RE: [Harp-L] RE: Hohner Price Increase

["Alexander Savelyev" <Alexander.Savelyev@xxxxxxxx>]

hi Bill, pls. see my comments between the lines.






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>>> "Bill Kumpe" <bkumpe@xxxxxxx> 25/01/2010 15:42 >>>

Alexander said:  please face the music

Well Alexander here is the tune here in the US.

(1)  I am sorry that you have problems but those problems are your problems
not ours.

           (ALEX) 
           -  It seems I made a disclaimer that no one should follow bad examples and that it's our problem that we have such a situation (mostly due to stupid trade law, import duties, bad quality control, and           
          general chaos in the country, etc.). Anyway I guess they have similar song in Germany regarding anyone's problems whether you are in the States or somewhere else.  

(2)  No matter how you feel about the U.S. I strongly suspect that the U.S.
is Hohner's largest market and if they blow it here, which I think they are
doing in spades, Hohner prices will go up even more making them even less
competitive.  It's economics 101.  The more you buy the less you pay,
individually or nationally.  Free enterprise is a wonderful economic engine
when it is allowed to work.  It is incredibly flexible.  If you leave a hole
in the market somebody else will fill it.  


      (ALEX) 
      - I have to assure you that I feel very positive about the U.S. as I've spent two years in the States and after some hardships, two robberies and other adventures, I still respect the people and the country and  
       will never miss a chance to support anyone in any situation to the extent possible. 

       - And it's for sure, the U.S. is the Hohner's largest market. Once again, "the more you buy the less you pay, individually or nationally" works only if you do buy more, and as it appears now, people started to cut their expenses buying less, which results in a logical conclusion - the less you buy, the more you pay, regardless of the size of the market - I guess the optimum level was reached when the size doesn't matter anymore. So, it's a matter of momentum advantage of each side. 

       - The other thing is economics 101. If one digs deeper, it's clear that it's been argued for a long time what comes first - demand or supply and what has more influence in this or that situation - same story 
       with the chicken and the egg. In addition, 101 in the U.S. might not fully match the same 101 course in Germany. There's always something to it you might not take into consideration, but which matters a lot in general. For instance, lower price for fuel due to some indirect trade advantages in some oil-rich countries, or lower prices for some products due to some other "favors", or a simple issue of exchange rate fluctuations. That is, if the sea level differs and the dam gets broken, the flooding is inevitable. So, it's not just a situation of huge price increase out of no where, it's just new market conditions that everybody else was 'enjoying' in other counties long before that - so you don't pay more, you just share the burden in hard economic situation. 


So, very simply put, Hohner has the choice of remaining competitive or
losing market share in the world's largest consumer market.

       (ALEX) 
       As for the hole in the market - fully agreed - somebody will fill it. But the key word is "somebody", which to me sounds like almost 'nobody', at least if we talk about the quantities sold and respective 
       quality comparable to the Hohner's. 

        - And if thought of well, who is ready to invest - in the shaky market conditions - in the equipment/resources, etc.,  to fill in the gap to, say, cover at least some 10% of widen niche that Hohner is going to 
       leave behind? The first thought that comes to mind  - Chinese products will do the job - but then the question is if people are ready to pay a higher price for Hohner products? Most probably the number of 
      people wishing to do so will go down, but no doubts those who really need quality and the product they are accustomed to, will pay the price anyway. It's been proved before. And price elasticity is one of the important factors here as well. And I'm sure that German/Hohner marketing and economics people are smart enough as to not make big steps without doing their homework. 

Who knows, maybe they decided to cut down sales volumes and took a bullet a half year ago, and now we are supposed to do the same...   



Bill Kumpe
Tulsa, OK 







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