Price maintenance on TVs: A winning strategy?

As a recent RetailWire panel discussion points out, the 2007 Supreme Court ruling (“LeeGin”) makes it easier for manufacturers to conduct price maintenance than in the past. In this case, Sony and Samsung seem to be following the Apple model, where there is very little deviation in selling price whether in their own stores or at discounters. And Samsung has been more successful in the mobile phone business avoiding widespread discounting of its products while it continues to gain share.

The problem here is that TVs have become a “commoditized” category for the last several years…as manufacturing costs have fallen, so have the retail prices for flat-screen TVs with similar features. In this case, Sony and especially Samsung are setting themselves up for rivals (like LG) to be very aggressive on price. If you were a consumer, would you rather pay $100 more for a virtually identical TV?

The current price wars have made it tough for electronics retailers, from Best Buy to regionals, to make margins in this category. This move might help them in the short term, but only if Sony and Samsung are willing to market themselves as superior products. And, meanwhile, we are all waiting for the other shoe to drop: The eventual launch of a truly game-changing TV from Apple.


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