Originally Posted by specuvestor
A genuine question rogo:
How do you come to the figure 65k @$4500? I mean really... instead of "25,000 from 73x, 5,000 from Elite, 35,000 from competitors". What competitors?
Did you used Kuro as a dirty reference for the price-demand? I seriously think NOBODY really knows the price elasticity. If true then I think Sammy & LG would be very tempted to do this already, and Sharp would have done it 3 years ago. We're actually in no man's land here...
So Spec, I have an advanced degree in a business-related field from a reasonably well-regarded institution of higher learning. What I can tell you from my learnings in that field is that marketing is both part art and part science.
Sharp does not exist in a vaccuum. By selling at $3000 and $7500, they lose very nearly every sale that would exist between about $4000 and $6500 to competitors. Those people opt out of Sharp because they have it in their mind to spend that kind of money, but Sharp offers they no product.
The only reason they don't lose 100% of those sales is because Sharp offers the only 70" on the market, which is why I credit 25K of the sales to the low-end Sharp. These are buyers that would normally want a $4000 (or so) TV, Sharp doesn't sell one, but these people want big and so they buy this "low end" Sharp that is big and are OK with it. They would gladly have paid Sharp more, but they couldn't.
In the meantime, there is some large pool of buyers that is seeking alternatives today. They find their way over to Panasonic to buy the VT30 for $4299. They buy the Samsung 65D8000. They are super excited by the fact that Sony's 65HX729 is in the marketplace now and will be more excited by the 65HX929. These are customers that are simply opting out of Sharp.
If Sharp had product in their price range, Sharp would get customer wins there. Can I actually state it's 40,000 such customers? Of course I can't. But I can reasonably guesstimate it is. It's certainly a multiple of the people who'd buy the Elite for $7500-8500. Is that 2x? 3x? 5x? But because Sharp would have a third product tier it could satisfy an entire class of customer it cannot even reach with the current strategy
I get that AVSers don't entirely appreciate the way "normal" people shop. But they go to stores or log onto the web and look for things to buy. Most of them go to stores when they are buying TVs. They have some number in mind for what they'll spend before they even start, usually anchored by a previous purchase, an advertisement, a friend, their bank account, their bonus, their net worth, some combination of all of these. People are often willing to spend some amount and will find a product that fits their spending band, rather than spending what it takes to get some arbitrary product
This is especially true for a brand like Sharp, whose mind share has not been lower in the LCD era. 2010 was a bad year for Sharp and they've had to fight and claw to get back into the forefront. The inexpensive 70" has been their greatest weapon to do that. But normally, it would have a companion TV that retailers could upsell to for interested buyers. Typically, you'd be able to take any pool of people looking at the cheapest model and move somewhere between about 15-35% to the upsell model. That model does not exist for Sharp. (Note, the $200 upsell from 732 to 734 is so bizarre, I don't even want to get into how pointless it is. It's embarrassingly bad marketing in that it serves only to confuse customers.)
When customers are confronted with a $3000 Sharp and a smaller but more expensive Panasonic or Samsung, their mind naturally starts asking: "What is better about those?" And salespeople are happy to answer. They do this for reasons nefarious and honest. And honestly, a number of those people came in thinking it was going to cost them $4000 and, well, something must be wrong with that $3000 TV and they aren't going to buy it.
This is really the way the world works. It's why Kia or Hyundia can't charge $10,000 less than Audi, build a comparable car and just take all of Audi's sales (there are things about Audis that are obviously better than those cars, but the point is, the would-be Audi buyer is not actually looking to save $10,000, they are looking for a car they perceive to be worth $40,000
). If you follow the strategy of the Koreans, they've tried to build better cars over time and slowly raise prices to make more money while also increasing the perception they are better cars. It's a cycle for them.
Sharp failed a very basic lesson here. I'm sorry, but they did. Again, we can quibble over exactly whether or not I'm right on the specific numbers. But I'm right on two things:
1) Some portion of 73x buyers would have paid $1000 more for a TV that would've cost Sharp $100-200 more. And the loss of Elite sales would've been minimal to zero.
2) Some portion of Samsung/Sony/Panasonic/LG buyers who won't buy Sharp would've bought Sharp if there was a genuine offering in the $4500 price band (+/-).
And in the end, Sharp would've made more money and sold more total units and gotten more evangelists in a year where all three of those are pretty essential to their future.