Subject:
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Re: What Kids really want. Not Juniorization.
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Newsgroups:
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lugnet.general
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Date:
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Wed, 14 Mar 2001 20:44:18 GMT
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Viewed:
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573 times
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(bits snipped for brevity)
In lugnet.general, Mike Petrucelli writes:
> In lugnet.lego.direct, Kevin Johnston writes:
> > In lugnet.lego.direct, Mike Petrucelli writes:
> > > Ok you missed my original point. Bulk tub prices are an acurate reflection
> > > of material costs. Actual sets from both Mega Blocks and Lego have added
> > > printing and R&D costs. So why the huge price difference.
> >
> > Hmmm, I don't agree that bulk prices are an accurate reflection of pure
> > material costs. For one thing, there's the manufacturing costs-- Lego
> > bricks have superior (and more consistent) binding performance.
>
> OK. I committed treason and bought one of the neon color MB tubs. The binding
> performance while less powerful than Lego was totally consistant.
My most recent clone purchase (if anyone repeats that I'll deny it :-) ) was the
Blue Thunder Pro Builder set (blue & yellow jet plane). The inconsistency I
experienced (which I haven't seen change much over time) was primarily between
bricks and plates, and plates and plates. The tail section and wings of the
plane are quite fragile.
> ... I fully
> belive that the differnce in quality at this point in time is directly related
> to the different types of plastic and nothing else.
Well, I disagree, based on my experiences as noted above-- buy a Pro Builder set
and LMK how it goes. Lego's manufacturing tolerances are still better as far as
I'm concerned (though I have experienced some annoyances in this area as well,
like the pieces that that make up the arms on the Pit Droids not staying on
well).
> ... That is a big
> improvement for Mega Blocks. (now I have a moral delemia about wheather or not
> I want to spend a decent portion of my Lego budget on grey Mega Blocks. The
> quality is more than sufficent for my needs. <sigh>)
Yep, I have to agree-- for bulk quantity of ordinary gray bricks, a Battleship
or three is a great bargain.
> > There are other, less tangible costs: Lego advertises, MB does not (not in any
> > significant way that I'm aware of, anyway). One could argue that MB
> > essentially trades on Lego's brand to get better consumer awareness--
> > effectively getting a negative cost in its column.
>
> That is a cost not related to materials but will affect set cost slightly.
> (More than likely adding less than a dollar to any given set. You forget it is
> distributed over all sets not just one.)
No, I didn't forget-- almost commented on that in fact (specifically, that Lego
primarily advertises themes, not bulk tubs). Regardless, it all adds up--
manufacturing, advertising... my point was (addressing yours) that I don't think
the bulk tubs are pure, direct material cost comparisons.
> > Besides-- Lego *actually lost money* last year. The money went somewhere-- I
> > don't think there's much argument in that. You might pick a bone over how
> > they spend their money, and whether it's on things that you as a consumer are
> > willing to foot the bill for (as I would), but I just don't see how their
> > actual losses (2000, and 1998) jibes with an outrageously high profit
> > margin (including a profit from clearanced overstock).
>
> How about R&D for products of inferior quality that no one wants.
Heh. I'm with ya. :)
> ... The
> pathetic software/games stick out in my mind. They also have to recoup
> the inital creation of new molds.
Then there's the theme parks, clothing, and other dubious investments. It would
be very interesting to find out how much all that stuff cost (and how much/
little it made for the company....)
> > > ... Simply put we are
> > > paying for the name and nothing more.
> > >
> > > -Mike Petrucelli
> >
> > While I do think there's some merit to the general argument (the brand itself
> > adds cost to the product), I just don't believe Lego's profit margins are
> > *that* high. They wouldn't be in the position they're in now if they were.
> >
> > Kevin
>
> As an assistant Manager at KB I know for a fact that at least 40 percent of the
> cost is retail markup. TLC's profit margins are not that high unless you go
> through Shop at Home.
Are you sure? I would expect Lego's profit margins to retailers ARE in the
range of 30-50% (I think most manufacturing outfits make more like 75-100%,
correct? it's a high-margin business).
> ... If they stop wasting money on things kids do not want from them, maybe they
> will start turning a profit again..
A most excellent summary of their current position...
Kevin
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Message has 1 Reply:
 | | Re: What Kids really want. Not Juniorization.
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| (...) binding (...) the (...) related (...) Ok. I couldn't help myself, I purchased a Battleship and an Aircraft Carrier. In those sets the plates are just as consistent as the bricks. I found 4 1x1 cylinders that didn't grip very well but there (...) (24 years ago, 14-Mar-01, to lugnet.general)
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Message is in Reply To:
| | Re: What Kids really want. Not Juniorization.
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| (...) of (...) printing (...) material (...) OK. I committed treason and bought one of the neon color MB tubs. The binding performance while less powerful than Lego was totally consistant. I fully belive that the differnce in quality at this point (...) (24 years ago, 14-Mar-01, to lugnet.general)
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