When is too much, too much

[Chad Seibel 2]

OK, here is a topic, that I have for you guys. Bauer is now selling their new Total One skate for $800 beaners. That is a lot of dough. Now the skate looks great and may perform like a dream, I do not know. I will take Bauer at their "word" because I do believe they have an excellent R&D department and have a lot of great people that know what they are doing.

All that said, how much will be too much. Alot of people are complaining that it is too much money for a skate. Personally I would agree, but I do not complain, I simply do not buy it. Take cars for example, I really love Porsche's, but I do not think you will see one in my driveway beside my Mazda anytime soon. I do not sit and complain that I cannot afford it or that it is too much, I simply live life driving what I drive.

Another example for this topic is laundry detergent, that's right detergent, I am still a man if I talk about this right. Anyways, we buy detergent from Costco that is about $13 for 110 loads and right beside it is Tide for $19 for 110 loads. Why would you buy Tide when the cheaper brand is right beside it and I have done tests at home, (alright my wife did, but I believe her) and the clothes come out identical.

I propose that if Tour decided to do an experiment where we put everything into a skate that we could in terms of R&D and materials and sold it for say $199.99, where we break even or lose money for the purpose of science, and had a lesser skate in terms of materials and R&D for a price of $399.99, that players would still buy according to price point and our history of sales numbers would not be impacted too much. Meaning I think we would sell relatively the same amount of skates at each price point that we historically did, even though the lower model was better by far.

My topic question is this; Does the price of products cause you to believe that that product must be the best product and the company that has the highest price product is the market leader?

[Neo5370 132]

I think a lot of the ideas behind this discussion can be found in the ice hockey forum re: price of sticks.

If I remember correctly, it comes down to what customers are willing to pay, and since high end sporting goods are essentially a luxury, the target market usu. is capable and willing to spend.

[yrhmblnr8r 69]

In a marketing class years ago we reviewed a case study on laundry detergent. The company put the exact same detergent in two different boxes. One had triangles on the front, the other had squares. Then they sent each box home with testers. Each time the testers said that one box worked much better than the other. I'm willing to bet there are people at Costco who swear that the Tide works better.

IMHO $800 is a ridiculous price for skates. However, I'm a beer leaguer who topped out in Bantam as a kid. Someone playing serious competitive hockey might be able to justify the cost. That said, I'd snatch them up if I found a pro-stock pair or last year's model on deep discount because I want to try the stronger/faster/lighter skate just as much as the next gear whore.

[Rick 0]

I'm cheap when it comes to equipment but I usually try to buy the best gear I can afford at closeout prices. For example a couple of years ago I bought a pair of CCM Vector 8.0 skates on closeout for less than $100 dollars. I mounted my Sprung chassis myself and for next to nothing I had some high quality skates.

Rick

[Neo5370 132]

Pricing Strategy as a Marketing Tool: It Works.

http://www.netmba.com/marketing/pricing/

Sorry, my original reply sort of missed the mark. Anyhow the short answer is yes. About mid-way down the page in the above link is list of pricing strategies.

Psychological testing is so prevelant and accepted it is an actual category/theory/tool taught in business school.

I completely believe that it works. It doesn't have to be logical, it only has to influence perception which can be based on everything from sentiment, emotion, to preconeived notions, and fuzzy logic.

People just assume that the more something costs, the better it is IN GENERAL.

Elitism:

Consider this as well.....

.....if someone were watching you make the choice, you might not want to look cheap.

Fact is, again luxury product --> target market --> whether they know the product is overpriced it becomes a status symbol to have the most expensive.

This is only strengthened by marketing of image.

Tour: Don't Try to Buck the Trend:

I hate to say it, but even if you guys produce a really great skate, but only charge $199.99 for it, you won't make a lot of money.

The only way this can happen is if you can overcome the psych. effect of overpricing.

This can happen in 2 ways.

1) The skate is so revolutionary, so fantastic, so INCREDIBLY obvious to users that they realize it is "underpriced."

2) You can actually prove to the consumer maybe via a very aggressive marketing campaign that shows how much more went into your skate vs. the $800 skate. This is much riskier, because the burden of proof is on you. It's not automaticc like in the above example.

I sense that you would want to do a good thing by giving us consumers a lot of value for our dollar which is a breath of fresh air. Thanks for even considering it!

However, I think absent extraordinary cirucmstances you'll either break even or be in the red.

I concede that I do not know how much it would cost and what your profit margin would be cut down to.

If anythying you'll end up losing the "elite buyer" market and gain the "value buyer" market.

In other words you'll become Hyundai. Not a bad thing. Just not fancy i.e. BMW. Your execs have to decide what field they wanna play in.

Because at the end of the day if you sell a bajillion skates at $200 a pop and Bauer sells far fewer units at $800 a pop, your bottom lines might look the same.

It'll just come down to which market you think is buying. We're in a bad economy right now. Your idea could work, until people start getting more spending money. Then image will be important again; gotta keep up w/ the Joneses don'tcha know. :)

[lampliter87 8]

I don't think I (or my parents for most of my career) have ever paid full price for a pair of skates. I've always bought last year's top of the line on sale when new product is released. I needed new skates at the beginning of the year, so as the X:60's were being released I was ordering XXXX's on sale.

[althoma1 574]

Yes, a higher price definitely does give the impression that it's a better product. As far as when is too much, too much? Well, it's only too much when the target market refuses to pay that much and the company doesn't cover their costs.

I doubt the target market is your average beer league player. It's more likely parents with enough disposable income to spend thousands for their kids to play competitive travel hockey. Of course, advertising and promotional material will also be aimed at those kids to they can hound their parents to buy those skates.

Personally, $800 is way more than I'll pay for skates. I read reviews here, get feedback, look at product catalogues and try on items I'm interested in when I get the opportunity. Then, when I have the opportunity to pick up those items for a good price (on sale, closeout, used, ect.) I do so. Occassionally, I'll make an exception and pick up something I want at full price, but it's rare (Sprungs and the Cascade M11 are two instances that come to mind).

I'm glad some people are willing to pay top dollar for the latest products. That encourages companies to spend on R&D and to innovate. I can then usually pick up the products I want at the right price if I'm patient. I would definitely buy a product that was released at a lower price point, but had high end specs and I'm sure many others here would as well, but the target market for the high end products would really have to be convinced that it was better. It's easier to convince little Johnny AAA and his parents that an $800 skate is the best, than to produce a better skate and sell it for $300 and prove it's better.

[the_game 452]

To add to Chad's car analogy...I'm pretty sure even if I had the money to afford a Porsche or some other car in that stratosphere, I am taking that car for a test drive to make absolutely sure it performs like it should and then some. And even after that, for the price I am getting the color I want, options, etc.

That being said, 800 bucks for a pair of skates I can only try on? I don't think so. Bauer is asking me to fork out almost a thousand dollars to merely try on a skate that is not baked to fully conform and fit to my foot, and then complete this transaction without ever seeing/feeling how it performs, no way. OK, so I can go by other people's reviews, opinions, and the tech specs of the skate, but for the price I cannot justify that purchase without trying the product first hand. And honestly, how much technology can be in the skate that makes me, Joe 'Beer-Leaguer', that much faster, agile, etc.? I can't imagine a parent buying these skates for little Johnny 'going to the nhl' when the kid will grow out of them in a season or so.

I think the fact of the matter is with the Total One, Bauer went out and created a revolutionary product that is meant for a certain demographic which I am clearly not in. Is it too much for some people, yeah probably a lot of people...but at the same time it is enough for someone trying to get to the next level or someone willing to spend the money.

Too much, will never be enough...We've become a society and culture that embraces pushing the limits. Technology, sports, you name it. We should probably get used to $800 top of the line skates.

[sdcopp 1]

I'd say it depends on what perception of value you are trying to impress upon your customers. Bauer is in the position where they have already created their image of value for their products, starting at the NHL level which feeds the Pro X is wearing/using this so it must be the best. MSH is a small sampling, and loaded with users that I'd say are higher spenders than the average player walking into a local shop.

Marketing works for better and for worse. Take a look at the Bauer 9900 vs Easton S19 helmet video being discussed in ice right now. To the average player or parent who sees that it creates an immediate sense of value for the 9900 over the S19. A lot of the average consumers out there don't understand the difference between VN foam vs EPP vs FXPP vs whatever other material you want to throw into a helmet and market as a "better" material. The associated buzzwords around these materials is what sells them. Same thing for sticks, skates, etc.

On the other hand, being a "value" brand is not a bad thing either, as long as the business can be sustained and grown profitably. People may always chase bigger/better/faster/more, but they're always looking for the best deal too (shining examples above). Moreso in a rough economy, people want the most bang for their buck. My first "good" pair of skates was a TR8000 boot on a Final Factor chassis. After getting the chassis, wheels and bearing I wanted I didn't have a ton of money leftover. My options were a really low end ice boot like a CCM Rapide, a Riedell system 2 boot or the TR8000. There was NO competition in that decision as the TR8000 boot was far and away the better boot at the price range, and I didn't feel like sinking $300-$450 into the upper end Riedell boots (even if the kangaroo liner in the TP Air boot was the best liner ever imo). I was not the only person I knew either that went to the TR8000 because pound for pound it was a far better boot.

For the companies that do raise the pricepoints, they have to bring something to the table to justify it to the consumers. The One100 skate is essentially the same as the One95 skate and the price went down. The TotalOne skate has lighter weight, performance "enhancing" tongue inserts, "better" liner, etc. that sets itself as that next step up. But there is the law of diminishing returns constantly pushing price point higher, eventually only a very few will be able to afford "top-end" and everyone else will look at what is the best value for what they can afford.

To use the car examples again, Toyota Corolla isn't the best selling car ever because it tried to compete with the Ferrari's and Porsche's of the world. It got there just being the Corolla. The look has changed, the tech has changed but it has always been a value first product in the auto market.

[furlanitalia 1]

I think what also needs to be recognized here is that the one100 is a top of the line skate, and coming in at about the same price as the one95's did a couple years ago. What's makes this scenario so unique is that the totalone is in a class of its own. I can bet a lot of high end youth players will the buy the one100, just like they bought the one95. The totalone is a foray into uncharted waters and I guess we'll just have to see if it works out (in the market).

[MIAPlayer 0]

What I find the most important factor is really being comfortable. Being comfortable in the skate, but more importantly being comfortable with the brand. Because if I'm comfortable with a brand I know I'm getting the best bang for my buck and therefore am more likely to buy their products. For example I am comfortable in Missions because I have been skating on them all my life. While I would like to try a Tour skate with the Hummer chassis, I recently bought a new skate, and no offense Chad, but I felt skeptical about trying something new because if it doesn't work out, then I'm in the hole (I ended up getting some Mission Soldier SE's over the Bauer RX25 and the Tour Code Carbon Pro but kinda regretting that a bit). So if I have been skating on Bauers for a while and was comfortable with the brand and knew what I was getting was top of the line, then it would justify shelling out $800.

[Fire0nIce228 1]

I'm with the segment of people who buy last years or 2 years agos top of the line stuff when it goes to the cheap. Hell I'm still skating in a pair of Vapor XX that were top of the line what...6 years ago now?

I can't fathom spending a thousand dollars on a pair of skates but soon we will see it. I personally believe that skills make you better not skates. Are joe beer leaguer and his buddies going to be infinetly better in these new skates...in my opinion absolutely not. They'll be lucky to see a marginal increase. If I slapped on some TOs right now coming from my XX would I substantially notice improvement in my game, probably not. To me, that marginal increase is not worth the price, but again I don't have disposable income like that to throw around, nor was I raised to spend money that way. Now for premier talents in the world, your pros, does that slight margin give them an advantage worth paying for, it probably absolutely does, but only at the highest levels in the game.

Theres nothing better than seeing the guy with the old junk equipment flat out beat the guy with brand new top of the line everything. Skill and hardwork trump the gear everytime. Invest that thousand dollars into a powerskating class if you want to be a better skater.

[retroXvertigo 4]

One guy on my team was talking about how awesome they looked the other night. By the look in his eyes I won't be surprised to see him wearing them at the rink soon.

I'm currently wearing the 2009 U+ pros that I got for $200.

I'm all about last years good stuff on clearance. Unless it has a nike swoosh on it, as we all know about how much weight and drag that adds to any piece of gear.

[Scotty 8]

It all comes down to pricing, marketing, and demand strategies. Basically, if there are a decent amount of people willing to pay a given price for a hockey product, it will be produced. Remember when the Synergy started at $149 and people were outraged? Then the same as the prices eventually went up to $240 for the S19s, but they're still flying off the shelves because there will always be a market. They may not make you play better, but they'll make you feel better, more confident, and give you that prestige of owning it.

I think prices on everything in society has become ridiculous, but there isn't much you can do about it.

[TLR156 0]

Someone may have already touched on this, I didn't read all the responses above.

You probably would sell more of the expensive lesser quality boots than the top of the line discount priced ones because of marketing.

Marketing dollars are generally thrown at the highest priced models, so the hype created gears people to believe that those are the products they want / need.

You don't see Bauer throwing money around to promote the Supreme One 60, or the Vapor X20, those dollars go the the Total One & X:60.

The other big issue at hand is that (at least in my area) the only source of info to be had about any hockey related products at the LHS is usually the word / opinion of whatever high-schooler can be bothered to walk over & talk to you, or the occasional video display installed by the local brand representative (again, with marketing geared towards the top of the line product, where the less expensive models are mentioned either as footnotes, or not at all). It's not like there are charts or even tags on the displays / items that list the features of particular models for you to compare. If you want any real info, you have to research it yourself. To that end, the average consumer is standing there in the store with the sales guy saying "yeah, this is our best boot / skate / stick / whatever", & it's going to be the most expensive one every time.

My personal bet is that this has something to do with higher profit margins on the most expensive items, I mean is there really a $270 difference in materials & manufacturing between the Bauer Vapor X:40 & X:60? Methinks the real price difference is advertising.

[vnderachiever 3]

i'd say tour would make money that way to be honest. i see alot of people just buynig what they can get with their budget aka "i have 500 dollars, these skates are 450 plus tax, ill take em"

[Invert 13]

It depends really, is the product really a $700 product? Or are you just pricing it at $700 just to be "competitive" with the $700 skate. A good example of this is the OPS market. There is plenty of product that tries to keep pace with the Warrior, Easton, & Bauer sticks but comes nowhere close in performance. CCM/Reebok, & Sherwood were two big names trying to charge premium prices for their "competitive" product. The O stick was an abysmal failure and hated by many, there are still tons of RM19's and U+'s collecting dust at my LHS that nobody wants, even on clearance.

People will pay for a quality product, but don't try to keep up with the jones just for appearance. It actually has to be quality.

[mug25 2]

I'd never spend over $500 for a pair of skates. In fact, the closest I've ever come to that mark is $400 USD. Let's say that when I do have a son and when he gets into Hockey — and let's just say he gets good enough to wear he's potentially going to get a college scholarship for Hockey, sure...I'd buy him a pair of $800 skates so as long as they can be justified, as in do they really boost his skating that much over a pair of $500 skates?

[start_today 769]

I think there's also something to say for wide name-brand recognition. I bet a lot of people only marginally interested in hockey prodcuts (say, parents with extra money, or people who can afford to overpay for hockey equipment without really doing research) have heard of bauer because they've been around so long and because they have enough money to pay for more placement and adds. Tour (for example, you can pick someone else) doesn't have that recognition. There are no tour ads in nhl arenas, and not as many other players wearing tour equipment.

People are willing to pay extra for something from larger companies than smaller ones, particularly if they can see other people are paying that much for stuff. Bauer can get away with charging that much simply because it's Bauer and people will buy on name alone. In terms of actual technology, Tour is right there with bauer (if not ahead, considering that lots of people think the Tour chassis is better), but I doubt Joe Dad will buy his son/daughter $800 tour skates because he doesn't recognize the name as quickly.

[althoma1 574]

There's definitely something to be said for brand recognition. I think Bauer can get away with an $800 skate, but it wouldn't fly with a company with less brand recognition unless they had a tonne of expert, media, and player support. KOR had a great product in my opinion, but it was tough for retailers to move them because the brand recognition wasn't there. There was a bit of media coverage, but not a lot of advertising and no NHL prescence.

Years ago, Mission released the Carbster helmet. A product that was arguably more protective and better in some respects than competitors if it fit your head properly, but most people weren't ready to pay $200 for a Mission helmet (the fact that it wasn't adjustable and it either fit or didn't, didn't help either). Years later, people did pay around $200 (in Canada) for the RBK 8K that was supported by more advertising and NHL use and this year Easton is selling another $200 helmet in the S19 that's also being supported by advertising and NHL player use.

So in order to sell a good volume of product at a high price point brand recognition and good marketing is definitely essential. You can't just slap a high price tag on an product that isn't well known and expect it to sell because people will percieve it's the best due to the high price point.

Bauer's potential for success with the TotalOne is high because they have great brand recogonition, spend significant advertising dollars, and have great NHL prescence. Plus, the early reviews of the product itself are promising.