Subject:
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Re: train windows
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Newsgroups:
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lugnet.lego.direct
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Date:
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Mon, 26 Jun 2000 15:20:06 GMT
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Viewed:
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1300 times
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In lugnet.lego.direct, Paul Baulch writes:
>
> Larry Pieniazek wrote in message ...
> > - low variable cost
> > - gives a good enough return on investment that when you factor in the
> > qualitative marketing benefits it's a good business decision (it doesn't • have
> > to match the quant best IRR the company can get, it just shouldn't LOSE • money).
> >
>
> That's fair enough, but I can't help wondering whether they're trying to
> market to the mundanes anyway. And how exactly does _our_ Lego expenditure
> compare to that of the mundanes? Is it comparable? Does anyone have hard
> data?
TLC does or would if they'd do a little anaylsis. I don't think anyone else
does. I've heard a lot of numbers batted around. I'd be surprised if we were
less than .5% of the total and very surprised if we were more than 10%...
But that is an estimate for TOTAL expenditure. I would expect we're 80% of the
total LD sales so far. And so should we remain. That's my thesis. Run LD to
maximize the qualitative benefits of catering to us, we're just getting rolling
and getting better at wowing mundanes. Just make sure not to actually LOSE
money. Wowing mundanes is worth a lot more (in the long run) than the 50 cents
each (if you're lucky) you'd make selling parts to them.
> That would certainly be so. All I have is speculation.... I always thought
> that the logistics of bagging and carting elements would be the real killer
> financially, but I guess that's not necessarily true if they're
> automatically bagged off the conveyor belts and all bags are shipped
> directly to LD's warehouse... what other possible logistical processes would
> operate here?
Fixed cost savings from using standard element descriptions on pages that refer
to LDrawn images revolve around how fast you can get pages up.
Variable costs revolve around reducing the volume and duration of calls to
order (while still getting the same order volume), and the volume and duration
of calls to handle returns, and the volume of returns.
These are all sort of, but not exactly, logistical processes. Remember that
cost structure has to include overhead and it has to include all the processes
... pre-marketing, catalog/site production, ordertaking and returns, not just
manufacturing and shipping.
++Lar
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Message is in Reply To:
 | | Re: train windows
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| Larry Pieniazek wrote in message ... (...) limited (...) want (...) and do (...) have (...) money). (...) That's fair enough, but I can't help wondering whether they're trying to market to the mundanes anyway. And how exactly does _our_ Lego (...) (24 years ago, 26-Jun-00, to lugnet.lego.direct)
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