Gear Talk > Canon General

Canon's Minimum Advertising Price to go into effect Nov 1

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BL:

--- Quote ---"Canon to Begin Crackdown on Minimum Advertised Pricing Tomorrow, November 1

Canon will begin cracking down on minimum advertised pricing (MAP) starting tomorrow, Nov 1. The retail prices for several DSLR cameras as well as some lenses will be changing significantly. If you plan on buying a DSLR camera in the near future, I suggest buying it now."

The-Digital-Picture.com
--- End quote ---

http://www.the-digital-picture.com/canon-news/

I must be missing something here or perhaps I don't understand the idea behind MAP.

What on earth would incent a retailer to carry Canon gear if they have no control over the pricing of their inventory? 

robbymack:
Everyone does it. If you want to carry their gear (what camera store wouldn't want to carry cannon?) then you agree to their terms. Ever seen the new pair of Nike sneakers priced differently at different stores...nope. Generally it applies to a few items and sets a floor. Not sure if it applies to the electronic store fronts which is why you see deals pop up on eBay etc however I assume those agreements have been modified in the digital age to include those so my guess is there will not be any more stellar deals coming from authorized sellers, everything now will be grey market.

DB:

--- Quote from: BL on October 31, 2012, 06:31:08 PM ---
--- Quote ---"Canon to Begin Crackdown on Minimum Advertised Pricing Tomorrow, November 1

Canon will begin cracking down on minimum advertised pricing (MAP) starting tomorrow, Nov 1. The retail prices for several DSLR cameras as well as some lenses will be changing significantly. If you plan on buying a DSLR camera in the near future, I suggest buying it now."

The-Digital-Picture.com
--- End quote ---

http://www.the-digital-picture.com/canon-news/

I must be missing something here or perhaps I don't understand the idea behind MAP.

What on earth would incent a retailer to carry Canon gear if they have no control over the pricing of their inventory?

--- End quote ---


This is what Mercedes-Benz has been doing for decades to preserve 'Residual Values' (which in turn allow for new premium prices too). Ask any Merc dealer who strayed from this policy - they lost their franchise!

What you are missing is that this is a Manufacturers Recommended Selling Price (MRSP). All corporations spend money on R&D, Marketing, Advertising, Production (COSTS basically) so they wish to maximize their REVENUE - the best way to do that given a fixed amount of SUPPLY => fix PRICES. It is called control. It is also basic marketing theory - company sets the price not the customer (nor any wholesaler or distributor). This is marketing 101, never ever let the consumer dictate price to the manufacturer. Canon designs and produces the product, that gives them the right to insist on a minimum new price.

Preemptive note: before some naiive bright spark decides to respond with elementary (as in elementary school or high school) economics regarding SUPPLY & DEMAND, let me first say that there is no one magic equilibrium point where these are supposed to meet (there are in fact multiple equilibrium points based on a plethora of factors). Suffice it to say, Canon cannot determine or control 'Demand' (that depends on what consumers wish to spend and what they can afford to at any given time), but they can shape 'Supply'. Part of their supply strategy is predicated on an assumed selling price. Hence the control policy.

Postcript: if B&H or Adorama wish to sell for instance the new 6D for $999 (hypothetical illustration) then by Christmas Day they would no longer be a seller of any Canon products - Canon would refuse to supply them for undermining their products. Canon would be absolutely right to do so too. It is their prerogative.

If any of you disagree with this policy, you can invest a couple of billion dollars of your own money and compete with Canon, Nikon, Sony, Pentax etc.

curtisnull:
Well, this really sucks. I was just getting ready to buy a 135mm f/2.0L lens. B&H had it yesterday (10/30/12) for $879 with the rebate. Now WITH the rebate it is $989.

DB:

--- Quote from: curtisnull on October 31, 2012, 09:48:21 PM ---Well, this really sucks. I was just getting ready to buy a 135mm f/2.0L lens. B&H had it yesterday (10/30/12) for $879 with the rebate. Now WITH the rebate it is $989.

--- End quote ---

Yeah, but if you buy it at the higher price, you will also be able to resell it at a higher price in the future (than if you'd bought it at the special discounted price) - or at least you will be unwilling to let it go too cheap, plus any potential buyer will have to buy off you or go to a store and pay the high new selling price. It is all relative.

The 35mm f/2L is a superb piece of glass that will always have a high resale value, so if you kept it for 2 years then sold it for $200 less than you paid for it - it has cost you $2 per week. Forget amortizing it over the medium term, think about it as an investment in a 'real asset'.

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