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Will Samsung’s New Pricing Plan End HDTV Price Shopping? HD GURU Exclusive

February 13th, 2012 · 32 Comments · 3D HDTV, Connected TVs, LED LCD Flat Panels, News, Plasma

Updated 4:15 pm 2/13/12

The days of price shopping for HDTVs may soon come to an expensive end, according to industry sources, when Samsung rolls out its new 2012 mid-to-high end HDTV line in the coming weeks.

Along with the new sets, Samsung will introduce a new “fixed price” sales model that forces consumers to pay the same price whether they buy a new HDTV online or in a brick-and-mortar store.

We expect the plan to result in a cost premium for Samsung HDTVs of up to 15% when priced against discountable comparable models from other leading TV makers such as LG and Panasonic.

Samsung calls its new plan UPP for “unilateral pricing policy.”  Speaker/headphone maker Bose, watchmaker Rolex and jewelry seller Pandora have used this legal type of fixed-price strategy successfully for years. The plan will prohibit any authorized Samsung dealer from advertising or selling its products under a predetermined price, called the Minimum Advertised Price (MAP). If violated Samsung can void the dealer’s franchise and stop supplying product.

Click here for  our exclusive leaked list of 2012 Samsung MAP prices .

Continue past the break for all the details and a list of affected new model series.

By enacting this policy, Samsung hopes to slow the HDTV price erosion that contributed to recent record losses by Panasonic and Sharp and lower profits of TV retailers like Best Buy. Samsung is currently the number one volume seller of HDTVs in the US. Samsung is risking its dominant market position by gambling consumers will be willing to pay this new price premium.

Brick and mortar retailer Best Buy reduced its TV margins in recent years in a futile attempt to compete against Amazon and other online retailer’s lower prices. In the end, brick and mortar stores can’t afford to go head-to-head against etailers due to the former’s inherent higher operating costs. By selling price protected HDTVs , the only price advantage an online etailer retains is when it sells to customers residing in states that don’t require the collection of  sales tax on Internet purchases.

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The Samsung models with UPP pricing have Internet content streaming (called Smart TVs) and are 3D capable.  According to our sources at press time,  the series under UPP program will include the 2012 UNES6500 LED LCD  with a starting UPP price of $1599. Other UPP priced 2012 series include its UNES7100, UNES7500 and UNES8000 LED LCDs. The PNE6500 plasma series will start at a UPP price of $1619. The PNE7000 and PNE8000 plasma series are also expected to fall under the UPP program as well as Samsung’s upcoming 55-Inch OLED HDTV.

LG Responds

We asked a representative from LG if they were planning to incorporate a unilateral pricing policy. Below is LG’s response received via email from Jay Vandenbree, Senior VP Home Entertainment, LG Electronics USA:

“LG’s first priority is to continue to assure that consumers understand the value that LG brings to their lives through our products. We worked hard last year to revitalize our MAP program to assist our retail partners in doing that. We’re very happy with what we’ve accomplished on that front, and we’ll continue our focus on our primary goal. We’ll also continue to monitor the marketplace, but at this time, we just don’t think it’s the right approach to insert ourselves in between our retail partners and their customers in terms of selling prices, which is what a UPP program does. LG doesn’t have any plans to put out such a policy.”

We  asked for  comments from Samsung and other competitors. We will add all responses, if and when they become available.

 

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32 Comments so far ↓

  • SAMSUNGREP

    we absolutely do, whe the item is rung in the registers, the sign pops up saying its a part of the upp and no new price can be added no percentages off can be taken other than employee discounts, it works for teh consumer and profits are still up,

  • Chuck Daly

    Now that 5 months have passed, nothing has changed. In fact companies like Best Buy offer Samsung products more in line with Amazon. So the average profit margin on a Samsung TV is at its lowest. Samsung never enforces its Unilateral Pricing Program and probably never will.

  • Russ

    Its about time manufacturers get back to selling merchandise & allow honest dealers & skilled installers to make a living. The days of ‘whorehouse’ pricing of electronics will either end, or the economy implodes all the way. People, you can not make a living moving boxes around the country at 5% profit. Go Amazon, Go Sams Club/Walmart!! Go away that is.

  • Steve

    Everybody really needs to stop whining about prices. Remember that home entertainment is a business first. It’s not a charity race to see who can make the cheapest piece of crap for the lowest price. It’s about making money. Samsung doesn’t make food, it’s not like you’ll die without purchasing their product. They don’t owe the customer a lower price on their premium products.
    Apple products are pretty much the same price everywhere from authorized resellers and they make a great product. Apple didn’t get to be where they are at by having the cheapest price. Samsung is smart to do the same.

  • George

    So Samsung lost 17 Billion last year? Where did they lose it so I can go hunt for it? For all you pseudo-ecnomists, they did not lose anything. What they did is what other OEMs do. “They” cry over projected sales and correponding “Dream” pricing. When those dreams fall short of predictions, they say they suffered a “Loss. ”

    When a worker loses his job, he cannot say he “Lost” the unearned wages. He never earned them so he never received them.

    What is happening is that “They,” the industry in discussion, failed to meet sales projections, and their sales earnings. Those of you morons who support higher pricing and defend higher pricing strategies should pay the higher prices and let the rest of decide from whom we will purchase and what we are willing to pay. We vote with our dollars. Give us good products with decent warranties and earna decent profit, but stop whining about your “Losses.”

    You never hear a guy talk about how he voluntarily paid sticker or above sticker price for a car unless it is a collectible and he happens to have the monetary abundance to pay the premium price. For the rest of the car buying public, they talk about how good a “Deal” they had negotiated.

    That is the purpose of the sales/buying game. They don’t want to give you a good deal and we don’t want to buy unless we get a good deal.

  • jd

    For all of you who think its cool to raise prices to save brick and mortar stores. This is whats going to happen to you Samsung, because Americans are not stupid.
    Ever heard of Hyundai the car company that came as a nobody with there cheap prices and 10 year warranty…they took away Toyota and Honda customers each year. Also becoming very, very popular. So Sammy with you going sky high i know there will be a void that someone will fill with joy….

  • Robert G

    Funny thing. According to previous post, UPP on the 40ES6100 should be 1099. But Best Buy and Amazon have it for sale for 999 this week.
    So either not as strict as stated or prices are already dropping.

    Explained here
    http://hdguru.com/samsung-dealers-drop-hdtv-prices-on-2012-es-models/7630/

    HD Guru

  • morete

    Congress, the federal government and judges are nothing more than indentured politicians under contract by multiple corporate predators. We need corporations and we need capitalism. What we don’t need are corporate supremacists stripmining our economic freedoms.

    Samsung and Sony, under the guise of UPP will continue to erode sovereignty from the people thus making them nothing more than subordinates of the corporate behemoth.

    Corporate predators see waste as greater sales, corruption as power, tax escapes and consumer penalties as profit centers, unilateral control as their birthright. Our political freedoms as well as our economy is out of control.

    Polling shows that the American people are increasingly opposed to the privileges and immunities of giant corporations. They are aware that corporations (and their indentured politicians), have no allegiance to this country as they roam the world in search of serf labor and partnering oligarchs and dictators.

    If you believe that these multinational corporations, as artificial entities, should be our servants, not our masters, if you believe that they should not be able to take over the government so as to turn it against its own people imposing avaricious commercial values over civic values, then you know which path Samsung and Sony are leading us towards with UPP.

    Let’s not take our eye off of what really is behind UPP. Start getting involved and let’s stay free!

  • Tommy

    You guys are ridiculous samsung lost money last year and sold more televisions than anyone. They are doing this to support best buys and smaller companies like abc warehouse in MIchigan who provide jobs all over our country and etailers thrive on customers using brick and mortar stores as show rooms to purchase online and cheat out on sales tax which costs each state millions. I applaud them for actually trying to make PROFIT!!! In case you haven’t noticed there are companies producing hdtvs with epic failure rates and are made so cheap 46in flat panels for 399 get real

  • steven ridley roberts

    I THINK THEY DONE BETTER BE MAKIKN SOME TV IN AMERICA OR WE DONE NOT GONNA MAKE IT OK

  • John Nemesh

    Funny how some people here feel like they are ENTITLED to buy at a discount! Maybe you didnt notice, but flat panel manufacturers lost 17 BILLION dollars last year! If you want these companies to keep making your shiny toys, you need to pay what they are worth!

  • kellywilliams0448

    Sometimes people are been attracted to expensive product thinking that the product has high quality. I guess Sammy is trying to implement a similar tactics to its pricing strategy. I for one, I don’t judge quality products with respect to price and I’m comfortable with my LG 3D HDTV after all.

  • tedmathew90

    From the experience I had with LG’s a/s service center a couple of months ago show that LG Electronics is one of those few Companies that care much for their customers. Understanding the value and quality of TV sets, is what we need, and I believe LG has it.

  • SFLTV

    that’s OK, I’ll just wait until the end of the year when they’re desperate to get all the stock they haven’t been able to sell because of their stupid policy

  • AMATVA

    2012 will be year of LG taking the lead on Samsung. I am not a big fan of 3D but if I am spending any money on a 3D, it has to be the non-flickering passive 3D from LG. And now the universal pricing thing will only bring Samsung further down. And LG 2012 family design beats the Samsung’s thin bezels.

  • frans

    joe. its not that difficult for apple to make a huge profit when they consistently use child labour in asia. i for one, will never buy anything from apple

  • tonyjd40

    look, they are forcing a set price on us, the consumer. retail b&m stores lost big last year because their prices where high, however online etailers sold many tv’s, due to their lower prices. now samsung is making them all sell at the higher price, hence we the consumer get to pay more . samsung is in for a L O N G Y E A R with poor sales if this upp( unilateral pricing policy ) goes into effect. i will just buy a panasonic 65vt50 for about $200 less than the 64pne8000, wow when did anyone ever say pay less for a panasonic ??lol this is so crazy of samsung.

  • JB

    Ok guys, if u r looking for a new tv and want the new sharp elite let me know… I can sell it to u cheaper than n e body else in the world.

    Only let me know if ur serious, if u dont want the best go with something thats not ELITE

  • unami

    I’m confused/ignorant about one thing – the way tv’s are currently priced, are manufacturers guaranteed to get a certain amt?

    For instance, lets say best buy is selling a samsung tv for $2000, and amazon is selling it for $1800 – would samsung get paid a different amt from each seller?

  • SFDF

    Alrighty joe, i guess we’ll have to wait and see.

  • Anthony

    BAD MOVE SAMSUNG! I own the D8000 LED and Plasma and was thinking of moving those around my house and buying the 2012 8000 led and plasma but forget it if they do this. I am still a big fan but seriously if something isn’t done about your customer service reps fast then I am moving on Samsung cause I am ranking you guys to have the WORSE customer service people of 2011!! lets hope 2012 is better

  • joe

    REALLY! Samsung is not Apple is the reason that price fixing will not work, You obviously do not work in the industry, because if you did you would understand that people buy Samsung simply because it says Samsung. This will not only increase their profit, but will also increase their market share. They are not targeting the .0001% of the population that thinks they are a Guru they are targeting the entire planet for WORLD DOMINATION. I will also remind you that everyone said Apple will never be bigger than Microsoft either.

  • SFDF

    Joe, Samsung is not Apple. Not by the stretch of the most elastic imagination on earth.

  • joe

    Its funny I heard the same thing about apple products over the last couple of years, and yet they have grown to be the most profitable company on planet earth.

  • tonyjd40

    samsung was among the best tv”s and the d7000 was picked over the pana vt30 as the best tv last year. samsung also set the standard for col,or last year. ( standard—that by which all others are judges, the best ) anyway the pricing helped all this, if they raise the prices and no one can sell cheaper then i too will be going to panasonic. i bought the d8000 last year and WAS thinking about the e8000 this year, but not if they do this, hmm 65 vt 50 i guess then. so sad.

  • Bean Bandit

    What this will accomplish is more unsold Samsung tvs on the shelves at the end of the year.

    I agree with monte, if they do this then they’ve made my decision for me on buying a new hdtv this year and go with Panasonic. And that’s before I hear a professional review.

  • monte

    thank you Samsung for helping me make up my mind–Panasonic here i come !!!!

  • SFDF

    This isn’t going to work, unfortunately. Not in the states anyway. Here, virtually nobody knows anything about how HDTVs work, their quality, or their feature sets, and lower price is always king.

    I understand that they are trying to put a pricing floor under their HDTV business to keep it viable long term, but it’s not going to work. The race, in America, is always to the bottom, and the winner is always the one who gets to that finish line first.

  • The Dude

    Higher, fixed prices for products that have poor quality control and design flaws? All from a company with some of the worst customer service in the business? Sounds like a great idea Samsung, if you want to drive business away. I’m in the market for a new display this year. Looks like I won’t be purchasing a Samsung.

  • Neil

    Well Samsung became a big player because of their quality and innovation and decent pricing stealing people away from Vizio. If Samsungs pricing becomes an outlier for the industry or significant enough expect Vizio to be America’s #1 tv brand for 2012.

  • JB

    I think this is just right for a manufacturer to stand up against cheap ass americans. People need to buy into decent products and stop buying cheap sets. Now the problem with this pricing policy is that Samsung better create some well rounded devices in the longitivity department.

  • Tony

    Fail. Epic fail. Samsung sets were already among the worst performers on the market for anyone paying the least bit of attention. And now they won’t be price competitive either. Lulz.

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