Should someone change the tactics of price-wars?

[tk1989]

Now, see the thing is, i dont understand ur story about the Ipod, as Ipods have a set price by Apple. If you go anywhere (well, basically anywhere), the price of Ipods will be at the same level, take or give a few quid. This is because Apple give the retailer money to keep the price above a certain level, and they do this for a few reasons. Mainly however, it allows Apple to market and sell the ipod effectively through their own stores at a large markup without having too much competition from other retailers, as all other retailers are selling at certain set prices which they wont go below. This allows Apple to make a hefty profit on all their sales; many people will buy from there because itll be impossible to find it cheaper anywhere else and also Apple wont be squeezed out of their own market. Now see, Sony uses the same system. Sony and Apple use this system more than most other producers of electronics, because they are retailers as well as producers. While Sony stores arent as common as Virgin Stores or HMV stores, there will probably be at least one in most major cities. Now see, one of the reasons why the PS3 is basically the same price everywhere is because Sony uses MAP (Minimum Advertised Price), which is the thing i explained in the last paragraph. Sony gives retailers money to help advertise their product if they keep the price of the PS3 above $600, or £425 here in the UK. This means that Sony, effectively, cant be squeezed out of their own market by other retailers who are selling their product. All electronics tend to be so similar from brand to brand and model to model that low prices play a larger role in determining which of them we ultimately buy. When you buy your PS3 though, its understood that your getting something different and unique. Sony knows this, and therefore set their prices to reflect this. Despite all this... it doesnt seem to be working very well for them :P