continued
And eveything else is made in batches, based on market projections. So when a batch sells out, then another batch is ordered, just like when a book goes into it's second printing.
thats fine if you have the line runtime available on the program, it would be possible to change the plant over for a month or so to produce more volume of an existing design but they could just as easily make some changes to the model with little downside. Batch producers have that adaptability at hand where volume producers OTOH could never do that as the line runtimes usually extend into years, sometimes (ideally) an entire plant is designed to produce 1 item.
see batch producers as short run, higher cost, newer product, and volume producers as long run, lower cost, older product and you wont go far wrong. Not always the case but thats business
And if too many are made, then the camera must be heavily discounted to move them before they get too old, and eclipsed by competitor's newer models.
for volume producers this seems essential, however the reality is the older product wont be so very different from the newer one, and customers will decide the slightly downscale spec is more desirable given a lower pricing point. This was exactly the position of 40D vs 50D.
When two or 3 issues collide though, say market conditions have lapsed, too much volume is online and management are reluctant to turn down the tap due to the cost of doing so b/se they predict this market condition will be short and they can ride it out, then the old stuff just has to go. Fire-sale time means its costwise better to ditch a product completely rather than suffer the additional costs of warehousing, likely in more forward locations closer to the point of sale.
Dependent on inventory management, batch producers have more capacity to deal with issues such as this as they have already sourced more cost efficient on site warehousing and have more buffer in their system, to a point. Volume producers tend to adjust the flow of product based on price, lower the price, make a package deal, to stimulate sales, offer free underwear or a new car with each product
I often wonder if those great prices on E520 two lens kits (sold for under $500 here in the USA) were the result of Olympus intentionally trying to build market share.... or simply having run way too many for the market.
Im sure that happens, but for Oly this second generation 'tweaked' product would be a whole lot cheaper to engineer and facilitate, and it can simply slide right into the existing logistic chain pioneered by 410 / 510. If costs are way down you can push for better market position which will have a tendency to reflect on your marketing futures. Certainly in Europe (actually Im thinking Germany) this worked very well for them
In the case of the E5, I really believe this camera was designed to be very profitable, and as a result the price was set high, and it will be produced in very small batches to avoid much discounting.
Reflecting on R&D costs that are likely to be very low (in comparison to E3) and parts commonality with Pen is high, the costs point to a very efficient design / manufacture operation while OTOH pricing seems stagnant guaranteeing higher profit. The tweaked E3 (just as 420 / 520 where) turns out to be so far a better camera that the market is less inhibited in picking it up (despite not exactly rave reviews).
Hard not to notice that the marketing for E5 was more viral, and low end, the whole thing fits together as a designed plan and I expect this product to sit it out for sometime, much like E3 did.
Incidentally, this is probably the way all high end cameras are run. Including those from Canon and Nikon. The top models aren't sitting on shelves in Walmart. They are special order items.
We should suspect that higher order cameras are not managed in the same way, and are not likely to be marketed to B grade (but high volume) facilities anyway. A 1Ds IX just isnt wallmarts bag sot they just set up an order facility and leave the shelf space for stuff that turns over quickly
Two appreciably different markets are handled in almost opposite ways. Pen simply must be onsite to be seen and handled with its accessories, and staff are trained to manage / assist that process. E5 OTOH is usually more of a known quantity and the customer more familiar with the gear, actually quite difficult to supply and market compared with by far more scaled down Pen.
With the variability of volume you could expect that E5 wont be on the shelf, or staff will be less familiar with it, rather like a Wallmart assistant trying to sell an M9. Thats why the fascinations of some here, who go to great lengths to figure out the weaknesses in the product plainly have no idea what is involved, I dont hesitate to use the word 'clueless' second time around. Expecting there to be no difference flogging a SAAB vs a Chevy is really just to silly for words, same people will insist they are right to go with it
Its certainly more desirable to have product on offer in a tangible way, but with E5 in particular in circumstances of high demand for throughput, Olympus will be tempted to strangle supply a bit and stay with the plan, keep pricing high, and let the 'maybe' customers sort themselves out in time, and if the cost of that is a few immediate sales, the calculated downside will be less than the cost of adequately servicing the market demands. Straight forward cost / profit calculation, it seems E5 exists for a different purpose than Pen does, and thats how it pans out.
If things really get out of whack, they (as batch producers) are more able to do something about it and adjust the supply chain sufficiently to make the best of the situation. I think it highly unlikely a volume producer would even consider doing the same thing.
--
Riley
any similarity to persons living or dead is coincidental and unintended
