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How Much Are You Paying For Electronics Labels?
An anonymous reader writes "Interesting article on CNET about different consumer electronics brands selling identical OEM products, often at wildly different price points. The author also examines the phenomenon of manufacturers releasing "consumer" and "industrial" versions of the same product -- with the cheaper version aimed at businesses. Probably old news for the slashdot crowd, but it's worth reading to see how much Middle America is overpaying. Caveat emptor, indeed." And there are also product lines where the expensive version is aimed at business buyers, because a higher price implies greater credibility.
VCRs were one of the first I heard about to do this... one motherboard, vendors enable the features that they want for each model, depending on their marketing strategy.
The poweredge 400sc is the same as their top of the line Dimension model bit in a less flashy case. The Poweredge in a minimum configuration costs about 349$ The Dimension you can't get for cheaper than about $1000. They do the same (or at least did) with their laptops. My Inspiron 4100 has been reflashed (by me) with the Latituce C610 bios so I can use the docking stations (with pci slots). Dells precision line is the same as well. Their precision notebooks are latitudes and inspirons but with a FireGL or Quadro card (which you can order separately from dell and stick in your laptop yourself) The desktop precision systems are the same as well. Just a Optiplex or Dimension with a good video card.
another big example is Alienware, but its Sager Notebooks who create the laptops for them.
A friend of mine worked in a factory that made liquid soap. She ran a bottling machine. She said there would be batches of hundreds of bottles at a time. Each batch would have a different label, and would sell at a different price in the store. But they were filling them with the same slop from the same tank.
Unknown host pong.
Ever notice that competing businesses often locate next to each other? This is not so much to take business away from the other, but it's been found that the appearance of competition drives sales, so they both get more business than if they located seperately. The ultimate example of this is the shopping mall.
Ever notice "clumps" of shoe stores at the mall? They're often owned by the same company to imply competition between them when there isn't any really.
The implication of competition drives sales so they set up the implication artificially.
Proctor & Gamble are masters of working this, many cleaning products advertised as being better than the other are the same except for their packaging and a difference in the food coloring added, and the same as a bargain brand for a fraction the cost.
And the same as the "house" brand at a fraction of that cost.
KFG
Ever wonder why Radio Smack stopped carying its "Optimous" brand of stereo and AV equiptment? It was all made by RCA. Now, they just cary the RCA brand on the shelves.
Isnt this like the whole "Frosted Mini-Wheats" VS. "Frosted Mini-Spooners" (Brand X) debate? I think a Kroger grocery store billboard in Richmond VA put it best. There is a picture of a field of String Peas plants on a farm. In the middle is a LARGE string pea sliced open. On the left is an arrow pointing to the top pea in the pod which says "National Brand" while the pea in the middle has an arrow on the right pointing to it which says "Kroger Brand".
Not too off-topic: I tried to convince my CIO that we could save money by using 7-Zip instead of licensing Winzip (not at the point to recommend Open Office or Linux yet) and he turned it down because "Winzip is the trusted name in ZIP compression", WTF, its actually PK's format! Dont even get me started on his views of PDFCreator vs. Acrobat.
Im dreaming ofa big bndwdth, That can resist the
They also do this with multiple product numbers/SKUs within the same brand.
Those ads in the sunday paper where they promise to give you the product free/10% cash back/whatever if you find the same product at a competitor for less? They can do this because the manufacturers make essentially identical products but sell them with different model numbers to competing electronics stores -- so the models are unique to the chain carrying them. Usually this is called price protection and it's something the supplier will often guarantee in a specific market.
This stuff doesn't bother me nearly as much as companies that cash in on their brand name with inferior products -- I've had a couple major-label DVD players that barf during playback about 50% of my DVD collection, yet no-name imports (and my PCs) seem to have no problems at all.
Could there still be a difference in build quality if not design? Maybe the high-end brands are getting the A-grade stuff and the low-end brands are selling the borderline-grade stuff that doesn't score as high at quality inspection time, much like how certain CPUs in a wafer will not clock high enough to sell as a high-end CPU, but if you downclock them they'll work fine as a lower-end model.
You see? You see? Your stupid minds! Stupid! Stupid!
In the 80's I worked in a commercial photo finishing lab -- the place your film gets processed when you drop it off at a grocery store.
They charged more to develop ISO 400 film than ISO 100 film. The explanation was that the customers thought that since ISO 400 film was more expensive, it would be harder or more costly to process it.
But the fact was that all C-41 films went through exactlythe same process. In fact, it costs less to process ISO 400, because more silver is recovered for recycling during the process.
So the conclusion is, they charge what people are willing to pay.
I once bought a 20" TV in Canada, which was really cool because it had a message feature, where you could type in a message and have it scroll across the screen at a particular time. I moved to the USA, and the same make of TV (and model number) didn't have this feature :(
Vintage computer adverts: http://www.vintageadbrowser.com/computers-and-software-ads
That's backward, it's usually the business version that has a jacked up price.
If something claims to be for industrial or business use, normally it costs at LEAST twice what the consumer version does.
These guitars were *exactly* the same from brand to brand, with the exception of colors, and some minor details (shape of pickguard, knobs, pickup covers).
Harmony brand usually sold for more money, followed by Sears and Wards even though the guitars were exactly the same.
When Japanese guitars started showing up for much less, there was much more 'spread' as many of the cheaper models were outsourced overseas. After some time, the industry shook itself out and the cycle began anew.
Now many of the old names are owned by the Japanese, and it is a similar situation.
Be careful here. A product that look exactly the same might not be. It might even be made in the same factory from the same parts. But electronics go thorugh a lot of testing along the way in manufacturing and the cheaper ones might be produced with looser specifications. It might even be "outlyers" from the core product.
For example if the brand name version has a spec on some output that calls for 40-50 (insert unit of measure here), units that come off the line with 35-39 or 51-55 might go into the "low cost brand" bin. They still work, but they're not opimal quality.
It's also very easy in electronics to disable features, depopulate boards, etc. Buy a million 5% resistors. Sick the ones closest to nominal in the brand name product, stick the others in the discount product. So, maybe the picture quality isn't as good. You saved fifty bucks, so don't complain.
-S
--- What parts of "shall make no law", "shall not be infringed", and "shall not be violated" don't you understand?
Maybe the high-end brands are getting the A-grade stuff and the low-end brands are selling the borderline-grade stuff that doesn't score as high at quality inspection time
If they're anything like Sony, they don't inspect their products at all - the build process is so refined that it costs more to inspect the product than it does to deal with returns.
"We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"
That concept pisses me off, whether it's the basis of a pure capitalism or not. Maybe it's the hard-wired instinct for "fairness" that we share with monkeys, or maybe it's the impossibiity of implementing such an idealized system. Or maybe it's because my idea of "what I'm willing to pay" is cost of stuff + cost of labor + reasonable profit. Anything more than that is gouging, and anything less is most likely subsidized by the gouging.
Who knows? I still don't like it. Why *can't* we all pay the same reasonable price? Why is artificial price differentiation and illusory competition through rebranding and repackaging of identical products a good thing for anyone but the companies succeeding in the gouging end of the spectrum?
Maybe there's a good reason I'm not an economist. On the other hand, maybe there's a good reason this doesn't work perfectly now-- people hate it, and some of them even bother to shop around to find the lowest price.
Here's an example, but in the OPPOSITE direction. A relative of mine works for a large company that makes batteries (the one with the tinted hare).
They make alkaline cells for a myriad of companies. Walgreens, Radio Shack, Wal-Mart, Albertsons, the list goes on and on.
According to him (he used to work as a production manager in one of their large plants), the batteries made for other customers were actually tested MORE than their own name brand, since the potential damage was greater if they lost one of these big accounts due to excessive warranty claims.
So the cheaper generic batteries are actually slightly better quality than the big name ones, but not by much. Funny how that works out.
Go into a US hospital and get charged $6.00 for a fifty sheet box of Kleenex. Or $5.00 for one acetominaphine tablet. They are really trying hard to make it a $1500.00 per hour minimum for being in a room. In 1998 I had neck surgery, 22 hours in the hospital $25,000.00 hospital bill to my insurance.
Professional Politicians are not the solution, they ARE the problem.
Sometimes you'll see a retail store advertise a product, such as a dishwasher, with the claim that they'll match the price if you find it lower at a competing store. The fine print says that it must be the exact same model number. What they don't tell you is that the manufacturer's model number is exclusive to that store chain so it's impossible to find that *exact* model number at a competing store.
A friend of mine worked a summer job in a paint factory where they canned spray paint. He loaded labels into the machine. Same cans of paint, it was the labels that determined whether it was a high end brand or some random house brand.
I worked a summer job in a plant that processed and canned pickles. We put sliced pickles in 5 gallon buckets and slapped Burger King, Long John Silvers, Wendy's, etc labels on them. Interestingly, the only one that was different was McDonalds. They had a special recipe for spices, and they were the 800 pound gorilla, so they could make the suppliers make special batches for them.
Indeed. Back in the '90s, a Geo/Chevy Prism was the same car as a Toyota Corolla. The same workers at the same factory in Fremont, California built the same cars, and slapped a different logo on 'em when they were done.
Corollas sold for a few thousand more than Prisms-- because Geos suck, and Toyotas don't.
The odd thing is: Prisms got worse reliability ratings than Corollas, too. Same car, same assembly line, but somehow, people decided their Geo sucked harder than other people believed their Toyotas sucked. Nothing to do with the vehicle, it's all perception...
-JDF
It's also interesting to see what misleading labelling makes people think they're getting more when they're getting less.
I had a friend who owned an electronics dealership. He sold camcorders, among other things. He showed me a shady practice done by at least one camcorder manufacturer. A fictitious example; if he sells, say, a CRV-510 camcorder, the same manufacturer will also make a CRV-515 model, and it will only be sold in large lots to big box resellers like Best Buy, etc. The consumer will see the "bigger model number" and assume it's a better model. It will look identical, and will superficially perform the same. It will probably have some cheap, useless feature that's implemented 100% in firmware (like more fade/wipe patterns or something) so they can have more bullet points on their box.
However, it will have hidden things that are not generally touted which will be inferior; the CCD will have 100,000 less imaging pixels, the S/N ratio of the video amps will be a bit less good, the D/A converters will be cheaper and more noisy, or something. Nothing that Joe Sixpack would even know what you're talking about if you mentioned it. But they'll think they're making a smart purchase buying it at Wal*Mart, and be convinced that the mom & pop down the street are just trying to rip them off.
Same with the HP laserjet line. Both of those companies went from innovation and solid performing products to bascially commodity junk. That increases profits for the short term but basically wipes out any long term stability. A good example is Dell entering the laser market. Ten years ago they would not have stood a chance against HP.
Bad boys rape our young girls but Violet gives willingly.
You think Levi jeans are any better made (from a practical point of view) than a no-label pair picked up in a department store?
They USED to be, but not anymore. They used to be serious work wear, made in the US, and would last years. At some point, Levis started to be marketed as fashion. At some point shortly after that (and partly due to pressure from Wal*Mart), they outsourced their production to Asia and cut their standards from "farmer/carpenter wear" to "teenybopper/yuppie wear" - now they tear just looking at them, same as all the other cheap crap. You need to buy Carhartt now to get good work wear.
I pay twice as much for business phone service as residential, coming into the same house.
BellSouth tried to sell me "business" DSL for well over twice the residential price. This is no joke. They sent a thing to my wife offering DSL for $45/month, and two days later I get a telemarketing call on my business line offering the same speed DSL for $90. I asked her why I should pay that when BellSouth was also offering the same thing for $45.
First, she denied it. Finally she admitted it, but said that the business service was better. Why? Because if they had to send out repair, I'd get next day for business but it'd possibly take a few days for residential. Gee, is there possibly a better way to back yourself into a corner?
So the obvious question: Is your DSL service down so much that this would affect my buying decision? I love it, she had two choices: "yes, our service sucks" or "no, you'd be wasting your money."
She settled with "no" and ended the call.
Plenty of companies want to charge you more for services if you're running a business.
Do you have ESP?
Many of the above comments are about how brand name companies make the same thing under different names, and sell them for different prices, sometimes with different marketing schemes.
;) ) getting advice to raise their prices- Americans believed that the prices were so low that the quality had to be lower. They rose prices and took in cash.
There's a bunch of marketing stories about how if there are two products, one cheaper, one more expensive, that are about the same, most people will go for the cheaper one. Add a new one more expensive than the top one, however, and the old top (the new middle) dramatically increases in sales.
And there's the story about Taco Bell (a fast food chain here in America, for you barbarians
Most of the time these stories are basically saying "THESE COMPANIES ARE LYING TO US!!!". Some times they are commenting on percieved human stupidity, which is what we call it when an emotional system finely honed for survival in the wild proves mildly susceptible to some new cunning analysis and we don't take the most logical path.
I want to give another point: you are, in some cases, watching the free market help the little guy. This is private industry giving "welfare", a strong discount to those who can't afford the pretty name. Buying batteries and poor? Well, you aren't getting worse batteries, you're just paying less. The only real currency we have is emotion, and we are witnessing poor people "paying" with emotion in comparison with rich people- they can't necessarily get the cool name, and good packaging and the warm feeling it produces. But, they aren't getting screwed with a product that blows up or fails or is just crap!
I used to hate this, but then I realized that if it bugged me so much, I could just buy non brand name products all the time. Or I could just shut up and buy Duracells and help support an industry standard that actually has beneficial side effects to those with less money, without making me feel like it's picking my pocket.
This could be a lot worse. This is in many ways noble.
Dude you're comparing 2 different (only it's a very slight difference) drives, and one's OEM while the other is retail, there will be a price difference. LG gives you a warranty for the retail product while the OEM isn't covered at all (by LG, dunno NCIX's policy.) The Future Shop product also has everything needed to install (cables, screws, jumpers) plus software, plus manuals. That's pretty much what you're paying for in the difference. Although at that price I would have bought neither drive (you can buy CD-RW /DVD combo drives for way cheaper than $80, and for $120 you can buy a retail DVD burner, my friend just got one, doesn't use it but it was only like $120 at Fry's.)
Based on what? If I notice that both Wal Mart and K-Mart trucks are driving out of the same lightbulb factory, what exactly are they going to point to in the law that would prevent me from sharing that information with others?
ABSURDITY, n.: A statement or belief manifestly inconsistent with one's own opinion.
Best VCR I ever owned was an LXI model (Sears store brand) which was originally made by Goldstar and sold under at least a dozen different brand names and a dozen different price points. Goldstar simply made a base systemboard and chassis and customized it to suit whatever was needed. Some units had multi-standard tuners, some had difference remotes, editing features or other tricks. Some were just basic VCRs, but all were basically the same under the metal.
Paper brands are not always as unique as they seem. I once had the chance to visit a Xerox-operated warehouse used to distribute paper and ink supplies and whatnot. Among the stock items were pallets of boxed color paper labeled as store brands for Office Depot, Office Max, Staples as well as some bearing the Xerox brand label. It was all the same paper, being sold by competing chains and under the Xerox brand, at all sorts of price points. Xerox was the OEM and distributor and they in turn bought the paper from a Georgia Pacific paper mill.
It makes sense: the paper mill only had to make ONE kind of pink or blue or whatever paper, and only had to ship it to ONE customer, Xerox. Xerox took care of shipping it out to all the different retail chains which allowed the retailers to get a pretty decent deal and adequate quality. Everybody wins.
The other reason Buick had to wait for their GMT360 is that the Rainier was previously selling as the Olds Bravada until Olds got the knife this year (by the way, the original GMT360 triplets came out as '02 vehicles in the winter of '01).
(I had one of them for about two years before swapping it for a minivan)
As far as I can tell, the only change they made between the Bravada and Rainier was the new front grille. It looks otherwise identical, and unlike the Chevy/GMC version (but like the Bravada), isn't available in an extended 7-seat version.
It was kind of similar in a way with the minivan platform. First it came out in the value (Chevy Venture), sport (Pontiac Montana), and luxury (Olds Silhouette) versions. Basic minivans.
Then, to appeal to a crossover market, they reworked the platform into the Pontiac Aztek - the idea being to grab a younger "adventure" demographic. Then Buick got their version (the Rendezvous), which was positioned as an SUV (to try and lower the age of Buick buyers below 65), when it was really a minivan in SUV clothing.
In general, though, GM products are a perfect example of how branding is the only significant differentiator between products. Each GM domestic division is targeted to a specific market segment (Saturn - cheap imports, Chevy - mainstream value cars/trucks, Pontiac - sport/performance, Buick - middle-class "luxury", Cadillac - upper-class luxury, GMC - truck specialty/professional), and their ownership (both outright and partial of other companies like Isuzu, Subaru, Saab, Daewoo, etc.) let them rebadge and reposition a basic model easily between brands. Saab, for instance, has added a "Saabified" version of the Subaru Impreza WRX to their lineup. And they'll have a version of the GMT360 platform this fall as well. Isuzu now sells a GMT360 of their own, the Chevy Aveo is a Daewoo that's been adapted to the domestic market, and so on.
I may be a bit of an exception in my car shopping - I usually buy GM vehicles of one form or another, but I'm not brand-loyal like many are. When I bought my minivan, I looked for the best combo of price/features between the three (Chevy/Pontiac/Olds), and decided on the Chevy partly because it matched those specs best and partly because that was the local dealership I felt most comfortable with. When I replaced my old Blazer with a Bravada two years prior to that (the minivan was a reaction to having kids), I went with the Olds because the prices being offered were way better than either Chevy or GMC were doing for their equivalent versions.
Gateway's going to do the same thing now that they own E-Machines, and HP's been using the Compaq brand for cheaper "consumer" stuff. Apple used to sell versions of their Power Macs (and Quadras before) as Performas - same product with a different model nuber for a different sales channel.
It happens everywhere, really.
-- Josh Turiel
"2. Do not eat iPod Shuffle."
Interesting how this debate turned around Sony. I kind liked their products back in the "old days". About 3 years ago I sort of fell in love with the bleeding edge top-of-the-line Vaio laptop. That is to this date the worst purchase I have EVER made. I travel quite a lot - in Europe and in the far east. I did in fact buy the laptop in a South-East Asian country - with INTERNATIONAL warrenty and service. Six month later I find myself in Europe - with my Vaio - minus the charger. Called Sony to get a new one only to hear: "Sorry - we don't support that model in Europe at all - you'll have to order a replacement from the country where you bought the laptop".
I simply don't understand any company can survive with that kind of service. Needless to say I will never repeat the mistake of buying a Vaio - EVER.