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View Full Version : What is up with Babolat's Minimum Advertised Pricing Policy??


kiwiconman
08-08-2011, 03:51 PM
I am really curious as to why Babolat refuses to offer any discounts on their racquets (older models aside). As of right now Wilson, Head and Prince are offering at least a $30 discount on their existing line of racquets.

I have inquired at my local tennis store about discounts on Babolat products and they always cite their MAP policies. What is up with that? Are there other companies with such stringent pricing policies or is Babolat the only one? :?

ollinger
08-08-2011, 03:57 PM
They do it because they can, because they have market share clout that they feel is growing. The advantage is that if you can prevent your retail outlets from getting into price gouging wars with each other, then you can maintain a very profitable price for the retailers that causes them to then promote your product heavily to their customers. Without MAP, retailers start competing with each other, lowering the price until a point where a retailer would rather sell you a Wilson or Yonex because he makes more money on it. Remember though that such a marketing approach only works when you feel demand is strong enough for your product that you can sell plenty of them without discounts. Babolat clearly feels they're in that position for now.

zapvor
08-08-2011, 04:28 PM
yup. babolat also have the most strict dealer requirements.

ace_it_96
08-08-2011, 04:33 PM
It could also possibly be that prince wilson and head are all coming out with new lines?

El Diablo
08-08-2011, 05:58 PM
It's actually NOT obvious that people don't buy racquets when the economy is slow. Where's the data? Some relatively inexpensive luxuries tend to sell well in a bad economy, as people use them to replace more expensive luxuries such as cars and vacations.

TennisMaverick
08-08-2011, 06:02 PM
It's actually NOT obvious that people don't buy racquets when the economy is slow. Where's the data?

It's obvious when your in-contact with reps, retailers, and head pros.

kiwiconman
08-09-2011, 10:04 AM
Unemployed people have a lot more free time to participate in tennis. :)

I know this debate has REALLY strayed off-topic but I couldn't help laughing at this :)

TennisMaverick
08-09-2011, 02:24 PM
I know this debate has REALLY strayed off-topic but I couldn't help laughing at this :)

In NYC, it's true. The courts are used just as much during the day now, when it used to be dead until after 4pm. Anyone I've asked has said that they were unemployed or doing numerous part time gigs.

bad_call
08-09-2011, 02:38 PM
I know this debate has REALLY strayed off-topic but I couldn't help laughing at this :)

these dudes are way off. the GOP regained power in 2010 on the promise of jobs...should be just around the corner.

nalvarado
08-09-2011, 05:13 PM
Unemployed people have a lot more free time to participate in tennis. :)

Get laid off? Become recreational GOD.

kiwiconman
08-09-2011, 05:43 PM
And Babolat is not in-control; the industry is. MAP, is industry wide, not Babolat lead and driven.

Um... FYI the store I usually buy from offers me discounts on Head racquets regardless of whether or not Head is doing a promotion. So, clearly, MAP is not industry wide as you say it is

TennisMaverick
08-09-2011, 05:45 PM
Um... FYI the store I usually buy from offers me discounts on Head racquets regardless of whether or not Head is doing a promotion. So, clearly, MAP is not industry wide as you say it is

And if they find out, they will cut said retailer off. That is SOP. MAP is designed so that bigger retailers who purchase at a cheaper wholesale rate, do not cut the legs out from under the smaller pro shops.

BreakPoint
08-09-2011, 08:21 PM
Um... FYI the store I usually buy from offers me discounts on Head racquets regardless of whether or not Head is doing a promotion. So, clearly, MAP is not industry wide as you say it is
"MAP" stands for "Minimum Advertised Price", which just means the store cannot advertise a selling price lower than the MAP but that doesn't mean they can't actually sell the racquet for below MAP. In fact, most of them do.

diredesire
08-09-2011, 08:24 PM
Read the rules, dummies. There's no politickin' up in here. Official, casual warning.

Bartelby
08-09-2011, 08:31 PM
Prices are going down everywhere, in part due to the devaluation of the US dollar.

dParis
08-09-2011, 09:25 PM
Prices are going down everywhere, in part due to the devaluation of the US dollar.
That usually makes goods manufactured in the US cheaper on the world market. The price of goods produced outside of the US would rise when purchased with the Dollar.

BreakPoint
08-09-2011, 11:17 PM
Prices are going down everywhere, in part due to the devaluation of the US dollar.
Prices set in U.S. dollars go up, not down, when the dollar is devalued (worth less than before). E.g., if the U.S. dollar is now worth only half of what it did before, you'd have to pay twice as many of those dollars to buy the same product as before.

Bartelby
08-09-2011, 11:33 PM
I'm not sure how this works fully but the newspapers are full of the fact/opinion that as the local dollar rises our imports are cheaper but our exports are less because they are too expensive.

This is the intelligible part, but they are also argue that the falling US dollar makes our imports cheaper (maybe the importer absorbs the cost of the falling dollar to maintain sales?)

The other local question is that if the local dollar goes up fewer people will buy locally as the goods are cheaper online even if the postage is expensive.

A racquet that used to sell here for 300 local now sells for more like 250, but with the dollar at parity it is only 200 or less from TW.

Not too mention the fact that you will never find a host of racquets on sale for 100.

BreakPoint
08-10-2011, 12:12 AM
I'm not sure how this works fully but the newspapers are full of the fact/opinion that as the local dollar rises our imports are cheaper but our exports are less because they are too expensive.

This is the intelligible part, but they are also argue that the falling US dollar makes our imports cheaper (maybe the importer absorbs the cost of the falling dollar to maintain sales?)

The other local question is that if the local dollar goes up fewer people will buy locally as the goods are cheaper online even if the postage is expensive.

A racquet that used to sell here for 300 local now sells for more like 250, but with the dollar at parity it is only 200 or less from TW.

Not too mention the fact that you will never find a host of racquets on sale for 100.
I think you're confusing the value of the dollar with prices. When the value of the dollar goes up, it does not mean that prices go up. In fact, it's the opposite. When you see prices go down (all else being equal), that means the value of the dollar is going up since you can now buy more stuff with less dollars, thus, each dollar is now more valuable.

Bartelby
08-10-2011, 12:34 AM
I can see that point but there are always complications.

The price of oil is going up in our local dollar.

But the local dollar is going up against the us dollar in which the international price of oil is expressed and hence we can buy more oil for our dollar.

but the price of oil is still going up because the rate of increase in the price of oil is greater than the rate of increase in the local dollar against the us.

and there is the added complication that prices rise quickly but fall slowly.

I'd assume that the price of racquets, unlike oil, is either static or falling and someone - the oem - is getting paid less.

The fact is that racquet are around 20-25% cheaper.

BreakPoint
08-10-2011, 12:57 AM
Before this past week, the price of oil was going up everywhere because it's the same international spot market price. The long term trend for oil prices is up. There's a finite quantity of oil on this planet and it's becoming more scare every day as we use up more of it.

dParis
08-10-2011, 06:15 AM
I'm not sure how this works fully but the newspapers are full of the fact/opinion that as the local dollar rises our imports are cheaper but our exports are less because they are too expensive.

This is the intelligible part, but they are also argue that the falling US dollar makes our imports cheaper (maybe the importer absorbs the cost of the falling dollar to maintain sales?)I think it's more like your dollar (Aus, NZ?) gains value compared to the US dollar = items pegged to the US dollar are cheaper (for you).

The other local question is that if the local dollar goes up fewer people will buy locally as the goods are cheaper online even if the postage is expensive.

Yep. It's a microcosm of what the international business market has to constantly deal with. Better to try and understand it rather than fear and attack it.

Bartelby
08-10-2011, 06:23 AM
I don't think I'm attacking it, but at the moment you can buy a 1000 dollars worth of goods customs free, but business here wants that lowered even though the policing of this limit costs more than its worth.

It could come to a situation where it's cheaper for local businesses to set up off shore websites and import goods to the individual consumer rather than shipping the entire stock and selling it in a shop.

If TW had a real and virtual shop somewhere in China, then Head could assign goods directly to the individual consumer through TW using TW as its sales distribution centre.

Why do the goods have to get to SLO before they get elsewhere?



I think it's more like your dollar (Aus, NZ?) gains value compared to the US dollar = items pegged to the US dollar are cheaper (for you).


Yep. It's a microcosm of what the international business market has to constantly deal with. Better to try and understand it rather than fear and attack it.

dParis
08-10-2011, 06:57 AM
If TW had a real and virtual shop somewhere in China, then Head could assign goods directly to the individual consumer through TW using TW as its sales distribution centre.

Why do the goods have to get to SLO before they get elsewhere?
I suppose the costs of setting up a virtual shop as well as a "real" shop in China isn't something they want to take on atm. Getting the product to SLO is the easy part. It's no simple task for a small business to set up shop on the other side of the world. All that to satisfy what may be light demand at this time. You see TW has expanded into Europe though, so they do have growth in their plans. I suppose they are wisely taking a conservative approach to expansion.

TennisMaverick
08-10-2011, 07:10 AM
I suppose the costs of setting up a virtual shop as well as a "real" shop in China isn't something they want to take on atm. Getting the product to SLO is the easy part. It's no simple task for a small business to set up shop on the other side of the world. All that to satisfy what may be light demand at this time. You see TW has expanded into Europe though, so they do have growth in their plans. I suppose they are wisely taking a conservative approach to expansion.

It's cheaper to send pallets and containers, and many times, SLO does not get the products first; they go to the companies US warehouse, before shipping to TW or any other retailer.

Lendl
08-10-2011, 07:19 AM
Exactly. Any racket I've ordered from TW or the other two main companies has been at 25% off or more (unless already on sale/clearance). Always, always call and ask for best price shipped and ask to speak to a manager as they will have the ability negotiate and approve the discount. I currently use the Babolat Roddick GT and got those discounted as well as the APDC before that.

Babolat is more strict than others but if you ask and have been a customer prior it is unlikely they will stick to the retail price unless stock is very low.

"MAP" stands for "Minimum Advertised Price", which just means the store cannot advertise a selling price lower than the MAP but that doesn't mean they can't actually sell the racquet for below MAP. In fact, most of them do.

dParis
08-10-2011, 08:27 AM
It's cheaper to send pallets and containers, and many times, SLO does not get the products first; they go to the companies US warehouse, before shipping to TW or any other retailer.
Right. TW is taking advantage of a distribution infrastructure that is already established and working on economics of scale. I would imagine when all product reaches the west coast ports, it goes to a distribution warehouse of some sort before heading to SLO. Some of those warehouses may be as near as adjacent to the port, or as far as Secaucus, NJ.

TennisMaverick
08-10-2011, 05:12 PM
Right. TW is taking advantage of a distribution infrastructure that is already established and working on economics of scale. I would imagine when all product reaches the west coast ports, it goes to a distribution warehouse of some sort before heading to SLO. Some of those warehouses may be as near as adjacent to the port, or as far as Secaucus, NJ.

Volkl is in Secaucus, in a warehouse run by Samsung, with a few major clothing lines, including Fubu, so they work like clockwork. Samsung is bigtime. I can email SD before 3 pm EST, and SD contacts them, it's pulled, and at my door the next day ground to NYC.

Bartelby
08-10-2011, 05:49 PM
Getting the goods to america/europe enables tw to offer the goods freight free to americans and now mostly to europeans, but one could imagine a global version of the same.

Steve Huff
08-11-2011, 03:38 PM
Pricing generally has little to do with the value of the dollar. Pricing has to do with the economics of supply and demand. Babolat (and other manufacturers) determine the economic analysis that they can sell x number of frames at $185. If they raise the price to say $200, they will sell y number of frames. If they lower the price to $170 they will sell z number of frames. To maximize their profits, they have determined that x number of frames at $185 yields the most profit. The MAP does help ensure that local retail outlets can compete with wholesale stores. Also, Babolat maintains its desired image with its pricing structure. Wasn't it Agassi who says, "Image is everything". Nike banked on it for years. So does Babolat.