Originally Posted by Radio_head
My first question is: what have/will they lose in market share and market penetration with regard to the higher end models for which they are enforcing their MAP?
Possibly. They wouldn't do it though if they were experiencing sales slumps - the recent explosion of higher end headphones means they will sell more. And for those who don't want to go stat, the HD800 especially does things no other headphone does.
My focus is on the HD 518 through the HD 650--what Senn calls entry and mid level audiophile cans. I don't know what kind of explosion Senn had without their sales & historical sales numbers. I'm not at all sure that the youth market buying Beats and the like applies to open headphones sold by Senn. Regardless, the market told us what the value of the Senn line was for each model. Senn had decided to price all these cans above that level and mandate that above market prices be enforced. Setting and enforcing prices above market is a damn good strategy for reducing sales and market share. Senn is the big dog in the fight, not a Grado with limited market share and production ability.
My second question is: is Senn nuts [x 2] initiating this during the worst recession of my nearly six decade life?!
Remember that during this recession the high-end headphone market has blossomed, possibly in part due to its relative cheapness compared to 2 channel setups. Again, it's a boom market in an overall recession.
How do you know this with regard to the Senn products we're talking about? Even if true at any level, part of that success was based on the prior pricing structure (or lack thereof). Jacking up prices to artificially high levels is a great way to kill any bloom.
In addition the HD 518 through 650 are gateway cans to there most expensive and (I dare to guess) their most profitable cans. Less gateway cans sold almost certainly means less high end cans sold over time.
Possibly. Its a good point and one I would assume they thought about long and hard before enforcing this policy. One possibility is that outside of Head-Fi, those are not "gateway cans." If a speaker guy or a pro audio guy is looking for a great pair of cans, they don't necessarily start with the 600's and go up - they'd go straight to the 800 more often than you realize.
Senn clearly thinks they are gateway cans. That's how they have structure their product lines. Brand and sound signature loyalty, especially at these levels can be very powerful. Ask Grado about it.
I think they run the danger of losing a generation of beginning audiophiles by pricing the HD 5x8 line as high as they have. Just lowering the MAP price (assuming they will continue this madness) by $20 on each of these cans would be a big help.
They probably wouldn't have a problem with retailers lowering by that much except then where does it end - so they make a blanket rule to enforce MAP.
Sure they do. If not they could have structured their MAP with price flexibility within certain ranges (e.g. this headphone can be sold between $110 and $135; that one for $140 to $175) for each individual product and/or line. We have not seen that. Every body's charging the same price almost 100% of the time.
I'd very much l like to know Senn's business plan and reasons for going to this hard enforced MAP--including the timing of it.
I don't think it was a coincidence that they released the HD800 at about the same time as they started enforcing MAP. The "luxury" tag was reserved for STAX, Grado, and some AT (at least that's how I remember it.) Sennheiser wanted to be perceived that way as well.
The HD 518 is a long way from the HD 800. If the HD 518, why not the HD 201, which they don't MAP the same way? Putting an artificially high price tag on a product, especially one that sold for far less just a short time ago, tells your customers that you think they are fools or zombies. What do you think this has done to the market competitiveness to the HD 598 and especially HD 600 and HD 650? They are no longer very special in the new price bracket that Senn has placed them. They were before. You don't have to do any of this to have a MAP for "super premium" products above the the HD 650. Besides Senn was already seen as a "luxury" headphone maker, but that does not mean that it's entire line is. Everyone knows it's not. That's why the old and successful GM had both Cadillac and Chevy--and Pontiac, Olds & Buick stratified in between.
In summary, the current Senn MAP, as applied to the HD 518 through HD 650, is a poor decision and likely to lose them sales and market share. It has already POed more than a few customers, which even by itself has a cost.