Piano World Home Page Forums Our Most Popular Forums Digital Pianos - Electronic Pianos - Synths & Keyboards How does company parameters affect the price?

Under "parameters" I mean location, size, number of employes, labour cost etc. I guess it's obvious that market giants are able to buy materials at wholesale prices (what difficult for small companies) and all that economy stuff that should be counted.
Let's fantasize a little bit. Imagine that all the well-known DP manufacturers in the world started producing a piano model that is literally the same from brand to brand, but they wouldn't have known about the sameness. Just independently make the same instrument, and only the brand name on it would be different. Which company pricing do you suppose to be the lowest? And who the highest? Would there be any difference at all? Who would ask some additional money for their name onboard?

For anyone (like me 🙂) who does not have insider knowledge of how S & M decisions are made by DP manufacturers, your question under title is obviously difficult to answer .... although it is fairly easy to imagine that whatever the answer is, it likely applies to most if not all manufacturers small-to-big of any retail product, and also easy to say that the really big companies have an easier task of justifying inflated MSRP/retail pricing compared to small makers.

Your hypothetical fantasy question, tenuous as it is, is easier to answer because it will share some of the answers likely to be found for the question under title; big companies making anything, be it pretzels, pianos or anything in between, have more tools - which translates to clout/cache/connections/market access & manipulations - to set its product prices than do their little company competitors.

As well as location of manufacturing locations, costs at those locations including storage of both the materials and finished products, transportation of materials to those locations and transportation costs of the finished product. In addition, manufacturing processes are involved: automation or not, are they finishing the cabinets or purchasing them already finished, etc.

While "larger companies" can get economies of scale, those come at an overhead cost of more Sales, General, and Administrative expenses (the non-production people). Economies of scale also are limited when dealing with niche products such as musical instruments.

Even though the finished product is identical the journey from concept to delivered product will always be quite different.

As an example, I used to work for a company that produced commercial roofing. When we won the bids for Walmart, Walmart had a contractual requirement that just seemed weird. We had to let their people into our plants to examine and optimize our roof production processes. If they cut our costs then we reduced the bid prices.

Yeah, right. Like Walmart people could tell US about better ways to produce roofing materials. Well, they did. They cut our costs with no sacrifice in quality, an improvement in quality, increased our profit margin, and as a result got their roofs at a lower price.

I don't know if Walmart still does that but it was one of their hidden values. They taught their suppliers how to be cheaper, better, and faster than they originally were. That meant we became a better company overall in our markets for all of our customers and won us more contracts than our competitors did who did not work with Walmart.

These days, geopolitics rule. Value added microeconomics really only matter in countries that produce digital pianos.

While i suspect there is some data out there in the public to confirm or contradict what i’m about to say, i say this off the top of my head and based mostly on observations here plus a little experience with shopping for DPs; Yamaha is clearly the overall biggest company among the rest of the players big and small fishing in the digital piano pond under question here.

As to which one is second biggest overall, there is a temptation to say “Roland” but i’m not sure given Casio’s long existence as a producer - like Yamaha- of many & various categories of digital products for which DPs are just one category. Yamaha plays in many ponds to include motor sports. Casio plays in many ponds, mostly if not all digital that i am aware of. Roland plays in a handful of music-gear ponds and Kawai currently plays in 2 - APs and DPs. I guess Casio is a bigger overall company than is Roland, but if based solely on DPs, its probably Yamaha, Roland, Kawai, Casio and all the rest. Based on all categories of products, it’s Yamaha and all the rest.

Right or wrong, this may help loosely outline the borders within which your fantasy might exist.

Any company apply to its products the price which will maximise the profit - i.e. the the the price where the result of the equation [price*units sold] returns the highest value.

The cost of raw materials, labour etc is quite secondary: the main element in price formation is the understanding of the maximum price a customer is willing to pay for the product.

The highest the price will be, the less the number of units sold, and viceversa.

There is a point where this equation returns the highest possible value.

Price also varies tremendously between different markets, in a way that seems really out of whack with global world. For example, in Canada, Yamaha CLP-785 is priced just below CA-79 and a little above LX-705 (within 5% of each). In other markets, (Europe), it is priced in line with CA-99 and LX-708.

There are products actually made by a single company in different parts of the world already. One that comes to mind is Fenda. Say their Telecaster is made in USA, Mexico and one other. The USA made versions in my opinion are always better than the Mexican but this could be argued of course.
The thing is this instrument is fully amortised as far as development goes but the prices vary across the world for both.
This is mainly as in the UK due differing import duties etc and handling mark ups but your point is covered by the various employment laws ans added costs to product in different regions.
The bottom line is that they are more dependant on where the manufacturing base is and the constructs and added costs of the destination countries they are sold too. But like I said above in the case of Fenda there is also some unfathomable difference in the result to add on the exact same product too.

Interesting, but it seems to mee that Yamaha is the only manufacturer that shows prices on it's site. Visiting Casio, Roland, Korg, Nord etc. sites you'll see no price tags.

Sort of. They all seem to practice their MAP nonsense (the Minimum Advertised Price that a dealer is allowed to show online), thus forcing people to contact a dealer. MSRP is just the maximum that anyone should ever pay, unless a pandemic and shortages allow dealers to sell at above MSRP, as is happening with some cars now.

MAP is what several dealers I contacted wanted. Except for the one I purchased from.

Play stupid games, lose sales to people who are ready to buy.