Is it possible for a high end manufacturer to overprice their goods?

bache

@mihorn Try to find the you best speakers , just see small bookshelf , what s price ? more than $ 100, 000 ?

I only make 1 model bookshelf speaker ($9k/pair) now. Is it overpriced? Please remember my WT speakers are purist/cleanest sounding, closest to the original music, and the only no veil natural sound speaker in the world and 150 years of audio history. Alex/Wavetouch audio

Very few of these extremely priced pieces of equipment are sold relative to the rest. Egos Drive most of these sales. Sitting in a room with extremely high priced equipment is hard to resist for those who have the funds, and many people do have the funds for these expenditures. Many of them are very gullible souls.

The more seasoned and experienced listeners who really know what they’re doing can get the same Quality, and most often better, for considerably less.

YouTube channels are culprits in promoting this exceptionally high priced gear, which serves to only stretch prices in a manufacturers lower end models.

Even the Rich need to hold someone’s hand and there’s plenty of outreached hands. 

Lots and lots of overpriced gear out in the market. But hey if it sounds good to you and you see the value that is all that matters. Some would say I paid too much for my set-up. If they only knew the deals I got, they would be shocked. 

It is your money and life. 

The "market distortion" aspect as suggested by @hilde45 has merit in my opinion. Here’s this audio market where everyone plays nicely and introduces "new products or new versions" with incremental price increases of, say 10%-20%. Then, out of nowhere some manufacturer has the audacity to take that metric and increase it by a factor of 2 over previous "norms". This presents a number of possibilities for other manufacturers. The "sticker shock" of their top end products is has been obliterated by another company (thank you!) so their products appear to be a more reasonable cost/performance value. So, they would feel justified in raising the price, not just 20%, but 40% and still be very much in line with the perception of high performance AND high value. So, yes, a market distortion could follow the introduction of steep pricing into the marketplace.

A little about the luxury market: Centi-millionaires, traditionally, don’t loose sleep agonizing over whether or not they received strong price/performance when making a purchase.. They are primarily concerned with owning something that really IS something worth owning. Sure, they’ll brag about the "guts" or "workmanship", but their true motivators may be the intangibles that can’t be measured. What is the prestige in owning the best of the best actually worth? And, if it IS expensive, wouldn’t it be viewed as a badge of honor rather than a shockingly high-priced trophy?

Customers are also different. Many who engage in the ultra highend of a product category are true enthusiasts who love what they are doing and appreciate every nuiance their extraordinarily expense product does for THEM. They ARE getting great value from something they have heavily invested in.

Back to the marketing considerations, I think we could look at various price ranges to see if a significant and meaningful gap exists whereby a segment of the buying public is being ignored, or has been abandoned altogether. As a result of that 2x product introduction, is there still a healthy market for legitimate high-value products at 1/2 that price, and somewhere in between? IF that 2x product negatively impacted the viability and availability of those other (lower) price ranges, then some measurable damage has been done.

I suppose I could purchase a pair of $133,000 speakers if I want to economize a lot elsewhere in our lifestyle... If my wife would let me, of course 😎. She needn't worry. It ain't going to happen. Our values and goals are aligned.

Once said, the comments made by Pope Francis and the criticism of materialistic values is a slippery slope. Consider a $133k or $3k pair of loudspeakers. If you get on his slope then you have to ask, "Why should we enjoy any stereo or hometheater system when there are poor people living in cardboard boxes?" We also would then have to ask, "Who's to decide how much we are allowed to spend, if anything, on loudspeakers?" 

Hopefully Pope Francis is not making the decision. Fancis sounds like he forgot the story of the woman honoring Jesus by pouring expensive perfume on Him. Some of the people in attendance criticized the woman because the perfume could have been sold and the money given to the poor. Jesus rebucked them for numerous reasons. And if I unpack this Gospel story, the economics major in me makes me see that there was a market for the perfume that honored Jesus. This means that somebody developed the perfume because they recognized the demand for expensive perfume. For the reasons cited in the Gospels, Jesus didn't have a problem being honored with expensive perfume. Implicitly, it would seem that Jesus didn't have a problem that there was an expensive perfume and a market for it.

This brings us back to $133k speakers. If there is a market for the attributes the speaker offers, the law of supply and demand dictates that there will be some quantity demanded, that can be zero, by those who have the means. On the supply side, any product is going to have R&D costs that are outside of direct labor and material costs. Then there is also the general and administrative costs (G&A) associated with a product as well as sales and marketing expenses. The R&D, G&A, and S&M can be quite high relative to the direct material and labor cost. The speakers will be priced at the level that maximizes profits.

Bottom line: If you look at only the material cost and direct labor part of a $133k pair of speakers, you will find the speakers over priced. If your look at the full context of a speaker's manufacturing costs, you might or might not find the speakers a fair value at market price. If your want to factor in some moral values about what people should be able to afford, all bets are off.