Subject:
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Re: Article text
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Newsgroups:
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lugnet.general
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Date:
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Mon, 1 Mar 2004 16:02:53 GMT
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Viewed:
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845 times
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In lugnet.general, David Laswell wrote:
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In lugnet.general, Ken Nagel wrote:
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The store only sells merchandise. If it’s not selling then somebody is doing
a pretty poor job of marketing it.
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That’s not always true. Ever heard of something called the Law of Supply and
Demand? Demand has dropped because all of the people who absolutely had to
buy it did. Then the people who kinda had to buy it did. Then the people
who sorta wanted to buy it did. Finally, people who were holding out until
it hit clearance prices did. The market for the original Hogwarts has shrunk
dramatically, whether you’re willing to admit it or not. A brand-new
Hogwarts will enjoy the benefit of an mostly-unsaturated market. Yes, there
will be people who tell their kids that they already have a Hogwarts Castle
and don’t need another, but there is no way on earth, short of selling it at
reduced price, that the original Hogwarts could possibly outsell a refreshed
Hogwarts in 2004.
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Of corse I’ve heard of supply & demand. I’m the first to admit the castle sales
slowed. That left Lego with two choices... 1)redesign the set 2)increase the
demand. One of these choices is signifgantly more costly. Since they are whining
about monetary loses the sensible thing to do would have been to make more
people aware of the original product thus increasing the demand.
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So you think that maximizing the profit on a single set makes more sense than
maximizing the profit of the company as a whole? Why not switch over to only
producing new sets for a given theme every three years? That way you can
make sure that every possible customer will have a shot at buying one. Of
course, all of the “buy everything” customers will buy 1/3rd as much stuff,
but who cares? It’s all about making sure that there’s not one unsatiated
customer left on the face of the earth, even if it requires calling every
family and asking them if they still need a copy.
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You don’t seem to know as much about business as you think you do. Keeping the
original set would have greatly increased the profit margin while all the new
surrounding sets would have kept the buy everything crowd ocupied. I don’t think
saving themselves from a very poor marketing plan would require calling every
family.
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You can can argue this but it’s foolish as by Lego’s own admission they are
failures at making a profit with licenced lines.
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Show me concrete proof of that statement
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http://news.lugnet.com/general/?n=44690
“profits stagnated because of the higher cost of producing the new products. The
company now plans to stop making the electronics and movie tie-in products...”
Concrete enough?-Ken
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Message has 1 Reply:
 | | Re: Article text
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| (...) Both cost considerable amounts of money. In fact, I'd be surprised if designing a new Hogwarts didn't cost significantly less than a huge advertising campaign would (and anything less isn't going to have the impact that you seem to desire). (...) (20 years ago, 1-Mar-04, to lugnet.general, FTX)
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Message is in Reply To:
| | Re: Article text
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| (...) That's not always true. Ever heard of something called the Law of Supply and Demand? Demand has dropped because all of the people who absolutely had to buy it did. Then the people who kinda had to buy it did. Then the people who sorta wanted (...) (20 years ago, 1-Mar-04, to lugnet.general, FTX)
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