Also if the units gets positive reviews . The dealers all get together and raise the retail price up 25% . That"s why for example Gato does direct sales cuts the price down 45% plus shipping .
MSRP, diferentiation and the illusion of value
I've been an audiophile for a very long time. I've gotten to listen to a wide variety of gear, and even participated in the creation and manufacture of some audio gear in my past. Took college courses in audio engineering I was not prepared for, and read quite a bit from the usual audio rags.
I want to share something I think every audiophile should know, which is how manufacturers leverage the suggested retail price (MSRP) as well as product differentiation to create this illusion of value.
A lot of gear sounds different. Cables are good examples. You make a cable which sounds different to a perceptive ear. It doesn't matter if it's better or worse, but just make it different, and raise the MSRP above other cables costing similar prices to manufacture. Throw on some connector jewelry and exotic fabric to dress them in and bam, your $1 to make cable just became $250.
My point is, too often audiophiles want to equate different sounding with better. If the MSRP is higher, well, that reinforces this idea that this difference must be going towards some illusory holy grail, floating above the tower of nuns. Another factor that benefits the seller is that we almost never ask ourselves how much this difference is worth. Lets accept that these cables, or speakers or amps are different sounding, and that you have judged that difference as preferable to what you wanted to buy when you started. How many of us step back and ask "is this difference worth the $$$ being asked?" Will it make my life that much better, or am I just bejeweling my sensual pleasures every chance I get?
I'm not begrudging anyone the right to spend money how they please. I do however think audiophiles who feel like they work hard for their money to stop and think about these natural forces when judging how they will spend it.
I want to share something I think every audiophile should know, which is how manufacturers leverage the suggested retail price (MSRP) as well as product differentiation to create this illusion of value.
A lot of gear sounds different. Cables are good examples. You make a cable which sounds different to a perceptive ear. It doesn't matter if it's better or worse, but just make it different, and raise the MSRP above other cables costing similar prices to manufacture. Throw on some connector jewelry and exotic fabric to dress them in and bam, your $1 to make cable just became $250.
My point is, too often audiophiles want to equate different sounding with better. If the MSRP is higher, well, that reinforces this idea that this difference must be going towards some illusory holy grail, floating above the tower of nuns. Another factor that benefits the seller is that we almost never ask ourselves how much this difference is worth. Lets accept that these cables, or speakers or amps are different sounding, and that you have judged that difference as preferable to what you wanted to buy when you started. How many of us step back and ask "is this difference worth the $$$ being asked?" Will it make my life that much better, or am I just bejeweling my sensual pleasures every chance I get?
I'm not begrudging anyone the right to spend money how they please. I do however think audiophiles who feel like they work hard for their money to stop and think about these natural forces when judging how they will spend it.
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Well then you act for yourself and save your judgements for those that will listen. I find this type of attitude far more evil than any economic excess. Who the hell are you to judge? Really easy to take other peoples money for social good, at least let those that your policies affect have the freedom to spend as they wish with what you have allowed them to keep. |
There are just a few OEM watch companies that make watch movements for most of the brands sold today. Well, don’t get me started on this one. I have owned a number of famous name Swiss watches. The most reliable and accurate one I ever owned was a late 1960’s Longines. The other 3 required numerous trips to the watchmaker. Both of my Seiko’s, the mechanical and solar/quartz have been more accurate and more reliable than any of the modern Swiss watches I have owned. As a result, if I want to buy a Swiss watch, I only buy vintage. More reliable, more accurate and a far better price point. Best, E |
Another factor to consider is how the component makes the buyer feel. There are several examples of buyers choosing to pay higher prices, or believing that a higher price implies better quality, because paying the price gratifies the buyer's ego. If one takes a few min for a web search, one can find reports from audio industry execs regarding the practice of raising prices, and repositioning the marketing of the line, then seeing sales volume increase because the perception of the line is now "better". The key to realize is nothing affecting sonic quality of the line was changed ! Only the price and marketing strategy ! I see this trend in other consumer spending areas. Wristwatches are a prime example. There are just a few OEM watch companies that make watch movements for most of the brands sold today. One can purchase 2 watches, 1 for $x and another for 2x the price of the first- and they will have the exact same movement inside ! Only difference is the case, and how the watch is perceived in the market ! Automobiles are a great example of brand management affecting price. A VW Touareg has the same engine, transmission and basic chassis as the Porsche Cayenne and Audi Q5/Q7, but had a substantially lower MSRP. It was made on the same assembly line as the other cars, but was sold with a lower level of accessory refinement. Mechanically it is the same car. But try telling that to someone who paid a dealer for the Porsche or Audi ! We have a Touareg, and use an independent German Car specialist for service. I asked the owner about differences in service requirements and repairs across the 3 models I referenced. He said basic replacement parts and service requirements are the same and part numbers are interchangeable. He also said he is able to charge more for some services, because Audi and especially Porsche owners expect to pay more than a VW owner for service and repair. Perception vs intrinsic value. |
I generally purchase used equipment. The secondary market allows most components to settle around their intrinsic value. A Dynaco ST-70 will never sell for the price of a McIntosh MC225, regardless of what a seller may think. Conditions are not the same in the new item retail market. Transparency is deliberately avoided because an opaque market benefits sellers more than buyers. I recall the TAG McLaren group purchased an audio company with an established line of components. The new owner commissioned new casework with thick metal faces, substantial metalwork, and shiny connectors. Looked great, and expensive. MSRP was 2x the price of the old units made by the company before it was purchased. Most reviews were favorable, and some were fawning. Then a reviewer opened up the brand new case and discovered the old component was literally bolted in place, with additional electrical connections to the new casework. TAG was forced to suspend sales of the model, and later sold off the audio company to another buyer, at a substantial loss. There was another company that tried to pull roughly the same stunt with a CD player and DAC, until they were exposed. And companies wonder why buyers are reluctant to pay MSRP ? |
@glupson Doesn’t it seem that Tekton owners often feel someone is after them, or their speakers? What is up with that? Any mention of Tekton and it flares up.It’s probably because of many posts from particular forum member whose speaker suggestion seems to default only to Tekton regardless of the audio chain components or what the audiophile is trying to achieve. Likely most of the resistance is from those who don’t believe in a one-size-fits-all. I heard the Tektons at RMAF. It sounds great for the money maybe even a bargain, but is rather large and appearance may be an acquired taste. |
erik_squires are you suggesting folks use the cost to justify an emotional decision? @mrklas Not justify it but to gauge it’s value, so that the value can be placed alongside other wants. If we used Freud’s terms (as commonly translated to English) to allow the superego a moment to check the id’s desire to bankrupt you. Best, Erik |
As Harry Haller in Hesse’ Steppenwolf listens to Mozart explain, after Mozart places a transistor radio playing Handel on the table (substitute “audiophile system” for “radio”): Please, no pathos, my friend! Anyway, did you observe the ritardando? An inspiration, eh? Yes, and now you tolerant man, let the sense of this ritardando touch you. Do you hear the basses? They stride like gods. And let this inspiration of old Handel penetrate your restless heart and give it peace. Just listen, you poor creature, listen without either pathos or mockery, while far away behind the veil of this hopelessly idiotic and ridiculous apparatus the form of this divine music passes by. Pay attention and you will learn something. Observe how this crazy funnel apparently does the most stupid, the most useless and the most damnable thing in the world. It takes hold of some music played where you please, without distinction, stupid and coarse, lamentably distorted, to boot, and chucks it into space to land where it has no business to be; and yet after all this it cannot destroy the original spirit of the music; it can only demonstrate its own senseless mechanism, its inane meddling and marring. Listen, then, you poor thing. Listen well. You have need of it. And now you hear not only a Handel who, disfigured by radio is, all the same, in this most ghastly of disguises still divine; you hear as well and you observe, most worthy sir, a most admirable symbol of all life. When you listen to radio you are a witness of the everlasting war between idea and appearance, between time and eternity, between the human and the divine. Exactly, my dear sir, as the radio for ten minutes together projects the most lovely music without regard into the most impossible places, into respectable drawing rooms and attics and into the midst of chattering, guzzling, yawning and sleeping listeners, and exactly as it strips the music of its sensuous beauty, spoils and scratches and be-slimes it and yet cannot altogether destroy its spirit, just so does life, the so-called reality, deal with the sublime picture-play of the world and make a hurley-burley of it. It makes its unappetizing tone—slime of the most magic orchestral music. Everywhere it obtrudes its mechanism, its activity, its dreary exigencies and vanity between the ideal and the real, between orchestra and ear. All life is so, my child, and we must let it be so; and, if we are not asses, laugh at it. This discussion/forum, reminds me of that passage…..in a good way! |
I don’t care what people think of my gear. It only has to please me. Everyone is entitled to their opinion. I don’t get why people trashing something bothers someone. I believe here it’s often because there is some financial interest to defend. Just try saying anything negative about expensive fuses. The natives get restless. Happens every time. |
I liked the mind visual of floating over the tower of nuns. That is why I asked. Seemed truly imaginative. It was, but not mine, all credit goes to Monty Python. https://www.imdb.com/title/tt0071853/ |
I think a lot of the difference might come down to the last 10% of performance. As noted, there is a steep climb in the lower price ranges of equipment in terms of sound quality. You can gain a lot in sound quality moving from a system that costs hundreds to a system that costs thousands. This is the appeal for many consumers, like myself, in investing in better equipment. But the point comes when spending more, even judiciously, results in little or no improvement. The question then becomes: How much more money is it worth to you to spend to get the last slivers of musical enjoyment? To some, the level is $10,000, to some the level is $30,000, and to some the level is $50,000 or more. As others expressed, I also have no problem with other people choosing to spend their money this way — it’s their money. If they think it is worth it, it is. And we each have our priorities, including things we spend money on. My advice to newbies (and I am one) is to spend their money on the most-bang-for-the-buck equipment they can afford. If that only amounts to $1,000 or $2,000 total, they have come further toward satisfaction than additional amounts will bring them. |
minorl I actually don't agree that Audiophiles don't give thought to the value (read, price) of equipment. They are very much aware of the value/price. Some either don't care, or the price is acceptable to them ...Exactly. It seems so obvious, yet it seems to drive some users here totally nuts. |
"If the latter is not an issue (or one is willing to part with whatever for the sake of the two formers), then the entire fruit stand is open to peruse." "...my speakers S.Q. listening choral music compare to a "tower of popes pleasuring each others"...."First tower of nuns and then fruit stands and popes. This is a great thread, indeed, More, please. |
Ha! Very true and well said.Great post in an interesting thread.... My system value is 500 bucks... I did not bought anything called an "upgrade" because of this S.Q. /value ratio... I decide to buy a vintage amplifier and very good vintage speakers and a bargain NOS dac... Never look back and i have no interest to read review because they dont make me dream anymore... When the piano is in your room 3-D it is enough....Thanks to mechanical,electrical and acoustical controls... my speakers S.Q. listening choral music compare to a "tower of popes pleasuring each others without nuns tough"....Anyway i will not upgrade to buy the nuns....Because this addition will mute some popes.... And the resulting sound will not be necessarily better....Only different.....Great thread!.... |
There is an economic concept that may fit this post - inverse elasticity of demand. Put a 6.00 price tag on a bottle of wine and folks will think it is awful and not buy it. Put a 30.00 price tag on the exact same bottle of wine and suddenly folks are talking about the wine's lovely bouquet and well-integrated tannins, and they buy it. |
@erik_squires Great topic… Ive spent a lot of money on audio, to learn I didn’t need to spend a lot of money …. That and I stopped reading stereophile … Along with over 50 years of experience in trying various combinations of equipment.. I found that buying descent gear allows one to buy and try more gear without losing much value. As much enjoyment and time I spend in this hobby, it’s a bargain at all the great musical moments it brings alive.. Priceless ! and time isn’t standing still.. Enjoy the music ! |
"...tower of nuns..." Having gone to a Catholic grade school, I snickered @ that, then remembered the scenes from the original Blues Brothers movie. Monty Python merely drove the spike deeper... Look, one’s choice of speakers really comes down to taste, preference, and budget. If the latter is not an issue (or one is willing to part with whatever for the sake of the two formers), then the entire fruit stand is open to peruse.. Sidestepping the ’performance’ vs. ’value’ discussion for a second, one will generally choose that which appeals to them on their personal scale of values. This can apply to not just speakers imho, but to equipment as well. I could be accused of ’tin ears’ (’midst other things) but I’ve noted greater differences between speakers than the equipment driving them. Since the bulk of equipment available notes ’specs’ that generally ’measure’ by whatever means to be in the fractions of a %.... I’ll note that again....Fractions of a Percent. Already 2 figures Behind the decimal point..... We’re now at the ’SS vs. Tubes Division’; ’crisp’ vs. ’warmth’ value split. One might base their speaker selection on what makes that choice appeal to them....and go forth from that. Now, let’s ignore for brevity the wire and cable conundrum....and the physics that gets discussed endlessly here and elsewhere. I’ll concede that there exists ’differences’ lurking in there....terribly subtle ones. You may note them; I rarely have. Of late...of self....negligible. We’ve now arrived at the performance space...i.e., Yours. (erik’s fav...just teasing, e....;)....) I have No Clue as to where you’ve plopped the stuff into. Most posted pics show your stuff...and the wall behind it. Rarely anything else...well, maybe the side walls, but.... I’ve been lucky (or doomed) to spend time away from my digs and equipment; span of time can be a week...or a month or 3... There always seems to be (for me) a Period of Readjustment for my ears and mind to ’recalibrate’ to that which I’ve been absent from. I suspect....that IF I was to visit Anyone’s else’s space and the equipment within that I’d experience something similar. Yup, I could be impressed...or not. It’s a high likelihood that I’m not going to experience or note what you’re so thrilled about. I will note a difference, But....perhaps, not the ’intended’ one(s)..... The differences are most likely in us....ergo, places like this.... The ’discussion’ continues....;) You are what you listen to. Carry on, J |
Ha! Very true and well said. For many decades I made wine professionally. It's very much the same in the wine biz. Every wine is at least somewhat different, but there is no objective or absolute standard of wine quality. (Defect, yes.) Since wine quality is almost entirely subjective, people, even professionals, often judge a wine's "quality" based on price. Some inexpensive wines are very good, even some Two (now Three) Buck Chuck. (Now THERE'S a story!) It's largely a matter of selling one's story to the customers and embellishing it with a fancy or unique label or bottle, then convincing them that the wine's difference somehow makes it special and uniquely desireable. Then, if the quantity is limited — this one barrel or this special vineyard — a talented vintner (vintner means "wine merchant," NOT winemaker...) can con an outrageous price out of a bamboozled consumer.Caveat emptor! |
I actually don't agree that Audiophiles don't give thought to the value (read, price) of equipment. They are very much aware of the value/price. Some either don't care, or the price is acceptable to them, or like me, they lose their @##?? mind on occasion and wake up the next day lying next to new "upgraded" equipment. The OP is actually correct that some determine that different is somehow better. Until after acquiring the new unit, they listened for a good while and realize that in actuality, the replaced piece was better. Some don't even know how to listen or what to listen for in order to determine "better". Some determine that changes in volume is "better" because they didn't match levels before doing their A/B comparison test. It is journey for each and every one of us. We live, we learn (hopefully) and try to enjoy this hobbie and the positive interactions with others in this difficult, confusing, fun, stupidly expensive and enjoyable hobbie. enjoy |
BTW: Anyone who wants to know how good Satori drivers are should consider this kit, from Madisound: https://www.madisoundspeakerstore.com/2-way-speaker-kits/copy-satori-ara-2-way-speaker-kit-pair-with... AFAIK though I've only seen Tekton use the Satori tweeters. This kit also uses the Satori mid-woofers as well which have a lot of care and high technology behind them. |
The Tekton driver's aren't that cheap. They are actually pretty good and I find the arrangement clever enough. It is a little derivative from a lot of other ideas, but what a great way to get a coaxial mid-tweeter. If the arrangement controls the dispersion appropriately so listeners get similar effects to ESLs or horns without the downsides then more power to them. I've never heard them, by the way, and I'm quite happy with my current set up. I'm just saying that this is an innovative and price appropriate design. |
Look you DO get a lot of speaker in terms of of size with Tekton per dollar, at least historically. Size does matter and can help make up for other things in some cases. Just another choice that is unique enough to stand out FBOFW especially if you are running tube amps where good choices are fewer and often but not always more expensive, being a niche market. Tekton is often a solid choice for tube amp owners with a limited budget for speakers. At least that is how I look at them. Probably not my first choice, but a solid one if a certain model floats one's boat. |
It goes the other way also Erik. You create a line of speakers based on very cheap drivers and enclosures in a unique pattern, then make up some totally ridiculous marketing hype and undercut the industries pricing. Price is king. If you can make people think they are getting a high tech piece for cheap dollars you can make a fortune. Tekton is a perfect example. |
I can't imagine why you'd think audiophiles don't already routinely ask themselves that basic question whenever they make a purchase, especially an expensive one. From reading the forums and interacting with others. It seems to me, as often as not, we get entranced by "different" and "better" without thought given to value. To some degree this is the nature of the beast. Being able to invest in audio gear is a luxury, even if it's just a boom box but stopping to think about relative merit is not a bad idea. |
