Similar actions are being taken (and hotly debated) in the consumer electronics business these days. We used to have a retail pricing system in widespread use called MAP, or Minimum Advertised Price. The corporations would set a MAP for their products, and the retailers could not advertise a lower price. If they did, and got caught, they could lose various incentive payments from the manufacturer for instance. But the retailer still retained the right to sell the product for whatever price he wanted.
Companies like Apple and Bose went a different way, and they came up with a system commonly called UPP, or Unilateral Pricing Policy. This one works like this: the manufacturer determines the minimum retail price, and if a retailer is caught selling below that price the manufacturer can refuse to sell that retailer any more product. Instant loss of product will tend to get most retailers to toe the line. This is the system that many of us, including me, thought was illegal under Federal laws and regulations. Well, SURPRISE SURPRISE. Somewhere along the way, probably when a lot of other financial rules and regulations were being traded away to the big shots and corporations, the rules changed. Now this sort of price fixing is legal, and retailers no longer have the right with to set their own prices when dealing with UPP manufacturer's or distributors. And I'm getting the impression that this is the type of pricing policy that H-D is embracing. Just one more in a long line of reasons why I won't be buying any more of their crap.
There is currently a lot of conversation going on about this UPP pricing regarding a couple big names in the HDTV industry. It seems Samsung and Sony have announced UPP pricing on their high end HDTV's starting in April. They claim they are doing so to protect the brick and mortar stores from the internet sellers. Sounds a bit like the BS coming out of Milwaukee, but at least with the consumer electronics folks you can see where it's become common for people to go to the retail stores to scope out the various models, pick the brains of the sales associates in those places where they still have knowledgeable folks, and then go home and find the lowest price at some online only store. I don't see that happening with a Harley, however. First, where you going to find a knowledgeable sales person to pick their brain? And you can't buy the actual bikes online, just the parts and accessories.
Anyhow, I expect the Samsung and Sony experiment to fail since there are plenty of other excellent alternatives, like LG, that aren't following their lead on the pricing deal. If I can buy a top of the line LG for $800 less than the price controlled Samsung for instance, I have to believe Samsung will lose a significant number of sales. Apple gets away with this kind of pricing because of the cult following. And maybe that same kind of cult following will let Harley get away with it for awhile. But the time will come when their patents expire and the aftermarket can crank out all sorts of better parts for lower prices, just like they did with the earlier models.
JMHO - Jerry
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Topic: St. Paul H-D sues the MoCo for restriction of international sales (Read 16013 times)