A GRAIN OF TRUTH: Price fixing in the hi-fi industry

One of the reasons manufacturers try to encourage their retailers to sell at RRP is that it can help protect resale values of second hand goods. If you look at the position with a hifi manufacturer that for example encouraged customers to upgrade power supplies and accessories etc then part of the decision for the customer would be based around the cost to change, achieving a better price for his old kit enables investment in new kit.

Aside from the fact that manufacturers want a profitable retail network who can invest in doing the job more professionally than the retailers of competitive products, thereby ensuring better sales.

High end brands in many different market sectors try to encourage retailler profitability and orderly marketing, this enables customers to 'invest' in products. The easiest way for manufacturers to control pricing is to reduce supply but that's a tad more difficult these days.

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