidity.  Wouldn't be the first
time and surely won't be the last in terms of corporate management
generally (as opposed to Hohner specifically).

> Or perhaps exchange rates have been
> hurting Hohner for some time, and they've been holding off
> on the price increases until they couldn't bear it anymore.

This likely can be evaluated through direct comparisons with Seydel
and how they are approaching the market given their German residency,
similar operating conditions and products.

> ... if Hohner succeeds in convincing large numbers of players to
>  try somebody else's products, the damage could be lasting.

This is especially true in mature markets.  Here, it is much easier to
lose market share through management missteps than to gain or gain
back marketshare through management brilliance. Market share loss is
usually the precipitator of changing competitive dynamics in mature
markets.

> I don't take any pleasure in saying so.  I've enjoyed
> playing the Marine Band deluxe I bought months ago and
> intended to buy more.  But not at prices north of $70
> per instrument.

I expect that Hohner's competitors are licking their lips unless, they
too, have huge price increases in the offing. We should have seens
signs of this already. First grab marketshare.