An Explanation of Nikon's bizarre marketing practices

Started Mar 13, 2013 | Discussions
jthomas Regular Member • Posts: 190
An Explanation of Nikon's bizarre marketing practices
1

This is from photographylife.com post on the "A."  Perhaps this explains what seems, on the surface at least, to be completely crazy strategies.  Food for thought.

I don’t think that there is a management problem here at all, in fact I think the exact opposite is true. I used to work for Nikon’s marketing engine not too long ago, so please don’t think this opinion is biased. What I saw when i worked for them was this, especially as of late: Nikon releases an awesome product (D7000). It wins awards, accolades, and such. Roughly around the same time they release another product (1 series) that caters to a completely different demographic, in this case mainly female enthusiasts. The product doesn’t do well at all, due to the price. In order to flush their inventory, Nikon cuts the price almost in half to make way for the updated product (J3). Now Nikon is left with an abundance of sensors that they over-ordered for D7000 sales. They got cheaper for Nikon to purchase over the years, so they figure you can’t have a camera without a sensor, right? They begin to build new camera models around the sensors themselves. Now comes the time to update the parent camera body for the same sensor, in this case the D7000. The D7100 is released, but Nikon still has a lot of the older sensors left over. So what do they do with them? The design a new camera that houses the old sensor that fits between the two demographics they were focusing on with the D7000 and Nikon 1 series. They keep the price high, so it doesn’t sell off immediately. This attacks Nikon surplus from a few different angles. First, it rapidly gets rid of their in-house inventory of the 16.2 MP chips and puts them on the shelves. A chip in a warehouse without a camera body can’t sell, besides a lot of major resellers that are licensed to sell Nikon are, in fact, under contract to buy a specific quantity of new products when they are released. The Coolpix A is marketed to those who want a higher quality camera than the 1 Series, but don’t want a bulky DSLR. Hopefully with the few Coolpix A’s that sell at full price, it will cover the gap of loss over they newly discounted D7000. The major thing this price point does? Gets all the Nikon J1s, J2s, V1s, and V2s off the market, never to be seen on the shelves again. Once the majority of the inventory for the older Nikon 1 series has come down to an acceptable level, the Coolpix A will drop to about $750-800 around Christmas 2013. I expect it to drop around the $500 range by summer of 2015 before Nikon releases a new flagship compact. I’ve seen this with other models before, especially the D60 vs P7000 vs P7700 lineup. Sometimes Nikon produces cameras that they never intend to sell. They just use them to keep their name on the market and to fund other designs and current R&D. Remember, just because customers didn’t buy the camera, it doesn’t mean that Nikon didn’t make money from the retailer.

Jim Thomas

Nikon 1 J1 Nikon 1 J2 Nikon 1 V1 Nikon 1 V2 Nikon Coolpix P7000 Nikon Coolpix P7700 Nikon D7000 Nikon D7100
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jwaif Regular Member • Posts: 469
Re: An Explanation of Nikon's bizarre marketing practices

Jim,

The source for this is found in the comments on this article.

John

jonikon Veteran Member • Posts: 6,378
Re: An Explanation of Nikon's bizarre marketing practices

Well it's someone's explanation anyway, but I don't think it's very credible and does not make a lot of sense really. For instance, why would Nikon take the R&D time and cost just to "use up some sensors in the warehouse". That makes  sense,  since all modern manufacturing operations use "just in time" supply chains anyway, so it is very unlikely Nikon has a warehouse full of unused 16MP sensors.

Another possibility is that the Nikon V1 was a marketing disaster for these reasons:

  1. The V1 was released during the depths of a global economic recession.
  2. Some harsh professional reviews of the V1, including the criticism that Nikon's choice to use a smaller 1" sensor for the 1 System cameras was a huge blunders of epic proportions.
  3. The perception by many potential enthusiasts buyers that the V1 did not have better image quality than a P&S, and was "just a toy" for the uniformed  Naïveté.
  4. The V1 was high priced at introduction. (Note, I did not say "overpriced" because I feel the new and excellent on-sensor PDAF technology for stills and video justified a high price, but maybe not that high.)
  5. The System 1 CX lens choices were few and without a single fast prime lens or UWA lens. The 10-30mm kit lens does not show what the sensor is capable of.
  6. No built in flash that required buying an expensive accessory flash unit. I think this was a real deal killer for many. (I know it was for me.)
  7. Panasonic and Olympus had their m4/3 camera marketing in high gear and spitting out new camera models and lenses at good pace, and discounting the discontinued models.  
  8. The Nikon J1 ,with it's built-in flash probably did more to hurt V1 sales than any other single factor.

Well that's my theorizing on the Nikon V1 debacle, and my only thought  on the  Coolpix 'A' is that is a "me too" camera to compete with similar offerings from Canon, Sony, and soon Pentax.   
- Jon

 jonikon's gear list:jonikon's gear list
Nikon Coolpix A Nikon 1 V1 Nikon 1 V2 Fujifilm X-T10 Fujifilm X-T2 +12 more
photoreddi Veteran Member • Posts: 7,939
A bizarre explanation of Nikon's marketing practices

jthomas wrote:

This is from photographylife.com post on the "A." Perhaps this explains what seems, on the surface at least, to be completely crazy strategies. Food for thought.

David McKiben's theory is interesting and may well be correct about using the "A" to make use of excess D7000 sensors, and this would also avoid the great expense of having to fab a new sensor which couldn't recoup its costs if it was used only in the "A". Photography Life's Romanas Naryškin admits that it isn't certain that the A's sensor is the same as the D7000's sensor. At the very least, even if the base sensor is the same, it would probably need to have its own microlenses to enhance image quality since the A's lens would be much closer to the sensor than DSLR lenses could ever hope to get to the D7000's sensor.

What's bizarre is McKiben's theory that Nikon knowingly produced the "A" thinking that it would kill 1 Series sales. The "A" is nothing like the J1, J2, J3, V1 and V2, and the market for these cameras is most certainly NOT the market for the "A". Despite being identified as a Coolpix, the "A" should overwhelmingly sell to photographers whose main cameras are DSLR, not Coolpix P&S cameras. Nikon may have called it a "Coolpix" because it would be recognized as a high image quality camera and as such would provide a halo effect to inspire customers to purchase many more of Nikon's slumping, less expensive Coolpix cameras.

Definition of 'Halo Effect' The halo effect is a term used in marketing to explain the bias shown by customers towards certain products because of a favorable experience with other products made by the same manufacturer or maker. Basically, the halo effect is driven by brand equity.
...
  Investopedia explains 'Halo Effect' For example, if a customer buys product C which is made by company X, not because of the attributes or benefits of the product, but because he or she had a favorable experience with product D - another product made by company X, the purchased item is said to be prospering because of the halo effect.
A classic example of the halo effect is the relationship between the Mac notebooks and iPod. When the iPod was released, there was speculation in the market place that the sales of Apple's Mac laptops would increase, because of the success of the iPod. The belief was based on the halo effect, as customers who had a great experience with the iPod would buy a Mac computer simply because it is made by Apple Inc.

www.investopedia.com/terms/h/halo-effect.asp

Whether it's soccer moms getting great photos of kids flying down the field, grandpa capturing frisky puppies, taking advantage of the 1 Series' incredibly effective VR (5 stops worth of stabilization) or pro's using the FT1 with a V1 or V2 in order to turn their 300mm f/2.8 and 400mm f/2.8 lenses into mega-supertelephotos, the "A" could never be a substitute for them.

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