New Ownership for Martin Logan

[Len44]

Any thoughts regarding the recent change in ownership for Martin Logan?

Any hints regarding introduction of new speakers, including subwoofers?

Inquiring minds want to know!

 

[rpokuls]

Well, they are currently having a sale on the Masterpiece series. Does that mean they are clearing
the decks for a new line? idk

 

[Len44]

Sort of sounds like it. We shall see.

 

[twich54]

I think with COVID they are just trying to stay alive .........

 

[R.I.P]

Well, they are currently having a sale on the Masterpiece series. Does that mean they are clearing
the decks for a new line? idk

Sale or reduction in price is done to increase quantity of goods company wants to sell. With covid demand is low for ML products. In recent difficult financial situation to meet their budget target of quantity they want to sell they have to reduce price to make their products more affordable for larger number of people.

Take the following hypothesis. ML produces only one speaker for $100. At this price able to sell ten of them. Total sales now is $1000. Suppose due to covid falling demand able to sell only 8. Now revenue earned is $800. To remedy this fall in revenue. Company offers 10% rebate. Now price of speaker is 100 - 10 equals 90. At this lower price the speaker is now affordable to greater number of consumers. More people will buy speaker and company will be able to sell 12. Now total revenue earned is 90 x 12 equals $ 1080.

When company wants to increase total sales they use marketing strategy. They play with marketing mix or 4 P’s of marketing. Namely, product, price, promotion and place. Under product they have introduced new speakers and modified motion series. Under price they have reduced to stimulate falling demand. Under promotion they have advertised on their website the recent sales. Finally under place or location they have a vast dealership network and moved operations to comparatively low cost areas.

They will also continue with masterpiece line of loudspeakers until they have recovered their investment made to produce them and earn a healthy or target rate of return or profit.

 

[spkrdctr]

RAH, I'm with you on this. I'm waiting for the 75% off clearance sale. I can then load up with new stuff. I'm planning ahead!

 

[Robert D]

RAH, I'm with you on this. I'm waiting for the 75% off clearance sale. I can then load up with new stuff. I'm planning ahead!

If that happens I will load up for sure! Can you imagine how fast they would sell out. Let's hope it doesn't happen huh, because that would be a certain sign of death for the company. I wonder how much their masterpiece line is marked up beyond production cost. Anyone have an idea what the margin is these days for items in this category?

 

[Nuri58]

Sale or reduction in price is done to increase quantity of goods company wants to sell. With covid demand is low for ML products. In recent difficult financial situation to meet their budget target of quantity they want to sell they have to reduce price to make their products more affordable for larger number of people.

Take the following hypothesis. ML produces only one speaker for $100. At this price able to sell ten of them. Total sales now is $1000. Suppose due to covid falling demand able to sell only 8. Now revenue earned is $800. To remedy this fall in revenue. Company offers 10% rebate. Now price of speaker is 100 - 10 equals 90. At this lower price the speaker is now affordable to greater number of consumers. More people will buy speaker and company will be able to sell 12. Now total revenue earned is 90 x 12 equals $ 1080.

When company wants to increase total sales they use marketing strategy. They play with marketing mix or 4 P’s of marketing. Namely, product, price, promotion and place. Under product they have introduced new speakers and modified motion series. Under price they have reduced to stimulate falling demand. Under promotion they have advertised on their website the recent sales. Finally under place or location they have a vast dealership network and moved operations to comparatively low cost areas.

They will also continue with masterpiece line of loudspeakers until they have recovered their investment made to produce them and earn a healthy or target rate of return or profit.

So why not do that permanently if earnings go up? We'll there is the brand image and selling at low cost will make it say more common as a product even given the impression it may not be a top product. So a clearance sale once in a while to meet the forecast indeed.

 

[R.I.P]

RAH, I'm with you on this. I'm waiting for the 75% off clearance sale. I can then load up with new stuff. I'm planning ahead!

75% off clearance sale only if the company says goodbye to consumers.

You can buy used ML that have been used for a few years for 75% off retail price. Okay perhaps not 75% but still substantial discount on used items. I bought my CLS used for six years for 70% discount of list price. The CLS provided great music to me for more than 20 years.

 

[R.I.P]

So why not do that permanently if earnings go up? We'll there is the brand image and selling at low cost will make it say more common as a product even given the impression it may not be a top product. So a clearance sale once in a while to meet the forecast indeed.

Why should ML sell goods at discount and lose sales discount amount when under normal economic conditions without offering discount can turn inventory over target number of time during the financial year.

Only when sales are sluggish and there is backlog of unsold items if I am not mistaken the company reduces price to speed up sales so that sales quantity target is met. Advisable to sell at discount compared to not selling at all. On each discounted sale company earns contribution margin that goes towards covering fixed cost and then earning profit.

Company not able to sell beyond manufacturing plant capacity. So has fixed maximum number of goods it can sell in the short run or one budget period. Wishes to sell goods producing during year without discount in order to earn maximum contribution margin. However if unable to sell inventory excess due to recession offers a discount to manage inventory level properly.

 

[Robert D]

The time span of their recent sale must have been long enough to sell a lot of their inventory. It was a good sale for sure. I noticed that some speakers like center channel and sub woofers were not on sale. I was watching for the balanced force 210 to go on sale.

 

[Nuri58]

Why should ML sell goods at discount and lose sales discount amount when under normal economic conditions without offering discount can turn inventory over target number of time during the financial year.

Only when sales are sluggish and there is backlog of unsold items if I am not mistaken the company reduces price to speed up sales so that sales quantity target is met. Advisable to sell at discount compared to not selling at all. On each discounted sale company earns contribution margin that goes towards covering fixed cost and then earning profit.

Company not able to sell beyond manufacturing plant capacity. So has fixed maximum number of goods it can sell in the short run or one budget period. Wishes to sell goods producing during year without discount in order to earn maximum contribution margin. However if unable to sell inventory excess due to recession offers a discount to manage inventory level properly.

I guess that was my point

 

[rpokuls]

I saw that they recently (a couple of months ago?) raised the price of the Neolith to $100,000 from $80,000. Also CLX went from $25,000 to $30,000. The prices
of the rest stayed the same (except during the recent sale). What is the strategy there?

 

[Robert D]

I saw that they recently (a couple of months ago?) raised the price of the Neolith to $100,000 from $80,000. Also CLX went from $25,000 to $30,000. The prices
of the rest stayed the same (except during the recent sale). What is the strategy there?

Those must be selling well enough that they think they can raise the price. The market has got to be really small at that price! $100,000 is more than most spend on a new car. If i had the money to spend, I'd have a pair right now! Does anyone own a set of the Neolith, or heard them?

 

[dirmae]

Yes, I've heard the Neolith's in Belgium at a dealer's demo with Audio Research amplification. To me this was the best sound I ever heard.
https://www.alpha-audio.nl/achtergrond/verslag-cost-no-object-show-2016/
This review is in Dutch but google Translate can probably help but the pictures tell the story.

 

[Brad225]

I heard the Neoliths twice at a local audio show. They were poorly set up and sounded awful. I can't imaging anyone listening to them there and wanting to purchase a Martin Logan product. Everyone I spoke to, that heard them, felt the same way.
It was a true disservice to the brand.

 

[R.I.P]

I saw that they recently (a couple of months ago?) raised the price of the Neolith to $100,000 from $80,000. Also CLX went from $25,000 to $30,000. The prices
of the rest stayed the same (except during the recent sale). What is the strategy there?

Raising the price of Neolith by 25%, ML hopes there will be comparatively small percentage reduction in quantity demanded by consumers. Strategy has to do with price elasticity of demand for Neolith. If this is the case then demand for Neolith would be inelastic. Strategy always has to do with increasing long term profits and increasing short term profits without compromising long run profitability and viability of business.

 

[Robert D]

Raising the price of Neolithic by 25%. ML hopes there will be comparatively small percentage reduction in quantity demanded by consumers. Strategy has to do with price elasticity of demand for Neolith. If this is the case then demand for Neolith would be inelastic. Strategy always has to do with increasing long term profits and increasing short term profits without compromising long run profitability and viability of business.

Yeah, I think those able to afford $80,000 for a pair of speakers won't even hesitate to pay an extra $20,000 for the same speakers. For those folks money isn't an object.

I'm a bit surprised about the raise in price of 20% in the CLX. That may actually decrease the number of sales more than 20% and result in less profit. This may be a test run to see if they can raise the price on the rest of the masterpiece speakers.

 

[R.I.P]

Yeah, I think those able to afford $80,000 for a pair of speakers won't even hesitate to pay an extra $20,000 for the same speakers. For those folks money isn't an object.

I'm a bit surprised about the raise in price of 20% in the CLX. That may actually decrease the number of sales more than 20% and result in less profit. This may be a test run to see if they can raise the price on the rest of the masterpiece speakers.

The recent sale namely 20% off retail for masterpiece loudspeakers. Their price elasticity perhaps is greater than 1. In other words their demand is elastic. Some decrease in price results in larger qty demanded.

If this is true then Robert you are right in assuming 20% increase in price of CLX may actually decrease the number of sales more than 20% and result in less profit from CLX target or niche market.

The CLX is for a niche market that is different from niche market for ESL9 or 13A. What holds true for CLX market not necessary be the case for other ML products. Therefore I do not think is a test run to see if they can raise the price on the rest of the masterpiece series. The rest have elastic demand if they increase price sales will drop off sharply.

Remember that all these price decreases and increases are tweaks or ongoing adjustments that serve to maximize profit earned from target niche market segment and favorably exceed related budget targets.

 

[Robert D]

The recent sale namely 20% off retail for masterpiece loudspeakers. Their price elasticity perhaps is greater than 1. In other words their demand is elastic. Some decrease in price results in larger qty demanded.

If this is true then Robert you are right in assuming 20% increase in price of CLX may actually decrease the number of sales more than 20% and result in less profit from CLX target or niche market.

The CLX is for a niche market that is different from niche market for ESL9 or 13A. What holds true for CLX market not necessary be the case for other ML products. Therefore I do not think is a test run to raise the price on the rest of the masterpiece series. The rest have elastic demand if they increase price sales will drop off sharply.

Remember that all these price decreases and increases are tweaks or ongoing adjustments that serve to maximize profit earned from target niche market segment.

Yes, I agree. Only time will tell about the CLX. If we see the price on that come back down then we know that it didnt work out for them. The Neolith is definitely not very elastic compared to the others.