Originally Posted by wewantflair

Because the majority of retail consumers don't buy the cheapest item?

Customers buy what they perceive to be the greatest value item, not the cheapest item. This is a basic tenet of retail that is ignored in every one of these threads. Until we see the marketing, in-store kiosks, and product placement, we really cannot assume anything about how the customer will react to the BD products. In fact, as has been alluded to be elsewhere, we might discover that Toshiba seriously undervalued their players by pricing them so low, and there might be customer backlash against this when the BD players are released.

There are often unintended consequences of dumping your product on the market for less than it's worth; customers might have an innate/irrational prejudice against your item due to the "cheapness" they might come to associate with it.

I have a (admittedly anecdotal) story that should help elaborate. It was told to me during my last few days while working at Best Buy while in college. We were just rolling out the Reward Zone program. There were two initial test runs of the Reward Zone program. The first involved giving customers in Minnesota free Reward Zone cards and then tracking their purchases; response to the program was tepid at best. The company then began charging 10 bucks for a card and interest soared; by demonstrating that the card had value ($10), the customer was more likely to show interest in it. An interesting side effect occurred: too many RZ participants! Best Buy's solution was to raise the price to the threshold at which their target number of customers would participate.

To summarize, low price is not always the best option, especially when it comes to luxury items that customers buy as trophy pieces. Take a look at plasma tv stats - your best-selling brands aren't Samsung and LG, but Panasonic and Pioneer. These are being sold to customers who will never know how to set the black level on these sets, who will never be able to understand why the Panasonics and the Pioneers are better than the Samsungs. But the higher price point and the word of mouth from employees is often enough to steer people in these directions.

All this is for moot if the Toshiba winds up being a substantially better product than the BD players; however, those who say that price is a primary factor here simply do not understand retail pricing.

Originally Posted by wewantflair

Because the majority of retail consumers don't buy the cheapest item?

Customers buy what they perceive to be the greatest value item, not the cheapest item. This is a basic tenet of retail that is ignored in every one of these threads. Until we see the marketing, in-store kiosks, and product placement, we really cannot assume anything about how the customer will react to the BD products. In fact, as has been alluded to be elsewhere, we might discover that Toshiba seriously undervalued their players by pricing them so low, and there might be customer backlash against this when the BD players are released.

There are often unintended consequences of dumping your product on the market for less than it's worth; customers might have an innate/irrational prejudice against your item due to the "cheapness" they might come to associate with it.

I have a (admittedly anecdotal) story that should help elaborate. It was told to me during my last few days while working at Best Buy while in college. We were just rolling out the Reward Zone program. There were two initial test runs of the Reward Zone program. The first involved giving customers in Minnesota free Reward Zone cards and then tracking their purchases; response to the program was tepid at best. The company then began charging 10 bucks for a card and interest soared; by demonstrating that the card had value ($10), the customer was more likely to show interest in it. An interesting side effect occurred: too many RZ participants! Best Buy's solution was to raise the price to the threshold at which their target number of customers would participate.

To summarize, low price is not always the best option, especially when it comes to luxury items that customers buy as trophy pieces. Take a look at plasma tv stats - your best-selling brands aren't Samsung and LG, but Panasonic and Pioneer. These are being sold to customers who will never know how to set the black level on these sets, who will never be able to understand why the Panasonics and the Pioneers are better than the Samsungs. But the higher price point and the word of mouth from employees is often enough to steer people in these directions.

All this is for moot if the Toshiba winds up being a substantially better product than the BD players; however, those who say that price is a primary factor here simply do not understand retail pricing.

Originally Posted by Qui Gon Jim

If this is true, then why is WalMart, who has made its fortune selling cheap products the biggest retailer in the world? Why are there dollar stores all over the place?

People DO buy the cheaper item. Snobby show offs equate price tag with quality.

Originally Posted by Blitz6Speed

People who buy low grade will not be intrested in better picture quality then DVD. Oh, and they wont have the cash for it, as evidenced by shopping at the 99 cent store.

Originally Posted by wewantflair

You mean like how average joe consumers opt for the cheap Creative Labs, Dell, iRiver, etc. mp3 players over the more expensive and less functional iPods?

Originally Posted by Adam Tyner

...but the difference there is that when people think mp3 players, they think iPod. I would argue that neither HD DVD nor Blu-ray are synonymous with high-definition video in that same way.

Originally Posted by pinata242

I would argue that HD-DVD *IS* synonymous with high-definition video in a very recognizable way that Blu-ray is not. I mean, what goes with an HDTV better than HD-DVD?

Originally Posted by Suprmallet

It's far too early to tell which format, if either, will become synonymous with next-gen video.

Originally Posted by pinata242

I would argue that HD-DVD *IS* synonymous with high-definition video in a very recognizable way that Blu-ray is not. I mean, what goes with an HDTV better than HD-DVD?

Originally Posted by pinata242

It seems crazy to me for Sony to even try to price a stand-alone BR player at 66% more expensive than their own PS3 which pulls double-duty.

Originally Posted by Burnt Thru

Initially name recognition is in favour of Toshiba's format, no doubt. But look at who is making those HDTVs: BDA companies for the most part such as Pioneer, Panasonic, Sony, etc. Isn't there every chance they'll start advertising BD with their TVs (stickers, banners, in-store set-ups) which are selling now in their millions. Focusing on the consumers most likely to buy into HD optical media, rather than the scatter-gun approach of broadcast advertisments. Where will HD DVD be getting similar targetted marketing from? So far it looks as though Toshiba might have to finance their marketing campaign singlehandedly!

Originally Posted by Burnt Thru

On the other hand there are still DVD players more expensive then PS2 and Xbox/360 (which are not bad players themselves) so clearly there's a market for perceived quality.