Samsung and Sony are instituting a new Unilateral Pricing Policy (UPP) that may just put the brakes on consumer "showrooming" and price matching by informing dealers what MAP (Minimum Advertised Price) that is allowed.
What this means is that the affected product cannot be advertised or sold below a price announced by the manufacturer. However, there is no restriction on how much above the MAP price the product can be sold for, and there is no signed agreement between the manufacturer and dealer that the product must be sold for a specific price. However, if a dealer advertises or sells the product below the MAP price, it risks losing its dealer association with the manufacturer.
It is interesting to point out that the MAP and Unilateral Pricing Policies being implemented by Samsung and Sony are legal, as the manufacturer and dealer do not conspire to set the actual prices for the products involved, and the dealer is not required by the manufacturer to sell the product for a specific price. However, if a dealer does advertise or sell the product for lower than the manufacturer's announced price, the manufacturer can simply stop shipping that product to the dealer, or discontinue its association with the dealer entirely.
Manufacturers can change their MAP pricing to adjust to market conditions as they see fit, such as holiday or special events, or end-of-cycle clearance sales. This gives dealers some flexibility for discounting, but reduces the variation in sales prices offered to consumers.
To boil this all down, consumers will see prices of some higher-end TVs from both Samsung and Sony in the coming weeks and months go up, in some cases substantially. On the other hand, prices for the affected TVs (and possibly other products to come) will be more consistent from dealer to dealer, lessening the need for as much comparison shopping on the part of consumers, as well as allowing smaller dealers to more easily compete with big-box and internet retailers.
For more on this development, read the report from HD Guru (who broke the story), as well as Custom Retailer, as well as an additional report posted by PC World on May 23, 2012.
Comments
In My Opinion, Samsung and Sony sales drop as a result of this action. Other manufacturers may follow this trend if they see some success by Samsung and/or Sony, or may their present practices to continue.
Local Governments and States are trying to tax Internet sales with small success and that, plus this development, will make shopping on the Internet interesting to say the least.
Big Box sales are higher for obvious reasons (overhead, taxes to name a couple). This is being combated by another trend that I read about. Smaller stores with reduced staff thus less cost.
Catalogs anyone?
Sony and Samsung`s proposed action of blackmailing the retailer from charging what he likes smacks of enforced retail price maintenance which by all accounts is illegal . This is the way that motor manufacturers
in South Africa keep the price of their products unrealistically high which
would never happen in the UK where there is more competition. In South Africa one pays a premium if you buy a Sony product…..in other words you are paying for the name and not necessarily for a better product.
Actually, as I pointed out in the article – this is not illegal in accordance with U.S. regulations – something similar to the Samsung and Sony system is already used by a few other manufacturers – such as Bose – to prevent their dealers from selling their products at heavily discounted prices. Also, keep in mind that it is not being implemented with all their products at this time – just some select higher-end TVs – although this may filter down to other products later.
Robert Silva
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This can actually be good for the consumer. Some club stores and mega retailers dictate how a product is built in order to be more competitive.In other words their buying power can force some manufacturers to use inferior parts, or delete features they deem unnecessary. These are commonly called derivative models. As to protecting the consumer? Do you one day want to wake up and find you can only buy a TV from Walmart or Sam’s Club? The small independent retailers still, in most cases, tend to offer the most knowledge and service.
One again big companies screw the buying public. I hope everyone avoids both of these brands until they end this practice
Both of my picture tube tv’s still work fine. =)
It’s called “price-fixing” and “collusion” by greedy a$$ Sony and Samsung. This crap should be illegal. Let the markets decide the price. Water rises to it’s own level…… so will competition.