Pentax/Ricoh putting prices up


japers45

Link Posted 14/04/2012 - 15:56
I think it fair to say that the majority of Pentax's exisiting customers buy lenses because they want them rather than need them (that is to say most don't make their living from photography). This new pricing will certainly make many hobbyists/enthusiasts think twice before buying any of these lenses. There is the issue of value for money and then there is the feeling that you are being fleeced.

These kind of increases may be justifiable from an economic standpoint within Pentax- some kind of correction perhaps, but from a consumers point of view it's hard to take.

I wonder what the effect will be on the used market. Perhaps it will be possible to sell a recently acquired lens and realise a tidy profit.

I could sell all my gear for more than I paid and start again with another brand- hadn't considered that one before, nice of Pentax to give me that option though.

ChrisA

Link Posted 14/04/2012 - 16:04
George Lazarette wrote:
I find the assumption by many people here that Pentax doesn't know the principles of supply and demand to be comical.

I'm sure they do. However, there are other reasons for putting prices up.

In my own business, we discovered a perception amongst some potential clients that because we were much cheaper than our competitors, we must therefore be not as good.

We therefore changed our pricing structure, such that the non-discounted price was still less than our competitors, but no longer much less.

Although it's not possible to be entirely sure that the one was a consequence of the other, our sales did increase.

You'll see where I'm going - if it were to turn out that Pentax are increasing prices for the same reason, one might argue that they're penalising their loyal client base in order to go after a different market segment.

Clearly, we're not going to be fooled into believing that a higher price means a better product, since we're already used to it.

It might do, of course - for all I know, they're putting the extra margin into setting up a QC department, rather than relying on customers for QC.
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Pentax K-3, DA18-135, DA35 F2.4, DA17-70, DA55-300, FA28-200, A50 F1.7, A100 F4 Macro, A400 F5.6, Sigma 10-20 EXDC, 50-500 F4.5-6.3 APO DG OS Samsung flash SEF-54PZF(x2)
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George Lazarette

Link Posted 14/04/2012 - 16:29
ChrisA wrote:
George Lazarette wrote:
I find the assumption by many people here that Pentax doesn't know the principles of supply and demand to be comical.

I'm sure they do. However, there are other reasons for putting prices up.

Quite so. At first glance, imposing much higher prices does seem likely to be counter-productive. That is why I suspect there are reasons for their actions which don't immediately meet the eye.

G
Keywords: Charming, polite, and generally agreeable.

fritzthedog

Link Posted 14/04/2012 - 16:50
I have just purchased a bag of their own brand peanuts from Sainsburys and noticed that the price has gone up by 30% since last week.

Does this mean they have been bought out by Ricoh?

Will this make me switch brands? No - I like their peanuts

Will this make me stop eating peanuts? No - I like peanuts

OK - a stupid (but true) comparison.

Bottom line is that the most likely reason for the increase is:

1. A need to cover increased costs
2. A desire or need to increase margin/profit
3. A combination of the above

The most likely being a combination.

As a consumer - the reason is largely irrelevant and the only real consideration is - are you prepared/ able to pay the new price being asked? - it is unlikely that the reason for the price increase will figure in your purchase decision (few of us buy based on our 'principles').

On a personal note - the price increases are likely to save me money as I am now less likely to 'need' another new lens in the foreseeable future.

Carl
No matter how many lenses I have owned - I have always needed just one more

DrOrloff

Link Posted 14/04/2012 - 17:49
George Lazarette wrote:
Dr Orloff.

Putting up prices will ALWAYS increase the margin, which is the difference between cost and sales price.

Depending on the elasticity of demand, the advantage of a higher margin may be outweighed by a more than proportional fall in sales volumes (as you said).

Luxury items such as lenses fall in the highly price elastic bracket.

This is the fear. However, none of us work for Pentax, and none of us are privy to the information on which Pentax has based its marketing decisions. I find the assumption by many people here that Pentax doesn't know the principles of supply and demand to be comical.

As for Ricoh being in bad shape, it's true that they had a bad year in 2009. They were not alone, of course. They made reasonable profits for the years to March 2010 and 2011, and a profit for the half year to September 2011. They are forecasting a profit for 2012 which will be approximately 10% up on 2011, which in turn was 10% upon 2010.

So I think the bad shape stuff is historical. If my income was both reasonable and rising 10% every year, I would not be complaining.

G

Thanks for the lesson George. When I refer to margins I meant, as most people would, the difference between revenues and costs (ie: sales less cost of sales rather than sales price less cost price, the latter being theoretical until you sell something). Its obvious from the context and because I'm not actually stupid.

Your figures paint a picture of a company doing quite well, but goodness knows where you got them from. In 2009 profits plunged 94% to a small amount (0.3% of revenues). 2010 was better but still a poor year, 2011 was 30% down on 2010. For 2012 a profit was originally forecast and that was later revised to a loss of around half a billion US dollars. Had that not been for a major cost cutting exercise through job losses the performance would have been worse. Ricoh is not doing well.
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Last Edited by DrOrloff on 14/04/2012 - 17:52

JAK

Link Posted 14/04/2012 - 17:52
Isn't it normally down to supply and demand?

If more people want fritzthedog's peanuts and there have been growing problems meaning they are in short supply, up will go the price. If there has been a glut they'll be thankful to give them away.

Supermarket prices though seem so volatile though, they'll put the price up by say that 30% one week and reduce it to something even less the week after. Who knows why?

Another time they'll hide a price rise with a special offer, hoping no one notices.

John
John K

DrOrloff

Link Posted 14/04/2012 - 17:56
Food prices are highly sensitive to production and demand for what is essentially a scarce resource. One crop failure and prices can jump significantly.

Camera lenses are an entirely different matter. The 40% odd rise in price of a 12-24 I suspect is neither due to massive increased demand (unless the Chinese are going nuts for them) or production costs which are predictable.
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WobblyGoblin

Link Posted 14/04/2012 - 18:16
japers45 wrote:

I could sell all my gear for more than I paid and start again with another brand- hadn't considered that one before, nice of Pentax to give me that option though.

Strangely enough I was doing a quick comparison today of selling my old kit and buying the closest equivalents secondhand for one of the other brands (just out of curiosity). The availability of secondhand lenses for Pentax's competitors seems to keep prices down. Exact equivalents aren't available and stabilisation would be lost on most lenses, but even at current secondhand prices it looks like I could raise cash doing this. If secondhand Pentax prices rise due to these latest increases then that gap would widen

Not that I'm looking to move - I'm quite happy with my lens collection. My days of buying new Pentax lenses are most likely over though.
You will only prise my 43Ltd from my cold, dead hands...
Last Edited by WobblyGoblin on 14/04/2012 - 18:21

JAK

Link Posted 14/04/2012 - 18:30
DrOrloff wrote:
Camera lenses are an entirely different matter. The 40% odd rise in price of a 12-24 I suspect is neither due to massive increased demand (unless the Chinese are going nuts for them) or production costs which are predictable.

Who knows why really, but it could be production issues following the tsunami.

Like to think the Chinese are going nuts over fritzthedog's Sainsbury's Peanuts.

John
John K

DrOrloff

Link Posted 14/04/2012 - 19:17
No, it just doesn't work like that. The tsunamis/Thai floods may have affected the the ability to produce but not the cost of production. If so you would see overnight 40% cost increases with similar goods, TV's, computers, other brands of lens, etc, etc. Plus you would see similar price increases with all Pentax lenses, but the rises are not like that.

This is pretty much a unilateral decision by Ricoh. It could be that they have analysed Pentax prices and found them way too cheap compared to the competition, past strategic errors by Hoya that they are 'correcting'. That's my best guess.

This works out very well for me as I am now satisfied with my lens collection and I can sell some surplus lenses at higher prices. My only concern is Pentax going bust.

You can't always just trust big companies to get it right. There are many examples where their decision making is risible. I hope this isn't one.
You can see some of my photos here if you are so inclined
Last Edited by DrOrloff on 14/04/2012 - 19:18

arno

Link Posted 14/04/2012 - 19:28
I'm just pleased I jumped on a new 15mm Limited from Flash Camera last week for 399. Already gone up to 459 there

Mike-P

Link Posted 14/04/2012 - 19:31
arno wrote:
I'm just pleased I jumped on a new 15mm Limited from Flash Camera last week for 399. Already gone up to 459 there

I was going to buy one from Ian just before I went to Spain for a fortnight but worried about delivery while I was away so left it until I came back.

Of course sods law dictates a price rise while I was away.
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Last Edited by Mike-P on 14/04/2012 - 19:31

George Lazarette

Link Posted 14/04/2012 - 19:36
DrOrloff wrote:
[quote:3496ace15f="George Lazarette"]Its obvious from the context and because I'm not actually stupid.

I know you're not stupid! But margin in the UK is a word that is normally used to describe the percentage difference between unit costs and sales prices.

Quote:

Your figures paint a picture of a company doing quite well, but goodness knows where you got them from. In 2009 profits plunged 94% to a small amount (0.3% of revenues). 2010 was better but still a poor year, 2011 was 30% down on 2010. For 2012 a profit was originally forecast and that was later revised to a loss of around half a billion US dollars. Had that not been for a major cost cutting exercise through job losses the performance would have been worse. Ricoh is not doing well.

Goodness knows is right. I seem to have totally misread their interim results statement for September last year. Egg on face!

2012 results will be out on 26 April. Presently they are reporting an operating profit of 38.5 billion yen for the first 9 months, but they have then made write downs of 75 billion for the quake, early retirement, and the effect of tax changes.

The problem with trying to interpret results like these is that one doesn't know whether they have taken the full hit, and can now move on, or whether there is more bad news to come.

It is worth noting that they still have substantial cash reserves, and will pay a final dividend, although lower than last years.

The fact remains, however, that the world economy is still far from buoyant, and results like these are to be expected (see Sony, for instance), unless you're a company like Apple with sexy products to sell. Copiers aren't so sexy.

You're right to say they are not doing well, but not necessarily right to say they are in bad shape. Could be better? Yes, of course, but they could be much worse, and the problems would appear to be caused largely by events outside their control rather than by poor management.

G
Keywords: Charming, polite, and generally agreeable.

Pentaxophile

Link Posted 14/04/2012 - 20:23
arno wrote:
I'm just pleased I jumped on a new 15mm Limited from Flash Camera last week for 399. Already gone up to 459 there

After the previous price increase they went up to well over 500.00 and were selling s/h for over 400.00, so you got a great deal there! I am sure that in time the prices will fall again, as they did last time.
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Mike-P

Link Posted 14/04/2012 - 20:33
Pentaxophile wrote:
I am sure that in time the prices will fall again, as they did last time.

That's what I have been thinking all through this (and other threads).
Haven't prices only gone back to what they were when Pentax did a massive price hike a year or so back?

Prices have dropped quite a bit since then (especially on the LTD's and the 12-24mm) so this would be Ricoh's way of bringing the value back to the brand.
No equipment list here but thanks for taking an interest. My Flickr
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