Pentax pricing strategy seriously wrong?

It seems to me that the recent hike in Pentax lenses (in the UK at least) is a grave error in strategy. Another thread, in which this issue was raised, has now been blocked due to it getting rather acrimonious (though not on this subject). So I thought this part of the discussion might be continued here.

Here are the relevant posts from the other thread:

Dr. Mhuni wrote:

Reflecting on the original subject, I have come to the conclusion that there are good reasons to switch to Nikon. Oddly, a prime consideration for me would be to get 'Pentax' glass at a reasonable price. If I lost all my gear tomorrow, I'd be sorely tempted to get a Nikon D90 or D300 and Tokina lenses - notably the 12-24, 16-50 & 50-135 - at half the price of the DA equivalents. I am hooked on Pentax. And what got me hooked in the first place was that for the money - at least up until the recent price hikes - it's been a no-brainer as to which brand offers the best vfm (though Olympus too are very competitively priced for the spec). However, the current prices of Pentax lenses in the UK surely threatens what small market share it has managed to build. To take the DA12-24 as a prime example. No doubt it's a great lens, but does it have the speed (or build) of a lens with a RRP of £1,300?

johnriley wrote:

Quote:
To take the DA12-24 as a prime example. No doubt it's a great lens, but does it have the speed (or build) of a lens with a RRP of £1,300?
We have never, until very recently, worried about the RRP of any lens. The actual price is the "street price" and these have been stable for so long we've all but forgotten about RRPs.

If you wanted to buy a 12-24mm today, you would pay slightly more than £600 for it if you really looked. More expensive than it was, sure, but nowhere near £1300.

Dr. Mhuni wrote:

John,

Of course your point about RRP not being what one would usually pay is correct. However, my point about Tokina vs. Pentax was made with actual prices in mind. While there may be a few old stock 12-24s around at £600, SRS (which usually offer the best prices around) currently have it up for £999. The Tokina, meanwhile, can be had for £475 from Warehouse Express (not necessarily the cheapest outlet - just one I've consulted in a recent AP, though they do have the Pentax for £519 [by contrast Park Cameras, usually a good source for Pentax, have it at £949]).

IMHO the latest price increases on Pentax lenses were quite disproportionate. Speaking to the guys at SRS recently, they seemed to think that the prices would come down at some point to a more reasonable price. But we'll see. And as indicated above, if I were to start afresh, I'd certainly think twice about whether I'd opt for Pentax (notwithstanding how happy I am with my current kit).
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Mhuni

George Lazarette wrote:

There is absolutely no doubt in my mind that Pentax lens prices will come back to more reasonable levels. Somebody, somewhere, in Hoya has made a drastic mistake with the new price structure, and market forces will soon put that message across very strongly.

G

Joe S wrote:

johnriley wrote:


[...]

If you wanted to buy a 12-24mm today, you would pay slightly more than £600 for it if you really looked. More expensive than it was, sure, but nowhere near £1300.
"...if you really looked."? But honestly, why stick with Pentax as it has become so hard to find anything at a reasonable price. I don't know the situation in Manchester, but personally, even though I live in a European capital city I cannot find Pentax on the shelves. When I walk around, looking at the shopping windows I often see Canikons (and various lenses) on sale and I kick my legs for staying with Pentax. I have come to the conclusion that value for money is not quite the selling point I thought it was.

So to be quite honest, even though I am quite happy with my gear today I don't think I would have gone the same route today. And that's not because "the grass is always greener...", but for practical reasons.

I agree with George and others that Pentax could do the job as well as Nikon, when it comes to IQ. But then again, Feeb has not yet stocked up on lenses, so I think it is a rather rational thing for her to do - switch now, buy some piece of mind. As the doctor points out, she could start with a Nikon body and the Tokina lenses.

I know, some will say it is a great anti-Pentax conspiracy but the way I see it Pentax IS challenged hugely. Come on guys, don't say you don't see it?! The way Pentax dropped the goodwill for K-7 before it even hit the shelves have to be one of the most amazing home goals ever!

You have to just love the limiteds so much that you ignore the warning lights blinking. I'm happy to say, I'll still stick around, though

Greytop wrote:

Thoughtful and interesting post Joe and I agree with pretty much all you say. I just hope George is right and Hoya/Pentax realise the mistake they have made with pricing.

Don wrote:

unless of course the original pricing was the mistake, and they realised that bargain basement pricing degrades the percieved value of the product, and won't keep the company solvent in the face of competition with larger production/advertising and distribution channels.... so going niche, premium, upscale, somewhat exclusive and catering to a more well heeled customer is the 'Right" pricing strategy.....
Possibly, though this strikes me as a very risky strategy. Pentax might be able to keep existing users, but a sound business plan would identify the necessity of attracting new customers for long term viability. Meanwhile, as I see it some lenses are strikingly poor value at present - even if Pentax were pursuing a premium strategy such as you suggest.

At £1,000 for the 12-24 I'd be expecting a lens with a maximum aperture of f2.8 and better build quality. Tokina seem to agree. I love this lens, but if I were in the market for an ultra wide zoom at the current pricing I'd have to go for the Sigma or Tamron. Similarly, I'd have gone for the Sigma 17-70 instead of the DA17-70. Are Pentax going to sell enough lenses at the current price in order to compensate for lost sales such as this?

Glad you resuscitated this. It was just getting interesting.

I do agree somewhat with Don's suggestion that Pentax might have been under-pricing themselves, and that a niche market for serious amateurs who appreciate Pentax's strengths might be where Hoya is trying to push them.

However, softly, softly, catchee monkee. A dramatic price rise such as the one we have witnessed is not the way to go about it. That just puts people off. What is needed is a gradual shift over three or four years, accompanied by some cleverly targetted promotion.

G

Just noticed the end of my post was rather confusing, as Don didn't write the last two paras. So it should read thus:

Don wrote:

unless of course the original pricing was the mistake, and they realised that bargain basement pricing degrades the percieved value of the product, and won't keep the company solvent in the face of competition with larger production/advertising and distribution channels.... so going niche, premium, upscale, somewhat exclusive and catering to a more well heeled customer is the 'Right" pricing strategy.....

Dr. Mhuni wrote:

Possibly, though this strikes me as a very risky strategy. Pentax might be able to keep existing users, but a sound business plan would identify the necessity of attracting new customers for long term viability. Meanwhile, as I see it some lenses are strikingly poor value at present - even if Pentax were pursuing a premium strategy such as you suggest.

At £1,000 for the 12-24 I'd be expecting a lens with a maximum aperture of f2.8 and better build quality. Tokina seem to agree. I love this lens, but if I were in the market for an ultra wide zoom at the current pricing I'd have to go for the Sigma or Tamron. Similarly, I'd have gone for the Sigma 17-70 instead of the DA17-70. Are Pentax going to sell enough lenses at the current price in order to compensate for lost sales such as this?
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Mhuni

Prices below taken from Warehouse express today;

Samsung Badge
10-17 fisheye;£323
12-24; £539
16-45; £343
50-200; £177

Pentax
10-17 fisheye;£469
12-24; £979
16-45; £203
50-200; £165.

Cannot see any correlation but the 12-24 seems to be hopelessly out of step, we are told that both brands lenses are produced to the same spec, in the same factory. I cannot see the logic.
If prices do fall what happens then? all you people who bought at the higher price start complaining about the poor resale prices you are getting.

If you look at the value of the Yen against Stirling link over the last 12 months, you can appreciate where some of the increase comes from. Compared to this time last year a 20% price rise would just maintain a status quo for Pentax. At the low point in Jan 09 it would have required a 37% rise. I don’t believe any company could absorb Price reductions of that size

A very quick check found the following current best prices:

12-24mm lenses
Nikon 759.00
Pentax 553.00
Sigma 554.00
Tokina 448.00
Canon (10-22mm) 578.00

Tomorrow it may be very different, as it may in a month, but when anyone is ready to purchase they can check their favourite dealers and find a price that suits.

Other lenses may have different differentials because of supply and demand issues, so it's very difficult to generalise. We could compare RRPs for different marques, but in the end it's the street price we pay.

Also price is not everything. Don't forget how many times SRS service has saved the day for members here.

yeah we're not seeing that kind of price jumps over here in Canada... not yet....

I'm afraid I don't think that Pentax 12-24 is representative, John. It must be stock bought at the old price. I think that SRS or Park Cameras (both of which are dealers offering competitive prices on Pentax products) prices much more accurately reflect the current state of play. SRS were able to retail old stock of the 12-24 and other lenses at the old price until they ran out in June.

By the way, the Sigma 10-20 f4-5.6 can be got for £389 at SRS.

Sure the £ depeciation has to have an effect. However, other Japanese manufacturers including tokina, Sigma & Tamron (they're all Japanese, right?) haven't hiked their prices anywhere near as much.

It was a handy lens to choose as it had been mentioned. If we compare the 55-300mm life may not seem so bad.

If we looked at the 50mm f1.4 we might get depressed....

For sure Sigma saw some steep increases. I was considering their 50-500 but ended up with a DA*300 because of the price hike.

The Samsung pricing may have more to do with their method of purchase and contract with Pentax, than current factory door price.

I was only thinking about this last night...... If I was to start again with my kit would I know consider Pentax?

As much as I like my kit the thing that decided it for me was the availability to expand my kit. With a K7 body in the same price leaque as some of the competitors with no real advantage were I want it i.e low light and fast focus and the current cost of lenses then the answer would now be no.

How many other newbies will now be turning to the 2 more known manufactures over pentax because they are just as affordable?

Wrong question....
How much market share did Pentax lose to the other two major slr players despite being a more affordable system over the last few decades?

Hmmn, there are too many unknowns here to be sure of any conclusion, I would guess.

We don't know - or maybe we do? - what proportion of camera buyers ever buy another lens at all, and what proportion of those that do choose an own-brand over a third-party lens. Paradoxically, raising the price of their own lenses so much may help Pentax to maintain credibility because more third-party Pentax-fit lenses will be sold. Imagine if Tamron or Sigma announced they were ditching Pentax mounts as the market for them was too small. That would really be a blow.

Nor do we know - or maybe we do? - how much profit Pentax make on selling lenses. If very little, then it's hardly a surprise that in present economic circs they are being cautious and conservative.

Nor do we know - or maybe we do? - which markets Pentax see as core and worth sinking funds into. It could be that the UK or even Europe and North America are a long way behind Japan, China and the Far East in Pentax's thinking and from their POV aren't worth making much of.

The thing that most bugs me is the Pentax UK website. It is a famished and sad place. No style, no pizazz. If this is a shop front, if selling off the web is a big thing, and if the UK market matters to Pentax, then they are going about servicing it in a mighty strange way. Still, who knows.

Nice description. It's always a pleasure to read good English.

I have been wondering whether all this is connected with Pentax's decision to resuscitate the 645D. They may feel that they would be happier selling to a smaller, more knowledgeable market, which is prepared to pay a premium and which needs less expensive consumer advertising.

G