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Latest post 02-25-2012 2:38 PM by Jeff. 11 replies.
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  • 02-24-2012 4:22 PM

    B&O pricing policy

    Hi all,

     

    I don't mean to sound like a money miser, but my local B&O dealer balks at the slight mention of 'discounting', even if multiple items were ordered in one transaction.  

    This rigid pricing policy seems to be common amongst some 'high end' brands in Australia, such as Miele appliances.

    Is B&O pricing policy that strict elsewhere worldwide?  Has anyone received genuine discounts? 

    I recall a few years ago, B&O offered 7.5% off RRP in Australia on all new products to celebrate the company's anniversary.

    Also, In Aus, the price has not increased since 2010, any guess on when pricing will increase?

     

     

  • 02-24-2012 5:43 PM In reply to

    Re: B&O pricing policy

    I'm amazed you have had no price increase since 2010 - currency fluctuations have hammered UK pricing over the past couple of years.

    Each dealer is free to set their own pricing, it's not a B&O policy. However based on the cost of the product tithe dealer and the overheads of operating a dealership - combined with very tight margins and very costly commitment to a customer-care-for-life program, the prices are generally pretty similar across the dealerships in each country.

    Listening to some members on here though, service levels can vary from country to country or dealer to dealer.

    If I could just play devils advocate to the discount argument for a moment - which I am sure will open up a debate(!) - how would you feel if the dealer started negotiating on the service they were willing to offer? I.e. if you wanted 5% off, and the dealer said "ok, but if I do that you have to dispose of all the packaging, and if you want a visit in the future to have another run through of how to operate the system - or if you want us to help you integrate third party products, then we will have to charge you by the hour?"

    I have always favoured a policy of delivering the best possible customer experience at all times, but if margins were cut any lower then we would really struggle to continue to deliver this in the way that we want to and have been.

    You can't have a premium brand experience if you want discount pricing. I do of course totally agree that you should therefore get a fantastic brand experience once you have invested in the product.

    Not at all criticising the content of your post - just offering another point of view.

    Over the last couple of years I have hd some great experiences from other brands - Audi took me VIP to Le Mans, Mercedes took me on a fantastic AMG track day. I have taken my own customers abroad, golfing, out for dinner, to various events, and I am looking to organise a factory tour - but all of this comes out of our only revenue which is the retail margin made from selling products.

    I do agree that the purchase of several items in order may merit a sweeter deal - although in my experience the bigger the system, the more the aftercare requirement.

    Let the debate begin! :)

    BV7-40MK4BR,7-32,6-22,6-23,6-26,BSnd5,9000,BLab9,3,4000,2,BCom2,6000,Btalk1200,LC2s,Lutron

  • 02-24-2012 5:48 PM In reply to

    Re: B&O pricing policy

    I think dealers work on a circa 30-40% margin (higher margins for the bigger ticket items) and I think it is up to the dealer in quesion how much he chooses to discount.  I'm sure heavy discounting is discouraged but I suspect it is illegal for B&O to control the pricing policies of their franchisees.  I recently managed to negotiate a little over 20% off the list price of a pair of new 8002s and I think circa 30% off a new 10-46.

    Puma

  • 02-24-2012 5:55 PM In reply to

    • Stan
    • Top 150 Contributor
    • Joined on 04-17-2007
    • Posts 593
    • Gold Member

    Re: B&O pricing policy

    Interesting that you should mention negotiating price vs service as this is exactly what I've done in the US. I believe I received 15% off on my Bs5 by installing it myself (I could be off a few percent). It also helped that I had already bought a lot from this dealer.  Although last time I spoke to the dealer about potentially buying some bl9s, he said the days of the big discounts were over...  But then, last month, he gave me 10% off on a beo6 without even asking.  Go figure...  

     

    Stan 

  • 02-24-2012 6:01 PM In reply to

    Re: B&O pricing policy

    Some dealers will set their prices higher than others to factor in an anticipated discount offer. Just like how if you go to India to buy a fake watch you could probably negotiate a 70% discount when in reality you are paying the price they wanted in the first place - they just started high to allow for negotiation!

    BV7-40MK4BR,7-32,6-22,6-23,6-26,BSnd5,9000,BLab9,3,4000,2,BCom2,6000,Btalk1200,LC2s,Lutron

  • 02-24-2012 7:40 PM In reply to

    Re: B&O pricing policy

    Really can't add much to Martinw's well considered post. Discounting is not part of the Bang & Olufsen experience and customer demands are inelastic no matter how much they might save. 

    There is scarcely anything in this world that some man cannot make a little worse and sell a little more cheaply. The person who buys on price alone is this man's lawful prey. - John Ruskin

  • 02-24-2012 10:25 PM In reply to

    • expoman
    • Top 500 Contributor
      Male
    • Joined on 04-17-2007
    • United States
    • Posts 222
    • Bronze Member

    Re: B&O pricing policy

    If I recall all the stores in Austrailia are now owned by B&O Denmark so they may not have that option?

  • 02-24-2012 10:57 PM In reply to

    • petermc
    • Top 500 Contributor
    • Joined on 04-16-2007
    • Shepparton, Australia
    • Posts 87
    • Founder

    Re: B&O pricing policy

    B&O Australia is owned By Bang & Olufsen so the pricing is set across the country.

    In my experience the only discounts are the ones sanctioned by B&O.

    You might find the reason for no price increases is the value of the Australian dollar. Also it seems that products here are not the cheapest compared to the rest of the world. I think you can get a BS8 in the US for around $999 USD where it is priced around $1,400 AUD here.

    That said I do get great service from my dealer and I'll keep going back to them.

     

    Peter

  • 02-24-2012 11:26 PM In reply to

    • John
    • Not Ranked
      Male
    • Joined on 08-15-2008
    • Melbourne Australia
    • Posts 64
    • Bronze Member

    Re: B&O pricing policy

    MartinW:
    I'm amazed you have had no price increase since 2010 - currency fluctuations have hammered UK pricing over the past couple of years.

     

     

    Each dealer is free to set their own pricing, it's not a B&O policy. However based on the cost of the product tithe dealer and the overheads of operating a dealership - combined with very tight margins and very costly commitment to a customer-care-for-life program, the prices are generally pretty similar across the dealerships in each country.

     

     

    Listening to some members on here though, service levels can vary from country to country or dealer to dealer.

     

     

    If I could just play devils advocate to the discount argument for a moment - which I am sure will open up a debate(!) - how would you feel if the dealer started negotiating on the service they were willing to offer? I.e. if you wanted 5% off, and the dealer said "ok, but if I do that you have to dispose of all the packaging, and if you want a visit in the future to have another run through of how to operate the system - or if you want us to help you integrate third party products, then we will have to charge you by the hour?"

     

     

    I have always favoured a policy of delivering the best possible customer experience at all times, but if margins were cut any lower then we would really struggle to continue to deliver this in the way that we want to and have been.

     

     

    You can't have a premium brand experience if you want discount pricing. I do of course totally agree that you should therefore get a fantastic brand experience once you have invested in the product.

     

     

    Not at all criticising the content of your post - just offering another point of view.

     

     

    Over the last couple of years I have hd some great experiences from other brands - Audi took me VIP to Le Mans, Mercedes took me on a fantastic AMG track day. I have taken my own customers abroad, golfing, out for dinner, to various events, and I am looking to organise a factory tour - but all of this comes out of our only revenue which is the retail margin made from selling products.

     

     

    I do agree that the purchase of several items in order may merit a sweeter deal - although in my experience the bigger the system, the more the aftercare requirement.

     

     

    Let the debate begin! :)

     

    Speaking personally, I think this is a very good and very realistic post as regards the dealer/customer relationship and the cost/benefits of service.

    Some years ago, I worked in retail home electronics/computers, TVs, cameras etc, for one of the large national retail discount chains here in Australia

    At that level of operation, everything came down to ruthless price cutting, with the customers often straight out lying to the sales staff re prices they claimed they could get goods for from rival stores (we had the cost prices on the computer and every retailer bought from the same suppliers) through to staff trying to pull a swifty over the customer so as to raise their commission, or doing so because of pressure to do so from management, and staff ripping each other off to try and get the best commission.

    Lying and falsehoods re information given in both directions from customer to staff and vice versa was the order of the day.  If something broke, and you bought it back to the store, they in term would endeavour to wriggle out of warranty claims in any way possible, preferably by handing the matter over to the supplier/distributor/manufacturer.

    If you had bought a 'cheap and cheerful' imported brand and saved a few bucks, when the thing broke, you were often left up a creek without a paddle as regards dealing with a distributor/importer who had next to no warranty service/backup.  If you were VERY lucky, you'd get a new replacement, otherwise off to some backyard repair centre, from which you may not see your goods for a month or more, only to see it returned scratched and marked.  Lovely... 

    Personally, I absolutely abhor that sort of retail situaion both from a customer and staff perspective, and will have nothing to do with it, both from selling and/or buying.

    I tend these days to use the internet for pretty much all my purchases that can be delivered by mail or courier, as I've had it with the discount retail model.  I do my own accurate product research, find a fair price, and buy there, online.

    However, I do still enjoy retail shopping, but ONLY if it offers a quality experience, and one that I am more than happy to pay for.

    Hence I am happy to pay full ticket for top tier items, if the service and backup is there - it's a far nicer shopping/purchasing experience, and with the right manufacturer the backup is there if you need it.

    When I bought my Naim SBL's, I kept the dealer back to 10pm at night, finalising my then choice.  Having made a decision, I took him to a good restaurant next door and paid for dinner - the very least I could do for taking up his after hours time.

    It wasn't a cheap meal, but the service came back to me many times afterwards with little things, but important ones, for free.

    Personally, each to his own, and I am in no way criticising the OP, but I use the internet to do research and save money rather than go to dodgy discount retail stores; howevr for top tier items I shop retail, seek out and prefer to pay for commensurate top tier service, but that's just me!

    Best regards

    John... Cool

     

     

    No-one ever regretted buying quality.

  • 02-25-2012 12:03 AM In reply to

    Re: B&O pricing policy

    Don't get me wrong guys.  I did not mean to sound like I was unwilling to pay RRP for B&O or other similar premium brands.

    I totally respect the rigid pricing policy that B&O Australia enforces.  I am completely satisfied with the service that my chosen B&O dealer has provided.  They did not quibble about delivery and installation etc. and the manager even volunteered to visit my residence to ensure the systems are set up properly. 

    Thanks John for giving us some insight in the retailing.  I did not realise that its so cut throat.

     

     

     

  • 02-25-2012 3:34 AM In reply to

    • moxxey
    • Top 25 Contributor
    • Joined on 04-14-2007
    • South West, UK
    • Posts 2,360
    • Bronze Member

    Re: B&O pricing policy

    BangOFan:

    This rigid pricing policy seems to be common amongst some 'high end' brands in Australia, such as Miele appliances.

    Prices aren't as rigid in the UK, although we do suffer from constant price rises. You can regularly receive a 10% discount if you ask around. Problem is, this 10% may not come from your local dealer, so you need to weigh up whether it's worth the hassle trying to lose your relationship with your local dealer by buying from outside your area. I've done this a couple of times and then received a frosty reception from my local dealer! Understandable though.

    Many dealers have a lot of ex-demo stock that they reduce in price or you may be able to buy current demo equipment, discounted. My local dealer will regularly clear ex-demo stock and you can often get a 20% (or more) discount on some of these products. Sure they've been on display, but they are usually in an excellent condition

  • 02-25-2012 2:38 PM In reply to

    • Jeff
    • Not Ranked
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    • Joined on 03-01-2010
    • USA
    • Posts 48
    • Gold Member

    Re: B&O pricing policy

    John, your post also pretty well describes the cutthroat discount store world here in the US as well. Not fun and it always feels kind of slimy.

    When I got my Beosound and Beolabs, since I bought them from a large chain store, I managed to get some discounts. I bought the Beosound when they had a storewide "buy any receiver and get X% off" thing, so I saved a little on it. Got a better deal on the Labs, as they had a buy any speaker and get the 2nd at half price. I'm also sure that B&O didn't like seeing their items discounted, as with premium gear, it's hard to say it's worth X when people discount it, there is a perception of quality that is hard to maintain in that market.

    Back when I was in college was right at the end of the Fair Trade Act era, when manufacturers could absolutely control how much things cost, no discounts. So, in order to work deals most stores would have it so you buy a system, table, receiver, and speakers, for a discount, and they'd use a pair of "black box" speakers (that is speakers that are total crap and made by some junk speaker vendor, usually with a store name on them). If questioned they'd say the discount was on the speakers, not the other gear. Speakers would be something like 500 bucks retail but really cost like 40 dollars to buy.

    Then that era ended, and at the time the mass market gear like Pioneer and other imports would have a price sheet that said:

    Cost 10% 20% 30%......100% markup, you'd get a guy on the hook, pull your book and say, well, let's see what I can do here. Then you'd look serious like you were thinking, move your finger from the 100% "retail" cost, slide it down to like 60 or 50%, and say well I can sell it to you for this, if you buy today. I hated it.

    Cartridges always had huge markups, I bought a $125 Audio Technica for $25 bucks. That was about typical. These days since there are no cartridges sold, mostly, the huge profit items are wires.

    The good brands always had a max markup back then of 30-40%, which is about the minimum you really need as a dealer to pay for your overhead and keep the lights on and the sales help paid.
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