Nikon responds- "rapid deterioration in the market occurred and fiercer competition"

jfriend00 wrote:

I find it comically entertaining when people make this point about the D700. Do you seriously think Nikon would have been more profitable if they never created the D700? That's ridiculous.

The D700 product put them on the map with FX with the enthusiast consumer/prosumer. The D3 was just way, way too expensive for most people. The D3 was great for pros, but it was the D700 that launched their FX line with the non-pro (many pros bought it also).

By your thinking, the D600 and D800 are stealing D4 sales too because if you don't need high fps or a big body, then you can get all your need (and actually more pixels) with either the D600 or D800. So, should Nikon stop making the D600 and D800 because they area also taking away D4 sales? Certainly, if Nikon didn't have the D600 and D800, they'd sell more D4s. But, duh, they'd sell a lot less overall. So maximizing D4 sales is not the primary objective at all. Maximizing overall sales/profit is.

Companies make multiple products because they reach a LARGER portion of the market and make higher profits by doing so. Every additional product overlaps some in customers with other products in the line, but you need more than one product to meet the needs of more customers. Companies usually don't make higher profits by ignoring portions of their market - particularly in a declining overall market. That's exactly when you need to attack every relevant segment of the market.

I am quite sure that Canon won't leave the $2000-$3000 sports/action market unserved so if Nikon wants to cede it to Canon, I'm sure they would happily take it.

I expect some new products to have issues. It's how a company deals with it that matters.

I once read an excellent book called Moments of Truth written by the CEO of a Scandinavian airline where he discussed how every interaction with a customer, particularly when things go wrong is an opportunity to win that customer's long term loyalty. In fact, you can actually build loyalty with the right strategy through a problem, even though the customer had a problem. This is because trust is built through experiences and if a customer has a problem and you treat them well and resolve that problem, they actually feel stronger and more loyal to your brand than if they never had the problem in the first place. The opposite is also true. If you handle it poorly, you lose trust and loyalty.

Nikon lost trust and loyalty from many with the way they handled their D800 problems.

Perhaps some finance guys clamped down and tried to limit the warranty/returns financial exposure, but Nikon lost a lot of goodwill with the Nikon community and future buyers. Even now, you can't really trust that any D800 you might encounter in the marketplace (new or used) is good.

The question is not whether Pioneer survived or not. The question is whether a different handling of the problem would have made the company stronger than it is today or would have made that product line and other related products more successful in the future.

Nobody says that the D800 handling will kill Nikon. But, many believe they are going to be less successful now because of how poorly they handled it than if they had done things differently.

My guess is that some early confusion about what the problem really was, a slow-to-react HQ and some poor lines of communication between HQ and field repair offices put them really behind the 8-ball and by the time they actually understood the problem, the finance guys clamped down and told them to limit how much this would cost to keep the current quarter's numbers from going south.

That would be a short term decision at the cost of long term brand trust and loyalty (which is not uncommon for decisions motivated only by short term finances). But, many times that is not the right decision for the longer run because brand trust and loyalty is even more costly to build and losing it costs future sales.