Variable pricing

["Andy Gough, x4-2906, pager 420-2284, CH2-59" <AGOUGH%FAB6@sc.intel.com>]

Date: Tue, 18 Dec 90 14:40:53 PST
From: derek%sunstroke@sdsu.edu (Derek Langsford)
Subject: Survey results and draft letter to EMI


>Below the results is a draft letter I propose to send to Mr. Steve Davis, 
>Product Manager at EMI London.  I am sure all of you will not agree with what 
>I have said.  If you have any suggestions to make, please email me.  The 
>letter will not be mailed until after New Year as I will be away for a week 
>from Thursday and I have too much to do before then.  It will also give some 
>of you time to respond.    

[...]

>preposterous.  A similar situation exists in the USA.  The cost to US dealers 
>is approximately $125 (#64) meaning profit margins for the sellers are 
>sometimes close to 100%.  I realise this is largely a function of the market 
>place.  I personally believe that the music industry has been exploiting CD 
>customers in the UK with higher than necessary prices : the Kate Bush Boxed 
>Set continues this practice.  I have seen UK manufactured discs sell for under 
>$12 in the USA at full retail price whereas in the UK they sell for #12.  The 
>difference is clearly not related to production or shipping costs.  The only 
>justification for such prices is because it is what the market will bare.  I 
>personally believe consumers deserve more respect.

     Well, I know what he's going to say about the U.S. prices anyhow.  It is 
illegal under the anti-trust laws for a manufacturer to set the retail prices 
for its products.  So the retailer is free to set whatever price he can get 
away with.  Manufacturers try to get around this in various ways, the primary 
one being the printing of a "Manufacturer's Suggested Retail Price" on the 
package.
     So EMI has no control over the price in the U.S..  In other countries
they probably do.  
     You also say, "The only justification for such prices is because it is
what the market will bare.  I personally believe that consumers deserve more
respect."  I wonder what alternative to the free market system you are
proposing?  If you were EMI, or an owner of a record store, what policy would
you use to price the box set?  Would you sell them for $125 when you could 
sell just as many for $175?

-andy