Patrick
35
luxury goods inelastic
Generally, luxury goods are seen as price inelastic. In some instances price increases can actually lead to increased demand, the perception being that the goods are more exclusive and therefore more desirable.
I suspect that the Swatch group believes that maintaining the integrity of the value of their timepieces and therefore their brand is worth more to them than any incremental sales they may get by having their goods widely available at discount prices.
If I'm honest and think about my own opinions of brands that are available at a small fraction of MSRP I must admit to having a bias.
I won't name any examples of the above, but I think most would probably agree that the companies that have succeeded in this area (Rolex, Patek, Panerai) have an enviable position.
-Patrick
Update on a case on the grey market before the US Supreme Court involving Costco and Omega
On Bloomberg news: www.bloomberg.com - SJX
I think the responsibility is on Omega. How did they end up with such difference in pricin
? Exchange rates aside but 33% of the RRP difference is a huge amount. They should have better pricing allocation. On another note, it also goes to show how much discount (at least) Omega is able to give to the retailers/distributors and how certain folks...
I think the report glosses over the price differential, which is largely the same
in terms of dealer cost in relation of discount to retail price, generally speaking. There cost differences are minimal, perhaps 40-50% below retail rather than 40 vs 70% as the report implies. The differences arise due to exchange rates, different dealer...
If Omega wins, they may regret it.
They're trying to raise the effective price of their watches, but if they succeed, they may find that they won't sell at the higher prices.
luxury goods inelastic
Generally, luxury goods are seen as price inelastic. In some instances price increases can actually lead to increased demand, the perception being that the goods are more exclusive and therefore more desirable. I suspect that the Swatch group believes tha...
I am afraid I m with omega on this one
The copyright holder AND manufacturer should have direct control of the pricing of their goods. This is not a case of a copyright holder outsourcing to some manufacturer who could manufacture on a cheaper scale elsewhere and re-import similar goods. This ...
don't forget
Omega is fully responsible for flooding the market with (overstock) watches in the first place. --Sancerre
this confuses me slightly for the following reason
i presume Omega have already sold these watches to dealers worldwide for the price they wanted. the fact that they have effectively forced dealers to buy more than they can sell is their problem. the only way the dealers can offload this unsold stock is t...
But there is no mention
Of whether these watches are sold to non US ADs who bought them 1)for their domestic consumption solely, then re export them because there is a price arbitrage 2) whther these were forced down the throats of overseas ADs which result in a overstocked situ...
A Policy Perspective
Please for a moment forget about territorial pricing, though of course that appears to be behind the dispute at hand. An arguably legitimate policy perspective behind the position taken by Omega in this dispute is this: If a copyright (or trademark) holde...
Another perspective....
The regulation of domestic policy should be one for governments. If Omega exports direct to a foreign market, then it is its responsibility to ensure foreign requirements are met. If a middleman exports and neglects to meet these requirements, then it is ...
Yesss!
Absolutely agreed with you. As long as Costco legally bought those watches, let it sells them at whatever price it deems reasonable. cen@jkt
Interesting.
SJX, thanks. I've made a few notes below. I don't think we're fully engaging, though. Your arguments seem largely in favor of the free market. I'm not necessarily opposed. I merely wanted to present, in the abstract, potential public policy rationale in f...
now...what if Costco decides to sell ABOVE list price?
and they sell a product that is exactly from Omega's international catalogue and/or website that states its available in all/most countries. would that lawsuit be relevent?