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BC1
07-15-2010, 10:54 AM
Every brand has their different models with different price points. For example, Wilson has their 6.1 models retailing at $199, and their "Pro" models at $179. Head has their Prestige models retailing at $199, their Radical models at $189, and their Extreme models at $169. Dunlop has their "200" and "300" Models retailing at $179, and their "500" model at $159. Prince Black at $199, Prince White at $179. ETC. There's usually a $20 price difference between models.

My question is - Is there really a difference in the cost of manufacturing/producing any of these models over another? Does it really cost Head $30 more to manufacture the Prestige over the Extreme, or is it all just a marketing scheme that all the major brands use?

This is just something that I've always wondered about. I'm sure there's someone here, or even TW staff, who has some insight. Thanks.

mctennis
07-15-2010, 11:26 AM
I think sometimes it is just the stigma of a "Pro" "Elite" or "Tour" model that makes them cost more. Anytime you see that on the racquet you know it is going to cost you more.
A very good question though. I'm sure the actual cost difference isn't that much more IMHO.

MLtennis
07-15-2010, 12:43 PM
I agree with mctennis - I believe it's all marketing. The truth is probably that the racquets don't cost much more than the $20/$30 difference in price to make in the first place. Even if the racquets cost $60 to make - I sincerely doubt a 40-50% difference in cost from one racquet to another. You're really paying for what "most" players want - if most people want the Fed racquet specs - not to mention that it's Fed's racquet = more marketing $$'s - they can charge more for it. Supply - meet demand.

stufflebean
07-15-2010, 12:55 PM
I'd tend to agree with m*tennis. I'd bet that the manufacturers are still technically making a profit when they end-of-life a racquet and sell it for <$100. I mean, they're probably also making a profit on the $20-30 Walmart racquets, and the manufacturing process probably isn't that different between all of the racquets in their range (quality control and materials notwithstanding). Of course, there are also all of the costs of R&D (basalt/aerogel/d3o isn't going to research itself), which are probably amortized out over the time when the racquet is priced nearer the $200 mark.

I would be interested to know the exact manufacturing cost for a new top-of-the-line racquet (since I suspect it's maybe 1/3 of the price, if that), but I'd bet good money that no one with that information is able or willing to divulge it.

BC1
07-15-2010, 01:07 PM
I'd tend to agree with m*tennis. I'd bet that the manufacturers are still technically making a profit when they end-of-life a racquet and sell it for <$100. I mean, they're probably also making a profit on the $20-30 Walmart racquets, and the manufacturing process probably isn't that different between all of the racquets in their range (quality control and materials notwithstanding). Of course, there are also all of the costs of R&D (basalt/aerogel/d3o isn't going to research itself), which are probably amortized out over the time when the racquet is priced nearer the $200 mark.

I would be interested to know the exact manufacturing cost for a new top-of-the-line racquet (since I suspect it's maybe 1/3 of the price, if that), but I'd bet good money that no one with that information is able or willing to divulge it.

Yes, I would agree - with all of the above.
And I'm sure someone out there does know the approximate manufacturing costs. I would imagine it has been discussed somewhere on these boards before. Someone? Anyone? let it out!

new_tennis_player
07-15-2010, 02:11 PM
There have got to be dozens, hundreds or thousands of expenses going into the R&D process, manufacturing, marketing and sale of a racquet. Then again, given the volume of sales, and the efficiency of manufacturing once the process is established, I suspect that marketing and advertising play the largest part.

Even if sweatpants come off the same assembly line, target's house brand will cost 1/4 to 1/6 of a brand name label such as Nike or Adidas. Why? It would have to be the added cost of advertising and sponsorship.

Oddly, there's also the cache factor which drives prices up: the demand for $26K to $29K Mercedes' is very low: whereas sales just above or greatly above that price point for Mercedes is very healthy.

A lot of consumers mistakenly assume that a higher price point means higher quality: this is often a huge mistake. Does a gucci or prada leather bag have materials which are 1,000X more expensive than a down market competitor's? It's just the label and prestige associated with it.

Practically speaking, I've demo'ed several racquets in the $200 range. I didn't enjoy hitting with them. My experience has been that racquets with similar specs play similarly, above a certain price point: say $80.

I'd tend to agree with m*tennis. I'd bet that the manufacturers are still technically making a profit when they end-of-life a racquet and sell it for <$100. I mean, they're probably also making a profit on the $20-30 Walmart racquets, and the manufacturing process probably isn't that different between all of the racquets in their range (quality control and materials notwithstanding). Of course, there are also all of the costs of R&D (basalt/aerogel/d3o isn't going to research itself), which are probably amortized out over the time when the racquet is priced nearer the $200 mark.

I would be interested to know the exact manufacturing cost for a new top-of-the-line racquet (since I suspect it's maybe 1/3 of the price, if that), but I'd bet good money that no one with that information is able or willing to divulge it.

new_tennis_player
07-15-2010, 03:55 PM
Here's an article on the markup for sunglasses:

http://financiallyfit.yahoo.com/finance/article-110073-5953-3-are-designer-sunglasses-worth-the-price?ywaad=ad0035

Apparently, there is only manufacturer of most of the brand name sunglasses sold in the western hemisphere: Luxottica. Their profit margin is 64%. This is remarkable since 70% of their production takes place within Italy.

Now, since we know that wages in China are a tiny fraction of that in western europe/north america, we can safely assume that the profit margin for tennis racquet brands is much, much higher than 64%.

Let's take sports shoes for example. A pair of high end Nikes can run close to $200 a pair. Yet we know that same pair cost less than $10 to manufacture. The profit margins and markups are likely quite similar for tennis racquets as well.

Personally, I find racquets in the $80-$100 range to hit very, very well, performing just as well, or often better than, their much more expensive peers. I have a very hard time recommending racquets that retail for $50 or less, however.

jigar
07-15-2010, 06:41 PM
Here's an article on the markup for sunglasses:

http://financiallyfit.yahoo.com/finance/article-110073-5953-3-are-designer-sunglasses-worth-the-price?ywaad=ad0035



I read this morning and I was thinking the same thing.
It is also very true for tennis balls. Manufacturers produce the tennis ball as per companies specification and print their name on it.
I saw it on TV.

makos101
07-15-2010, 06:50 PM
On the new rackets they more than double the prices it cost them to make the frames. I play in college and get discounts. I just got 3 new aero pro drive gt rackets for 90$ each. That is the price babolat sells the rackets and then stores bump them up to 189$ newer and more advertised frames cost more. In two years when they come up with some new marketing scheme the gts I got will go down in prices.

new_tennis_player
07-15-2010, 07:25 PM
The markup for 'boutique' labels period is always grand larceny.

I remember 5 years ago, people were paying up to $300 for 'designer' jeans. If you were 'lucky' you could get them drastically marked down for $90 to $100.

I'd walk into ross and get a brand with equivalent fit and basically identical design for $15.

What many manufacturers have realized is: a lot of people WANT to pay more and INSIST on paying more.

It's completely unnecessary.

ART ART
07-15-2010, 07:47 PM
The total cost (labour included) of each racket made in china, is around 25-30$. Remember this is total cost.

This is for heads, wilsons, babolats, ... all except made in Japan-Yonex rackets(but not all of their series are made in Japan).

Now you can ask your price for it, and marketing will do the job.

pshulam
07-15-2010, 07:54 PM
T
What many manufacturers have realized is: a lot of people WANT to pay more and INSIST on paying more.

I personally have not met anyone who insist on paying more for anything. I do know some people who are willing to pay $199 for a racquet that they think that it might improve their game. Discontinued racquets priced at half of the current models, I think, offer a better deal.

stufflebean
07-15-2010, 09:19 PM
What many manufacturers have realized is: a lot of people WANT to pay more and INSIST on paying more.

The total cost (labour included) of each racket made in china, is around 25-30$. Remember this is total cost.

[...]

Now you can ask your price for it, and marketing will do the job.

If I may respond again, I don't think it's entirely that people will refuse to buy a racquet if it's less than the expected price (call this the Mercedes-Benz effect, or, specifically, Veblen goods (http://en.wikipedia.org/wiki/Veblen_goods)). Especially in the presence of this forum, I know that if there were a racquet offered for $50 that offered the exact same performance as a $200 racquet, people here would pile onto it. I try to ignore price tags when I demo for just that reason. The real issue is that once the price has been set at $200, there's no incentive for the other manufacturers to lower their price, because they can get away with charging $200 as well, increasing their profits. Now as to whether a $200 racquet is better than a two-year-old soon-to-be-discontinued $100 racquet, let's just say that I intend to wait for any racquet I ultimately choose to be end-of-lifed before filling out my set of 3-4 racquets.