[Harp-L] Hohner Price Increase

["Bill Kumpe" <bkumpe@xxxxxxx>]

Robert Hale, the DUKE of WAIL said:

 

I think your analysis is accurate. 

What do you propose manufacturers do, to "keep that in mind"?

 

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I think that very much depends upon Hohner's marketing strategy.  If they
are bent upon exploiting the market, they should continue doing exactly what
they are doing and they MAY, and I repeat MAY, squeeze a few more profitable
quarters out of a declining world market.  But, they are doing that the
price of low end market position for not just themselves but the instrument
itself.  If a good harp gets so expensive that kids and old men can't buy
one with their lunch money, the market will wither.But, if they would prefer
to conserve the market and position it for future growth when the economy
improves they will lower margins and profit expectations and abandon
multiple unit packaging.  They will instead concentrate on quality at a
reasonable margin and try to retain market share. 

 

I used to work in the chief counsel's office of a fortune 500 that
manufactured products for a very similar market.  Part of my portfolio was
hunting down (mostly Chinese) knockoffs of our products.  I developed some
interesting skills.  Another part of this task was looking for subs who were
selling our product independently "out the back door."  A while back, just
for kicks, I applied those skills to determine the street price of a brand
name harmonica in China "out the back door" with no label.  Job lots of
thirty to forty dollar US harps were less than ten bucks per unit FOB
shipping point PRC.  I don't know if they would have been the same product
"white label" or just a cheap knockoff.  In deals like that you don't know
until you take a shipment.  But, I had a suspicion I was dealing with the
source.  So, I suspect there may be enough margin to consider cuts.

 

Perhaps Hohner would consider taking a lesson from a humble country lawyer.
As lawyers go, I am a pretty cheap one.  My credentials would allow me to
bill at least $200.00 per hour my local market.  I rarely bill that.
Sometimes I bill as low as $100.00 for a person in a jam and average around
$150.00 for my regular business clients.  (Price goes up if you give me
grief.)  The $50.00 per hour difference is not lost money.  It is reinvested
in the future of my practice.  My clients never complain about a bill and
always call me back with new business.  I position myself so that they don't
think about the competition.  And, I steal a lot of business from other
lawyers who bill every client as though they will never see them again.
Maybe Hohner should consider reinvesting some of its margin in the future of
their company, the market and the instrument.

 

Bill Kumpe

Tulsa, OK