Pioneer's reply about price difference USA v Australia.

[blinky88]

The Pioneer 520H is much cheaper in the USA than it is in Australia, FACT.
**************************************
I sent the following message to Pioneer Aust:
I am anxious to find why this recorder is readily available in the USA for US$440 (AU$570) and in Australia the price is $899. I feel certain, if it was offered in Australia for the US price, there would be MANY people who would immediately buy including myself. It seems 'anyone' I speak to about this problem are saying Pioneer are treating Australians like ignorant mugs who either accept the price or decide on another brand to purchase. All of my gear is Pioneer as I believe they are superior products.
************************************************** ***
Their reply:

Hello Bob,

Thank you for email relating to the DVR520H, 80GB hard drive DVD recorder. I have consulted our Audio Video products manager, Tony Trent about your enquiry and he came back to me with the information below.

I think the information is fairly self explanatory and should serve to clarify any doubts you may have about the variation in price between both the Australian and USA model recorders. The pictures and pricing are taken from both the USA and Australian websites.

I think it is also worth mentioning that the USA model DVD players and recorders would be only be in the NTSC format. USA models would also require Region 1 software for playback, Australia is Region coded 4.

Please feel to contact us again should you have any further enquiries.

Regards,
Peter Mantell
Sales Support Manger
..and this..

Pete,

Great to hear from Bob, who by the sounds of his email, is enjoying his existing Pioneer equipment.

Hopefully I can put his mind at ease with this email. As can be seen from the website pictures below, the US equivalent of our DVR520H is currently priced at US$799. Converting this to Australian dollars (A$1035) shows it is very much in line with our Australian model (A$999).

It is our belief that at this price, the DVR520H offers amazing value for money and will certainly change the way you record, watch and archive television.

I would suggest that the people who maintain the US website Bob was looking at mistook the DVR-520H for the non Hard drive model which has a RRP of US$499.
******************************************
Absolutely unbelievable, they not only think we are mugs, they obviously believe we are uneducated mugs. Cannot believe so many USA businesses got it wrong.

Look at the prices on the linked pages and confirm the price I passed onto them should have been under US$400.

http://www0.shopping.com/xPC-Pioneer_DVR_520H_DVD_HDD_Recorder
and
http://www.ibuydigital.com/main.cfm?fuseaction=all.proPage&product_id=3363&CFID=66679&...TOKEN=17387110

[raffie]

Damn, @ $400 =~ €300 I'd have bought at least one. =) Where I live this model would be about € 700.

[Frobozz]

I think Pioneer's reply was fair. They are comparing their suggested list prices. Your complaint is that there apparently aren't dealers in Australia heavily discounting the 520 as there are in the U.S. If you compare authorized Pioneer dealers you'll find the 520s price to be $599 U.S. before it was cut for closeout (goodguys.com now has it for $449).

It would make sense to me that you should be able to find the 520 in Australia for the equivalent of about $500 U.S. if dealers are willing to sell on the margins there that they do here in the U.S. If not, there must be reasons (not necessarily Pioneer's fault) that your dealers require a larger margin.

[blinky88]

Frobozz,

Pioneer's answer to my enquiry was a personal insult, inferring I had mistakenly quoted the price of a Pioneer unit without HDD or the website where I got the price, got it wrong.

And your remark about retailers in Australia and their margins are off the planet. They are fighting and completing for every consumer dollar, it would be extremely hard for anyone to digest that their margin would be as you suggest.

Unless you or a member of your family are in some way affiliated with Pioneer, why would you defend Pioneer's price structure in Australia. I note you have a Pioneer 520H_S, however your location is not mentioned in your profile, I assume it is the USA and if that is so, why read a post meant to inform other Aussie members who may be interested in buying a 520H.

AGAIN, the reply from Pioneer was a PERSONAL INSULT to me, no doubt, they got a laugh at my expense.

[gshelley61]

While the competitive retail environment in Australia may be fierce, it is hard to imagine a market that is larger (in dollars) and more saturated with products than the U.S.

We have a population of more than 300 million people with a standard of living as high (or higher) than anywhere else... meaning that there is lots of disposable spending money here. The enormous number of retail outlets and online merchants, their size and overwhelming selection, and the shear volume of goods and services sold allow for economies of scale not possible in most other countries. This results in volume wholesale and retail discounting that can be very deep, depending on the specific product. Since these machines have to be tailored for each market and region (video standards are different, different packaging, country specific marketing efforts, etc.) the number of units manufactured for the U.S. is much higher than for any other country. Again, economies of scale.

Aussie electronics retailers probably can't buy the 520H built for your region anywhere near as low as Wal Mart or Best Buy can get the U.S. version for. Plus, the big box retailers here operate on extraordinarly thin margins due to their huge volume and stripped-down, mega-efficient business structure.

Even in Canada (25 million people), which is right next door to us and have the identical consumer electronics models as are in the U.S., prices are often significantly higher on some products because of the smaller volume wholesale and retail distribution system there.

[blinky88]

gshelley,

Well said, exactly the response Pioneer should have given (word for word), although that explaination does not make it any easier to digest, for us Aussie's. If you are not associated with Pioneer, those words together with your marketing expertise will certainly get you past the receptionist ..ie.. if your ever looking for new employment.

Regards,
Bob

[Frobozz]

Bob,

I sincerely apologize for not appreciating the insult you felt by Pioneer's response, particularly their obvious ignorance in the closing paragraph.

I have no connection to Pioneer and I'm in the U.S. Sorry for adding to your upset with my own ignorance.

[gshelley61]

gshelley,

Well said, exactly the response Pioneer should have given (word for word), although that explaination does not make it any easier to digest, for us Aussie's. If you are not associated with Pioneer, those words together with your marketing expertise will certainly get you past the receptionist ..ie.. if your ever looking for new employment.

Regards,
Bob

What's really a pain is this DVD region crap. By forcing the manufacturers to design and build slightly different versions of their machines to be able to operate properly in specific regions and countries, there is unneccessary added cost involved. The Chinese manufacturers will often ignore this and sell region free/multi-region units that handle both NTSC and PAL, or they make it easy to hack them to do so. The name brand companies like Pioneer comply with the rules of the DVD Forum and it is not always very easy to find good hacks for their machines.

Maybe you could get one of these:
http://welectronics.com/dvd/pioneer/PIONEER_DVR-520H-S.HTML
http://www.codefreedvd.com/dvd_pioneer520h.htm

[offline]

Bob,

While gshelley61 is not wrong, inherent efficiencies in the supply and distribution chain of such a world product make it difficult to account for such a price variance between countries.

In other words gshelly61 is being country specific, yet the 520H is a global product. Parts are most likely sort from Ireland, the US, Korea and Tiwan. They would then be shipped for assembly in China - I suspect.

There would only be a few base models for the whole world. I'd guess two for the NTSC world and one for the PAL/SECAM world. These would be further split into more models as printed certification, power lead and packaging requirements, vary between countries. Even then, most models would be packed for multi country distribution (i.e. foreign languages on packaging and in manual etc.)

Now gshelly61's argument comes into effect but the greatest economies of scale have already been set in the manufacture and world wide distribution. You can bet your bottom dollar that Pioneer will sell bulk wholesale at a near identical price per unit to every major (country) distributor.

Also, while the US might have a powerful economy and a large population, this actually acts against them in many instances and can force the price up. The larger number of competing wholesalers means less product per wholesaler per capita, and the price per unit is higher. This is just one example.

Sure there are plenty of savings via the US discount chains, as much of their efforts tend to be spent on competing with each other and reducing their margins to levels that would bankrupt an Australian equivalent. However these savings are in domestic retail terms only and therefore, for electronic consumer goods, the savings for retail buyers are not super significant over time. Low world wide margins, mostly forced by reducing product cycles, also help keep consumer electronics prices low.

A reduced market and reduced competition allows the Australian retailer to demand and get higher
margins. Early adopters will get hit with these prices. Over time, however, sales pressures will force prices quickly down. With consumer electronics, it can take anywhere from six to slightly over 12 months (in Oz)

Eventually the price difference between a world product sold in the US and one sold in Australia can be measured in almost exchange rate differences only. This is a fact unless the manufacturer can artificially keep the price high. There are numerous tricks for this – see Sony as they are the masters

The Pioneer 520H is not a new product by any means, so it should be cheaper than it is. Pioneer's Australian RRP, like their email, is utter B**S.

[gshelley61]

Bob,

While gshelley61 is not wrong, inherent efficiencies in the supply and distribution chain of such a world product make it difficult to account for such a price variance between countries.

The Pioneer 520H is not a new product by any means, so it should be cheaper than it is. Pioneer's Australian RRP, like their email, is utter B**S.

Totally agree. While marketing the 520H may have some additional built in costs associated with the specifics of the Australian wholesale/retail distribution system, the difference is too much for that to be the primary reason the retail prices are so high.

[offline]

What's really a pain is this DVD region crap. By forcing the manufacturers to design and build slightly different versions of their machines to be able to operate properly in specific regions and countries, there is unneccessary added cost

You have that the wrong way around. It makes them
money. Region settings are firmware based, no
hardware changes are necessary. You are also forced
to buy in bulk via Pioneer's approved and more
expensive supply channel to get the region setting unit (often a single cd or usb like memory device)

Otherwise every man and his dog would be heading
for the cheapest place to buy such dvd players
in bulk (this happens to be the Arab emirates) and
then resell them lower prices and higher margins.

DVD region encoding makes companies money
by allowing them to artificially segment the world
market. That was the whole idea

[blinky88]

In response to all members who have made comments, I can honestly say, had Pioneer responded as gshelley did, I have responded with this reply.
"There are more countries throughout the world using PAL than there are using NTFS, one can only assume they would be manufacturing more PAL units than NTFS". That alone indicates the units should be a similar price around the globe.

That said, I did like gshelley's approach by comparison to the reply I received from Pioneer. I was really OFFENDED being treated like a goose and p---ed off by their pityful statement that the retailer and myself got it wrong, obviously not the type of reply one would expect from senior management of an International Company. Product knowledge is a critical aspect in marketing, they should have known the numbers, how many units are manufactured in PAL format compared to those produced in the NTFS format. As I said earlier, their reply was thoughtless and not worthy of the simple question I asked. At least gshelley did give some thought to his statement and submitted a reasonable arguement which I thought was well written.

I know the 420H was selling for US$250 (AU$320) because an American friend (Steve) purchased one, by comparison, the 320H (no HDD) is selling in Australia for AU$499, this should be absolutely and positively unacceptable to all Australian consumers.

I have been one of the greatest supporters of Pioneer, all of my friends have bought Pioneer on my recommendation because I have told them they are the best. With the present asking price of the 520H, I will recommending they look for an alternative. As for me, I guess I will eventually buy second hand unit off ebay as I really do want the 520H_S.

I would like to take this opportunity to thank all members regardless of their origin who responded to my post, the majority of remarks on the subject seem to agree with my initial accessment of the situation.

[RabidDog]

they're ripping you off good and proper, matey. They are treating the ozzies like a bunch of crims!
The only answer is not to buy the stuff.. and anything that sells for £399 or £499 is obviously at an artificial price point.. its called selling for what the market will bear (capitalism) . Now if they brought back communism, none of this wouild be a problem.

[gshelley61]

Now if they brought back communism, none of this wouild be a problem.

[vitualis]

blinky, I think that us Aussies simply have to face the fact that we have a smaller internal market. Retailers can charge more and they do.

I suppose Pioneer is simply putting it politely that if you don't like the price to not buy their product.

Regards.

[blinky88]

vitualis,

You must be wealthy or maybe still living with your patents, no consumer would be happy about paying a penalty of 90% over and above the asking price of the same item being sold elsewhere.

NTSC: is the standard in the following countries;
Canada, Bahamas, Barbados, Bermuda's, Canada, Korea, Japan, Mexico, Peru, Philippines, Taiwan, Trinidad, Venezuela and the USA.

PAL\Secam: is the standard for the rest of the world, predominantly PAL, I can only assume there would be substantially more PAL units being manufactured than NTSC and if that is in fact true, the difference in manufacturing costs of both units would be insufficient. As far as the various region changes of the PAL system that is as 'offline' explained earlier * "DVD region encoding makes companies money by allowing them to artificially segment the world market" * and that statement is spot on. Region change is solely a software issue, not hardware related.

I think it is abundantly clear consumers today 'worldwide' have to take an entirely different view and stop buying products according to the name, a substantial amount of the asking price is for the name tag. As far as the RRP goes, that has proven to be an extremely successful marketing tool over the years but in today's world, does it really mean anything to anyone, when was the last time anyone you know actually paid the RRP. In my opinion, the RRP is a deliberately inflated price set by the manufacturer to allow the retailer to obtain the best price he can for an item and it also confirms to the customer, he has been given a substantial discount when the retailer refers to the RRP. The only price anyone should be considering is the street price, when was the last time you saw anyone pay the RRP, to be truthful, it's hard to believe that marketing ploy has been so successful, for so many years.

Many International Corporations assembly lines are based in China, India or Asia.

Something selling in the US or elsewhere for a nominated street price, that item should be able to be bought in other countries for a similar price.

Before my early forced retirement, everything I purchased were top dollar items, today my thinking has changed ..eg.. I have a Yamaha DVD player (AU$499) that needs to be serviced and after giving some thought to the possible cost of that service, I opted to buy a Tevion DVD player for AU$79 (made in China). This is the first time I have ever had a change of attitude and was shocked to discover the performance of the Tevion is equivalent to the Yamaha and the Tevion has many great features not available in the Yamaha. It wasn't all that long ago Japanese automobiles were considered to be inferior, today we know the truth. Looking at the Tevion I bought, I will not be shocked if the Chinese manufacturing plants have a big share of the market.

It's hard to give up habits formed over a lifetime, I guess one could liken it to giving up smoking.

Having said that, I will adopt that attitude from here on and get the Pioneer off my mind. I will wait for a unit made in China (hopefully Tevion) with the features I consider necessary and selling at an affordable price .... looking at today's marketplace, I don't think I will have to wait long.

If all consumers around the world adopted that strategy, we would see a different approach once the big boys bottom line started to fall.

You know, this discussion has really made me take a good look at the habits I have formed over a lifetime, its been great to sit back and see things as they really are.

Thanks to all who have made a contribution on this subject, your comments helped me see the light .... appreciated.

[adam]

There are all kinds of expenses behind the scenes that the consumer doesn't know about. Maybe their factory is in the US and it costs them an extra $100 per unit just to get it to Australia. Maybe their Australian distributors and resellers charge higher commissions. Maybe shipping within Australia costs more per shipment. Maybe the goods contain parts originating from country X and Australia has imposed large Customs duties on all parts from this country, and the US hasn't. Maybe Australia has certain laws which complicate the legality of the product's uses and this requires additional legal expenses and additional insurance coverage. For example in the US these kinds of recorders are legally barred from being sued for contributory copyright infringement. I know Australia's copyright laws are generally much stricter than the US's, so that alone could easily increase the costs associated with these devices by quite a bit.

It is logistically impossible to ensure a worldwide standard price for anything except for global commodities (ie: gold). It never happens...and that is even assuming they wanted to make things even.

Price is a product of supply and demand, and that's all there is to it. If they can charge more in any given market then they will. It can be very disgruntling for particular buyers in particular markets, but its just something you live with. I'm sure there are certain products that are much cheaper in your country than in the United States.

[TBoneit]

If I were to guess the reason it could easily be import duties. That would take some research to verify what the Australian vs Unitred States Custom tariffs are.

My second guess would be shipping costs. I suspect that the US has low costs to ship from wholesale to retail outlets compared to many countrys. I can send a 1 nor 2 pound package approx 3000 miles from where I sit right now very cheaply if I'm not in a hurry for approx US$5.00. East coast to West Coast.

Cheers

[vitualis]

As stated above.

There are a lot of behind the scenes costs before the retail price. Australia's small market doesn't help to bring down costs associated with transportation.

Not everything can be blamed on the manufacturer. And let us not forget that prices are determined by the local supply and demand.

Suggestions? Research your options well and purchase a cheap/no-name branded unit with good reviews on the net.

Regards.

[offline]

Sure, supply and demand may allow Pioneer to set this price point in the short term, but Aussies aren't mugs.

I doubt Pioneer can account for the current price difference imo. Remember, this is not a car we talking about, with heavy fixed and variable costs.

Market size and logistic differences between Oz and the US do not account for the difference. I have a little bit of experience in importing consumer electronics - enough to spot a cash cow being milked!

[sapiendut]

I work for one of those A/V giants (no, not Pioneer).

At any given time, our cost is determined by the mother company. Many times, our (Canadian) wholesale prices are HIGHER than American street price. Do we like it? no. Can we do anything about it? Unfortunately, no.

[blinky88]

There are no import duties or tarrifs on electrical goods into Australia since the Govt. managed to be elected introducing a goods and services tax (GST) of 10%. I really can understand Americans taking up Pioneers cause as they really get to buy at a reasonable price ..but.. I find it difficult to understand comments made by Vitualis who is an Aussie. They are simply charging well over the price they are prepared to accept elsewhere, hard to understand their reasons for such a price difference.

Every Aussie reading this thread and wanting to purchase a Pioneer should feel insulted by the explanation I was given, it was a poor effort quoting the inflated RRP in both countries.

I e-mailed the links given earlier to the person who replied to my question, obviously he hasn't bothered to reply, I guess he didn't have much to say.

[vitualis]

Look blinky, it isn't really that hard to understand. Pioneer charges a higher price because they can. As I stated before, supply and demand also affects prices, not just the cost of production.

I don't condone what they are doing but I can understand it.

Want to rebel against the system? Then lower the demand by not buying Pioneer products, which is what I stated before. Otherwise, we just have to live with the fact that we live in a capitalist society.

Regards.

[adam]

I don't think anyone has taken up Pioneer's cause. We are simply trying to explain to you why there might be a price difference. I honstly thought it should go without mention that getting a product to an American market is fundamentally and logistically different than getting it to an Australian market.

[blinky88]

It has been bought to my attention a majority of Pioneer's production line is in China. There are no additional costs that could create such a price difference. Freight costs to the USA compared to Australia would not be a factor.

You don't have to be a rocket scientist to know Australian's are being penalised and if you cannot see that, maybe you should have spent more time in college.

This is positively my last comment on the subject, I dislike getting involved in an arguement with those who simply do not have the ability to make constructive statements of fact and continue with a load of absolute BS.

The reply from Pioneer does not in any way reflect statements made by some members in this thread. They said the retailers in the USA and myself got it wrong which is a load BS ..and.. is a direct insult to ones intelligence, perhaps you should look at their reply again. Could be, their reply is well above someone with your IQ or perhaps you simply did not take the time to read their reply.

[thor300]

I dont know about Australia, but i thought its quite similar to Western Europe, meaning comprehensive warranty and no restocking fees. I cant even buy a 320 for the US price of a 520, but i CAN buy one and keep it for 2 weeks, burn the box it came in, record as much as i can and then return it after 2 weeks with no questions asked and full refund of the money. Things like that make certain products more expensive.

[adam]

I was suggesting possibilities that could account for some of the price difference. Some, all, or none of what I said may actually apply to this production line. I don't know and I never professed to know. I was not supporting or condoning Pioneer's actual practices or their response to you.

Its obvious you were turned off by Pioneer's treatment of you so much that you only came here to critize them. That's perfectly fine.

But some of us were actually trying to answer the question that you posed to Pioneer. Even if that's not what you were looking for, that's no reason to get angry and its certainly no reason to resort to petty insults.

[SCDVD]

Manufacturers aren't altruistic operations that stay up at night trying to be "fair". They sell products at the highest price that is consistant with their marketing strategy and competitive forces in the market. Ususally the competitive price forces are greater in larger markets. They get a higher price in Australia because they can. It has nothing to do with region codes or PAL etc. If you would like to see an even worse example of this "get what you can get" market strategy, take a look at what people have to pay for DVD media in New Zealand. It is so high that many people buy it online from the US despite the shipping costs to New Zealand.

[vitualis]

As per adam.

I don't particular care about the response you got from Pioneer. That was a simple PR answer and I fail to see why you are getting so worked up about it. Don't like the price? Then don't buy the product!

Before you go around questioning other people's intellegence, perhaps you should have a look at your own. You are basically griping about about a company not selling a product to you at the price you want. Pioneer have the right to charge whatever the hell they want. The price they do charge is dictated by supply and demand. That is simple economics. For example, trading cards cost cents to make but rare ones can sell for hundreds of dollars.

It all however goes back down to the market. If you don't like Pioneer's pricing scheme or you think that Pioneer is insulting your intellegence then don't buy their product.

Stop whinging.

Regards.

[RabidDog]

or even your intelligence