Quote:
Originally posted by Saltheart
The other thing i find interesting is the huge gap that's developing in fishing gear right now. There's junky stuff at dirt cheap and there's outstanding stuff at astronomical prices. Not much in between. Kind of strange the way that's going.
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Mike, what you've just said is quite interesting from a consumer perspective.
The market for gear is becoming increasingly bifurcated ... to a low-end or "value" segment vs. the high-end.
Nobody wants to play in the middle! I think there are several reasons.
1) At the low end, it's mass merchandisers like Wal-Mart/Target etc. that are squeezing certain manufacturers to provide even cheaper SKU's. Don't feel bad for folks like Zebco, though - they often make MORE dollar profits by selling to Walmart, as lower selling prices are offset by much higher volume as well as cost savings from more efficient distribution.
2) The high-end is exploding due to the fact that people have demonstrated a willingness to dish out $600 - $700 on things like water proof spinning reels.
Obviously, you won't see these models at Wal-Mart. You'll see them in your brick and mortar tackle shop, or maybe a specialty sporting goods retailer. Keep in mind that the market (in units shipped) for high-end products is SMALL relative to the entire fishing market, so fixed costs (plant ane equipment, corporate overhead) are spread out over a smaller customer base. Companies have to spend marketing dollars (not just ads but also rebates/incentives for retailers) to get their message across. All this adds up on top of what you would pay a premium for a differentiated product.
3) It's a marketing axiom that
it's dangerous to be in the middle. There are many "middle niche" consumer product categories out there that have been completely destroyed by players at the low and high end. Companies don't want to offer products positioned in the middle because they're worried about being squeezed from above AND below.