Konica Minolta's Pricing Trick

[In474]

At the Printing shop of Saigon Fahasa Co, Ltd (Saigonbook) - 474 Nguyen Thi Minh Khai Street, district 3, Ho Chi Minh City, Vietnam - are placed two Konica Minolta Bizhub Press C1100 that have a price difference of about $98,605 – an amazing amount for anybody who knows this story.

Saigonbook bought the first C1100 from Sao Nam Co., Ltd at a price of $158,558 and the second C1100 from STS Co., Ltd at a price of $59,953. The special thing is that both were distributed by the same distributor - Konica Minolta Business Solutions Viet Nam Co. (KMV); Sao Nam Co. and STS Co. are just commercial agents. In order to trick Saigonbook out of such a large amount of money, KMV used sophisticated tricks that were built into pricing and sales policy.

Firstly, KMV hasn’t made public its sales prices. On the website konicaminolta.com.vn, Konica Minolta products are all displayed without their sales prices. KMV is a company with 100% foreign-invested capital that has the right to make direct sales business in the Vietnamese market. However, they rarely sell products directly to customers. KMV appoints its commercial agents and sales collaborators to sell Konica Minolta products in Viet Nam, using a secret price policy. KMV’s commercial agents and salesmen look for easy prey, the target customers, to induce them to buy Konica Minolta products. When customers request price quotes for products, KMV and its commercial agents will carefully collect information about the customers and then charge them different prices based on their personal and financial information (such as their status, their income, their willingness to pay, etc.). At the same time, their quotations for the same product can have the price difference up to hundreds of thousands of dollars

Making a comparison of 8 quotations for the bizhub Press C1100 provided by KMV and their commercial agents (Sao Nam, STS and Sao Nam An), we were amazed by the difference in price as follows: KMV quoted a price of $153,488 and $102,325; Sao Nam quoted a price of $180,139 and $93,023; STS quoted a price of $79,069 and $83,720 and $ 88,372; Sao Nam An quoted a price of $180,140.

With all the evidence above, KMV and its commercial agents were clearly in breach of Article 6 and Article 12 of the Law on Prices by not publicly displaying the prices of their products and providing different quotations for the same product in order to cheat customers out of money.

KMV is a sales subsidiary of Konica Minolta Business Solutions Asia PTE Ltd, a regional head office of Konica Minolta, Inc., Japan. Therefore, KMV has lots of business experience as well as experienced lawyers that help it evade legal liability. In any case, Vietnamese businesses are always the ones who suffer financial loss that can lead them into debt. When a commercial dispute arises, Vietnamese companies are always engaged in a bitter struggle with each other over commercial contracts; while KMV transfers funds to the holding company and publicly announces that KMV has no contract dispute!

In trade, however, goodwill and honesty are moral principles that are respected and set out in Article 6 of Vietnam Civil Code. KMV is the principal that has rights and duties prescribed in Articles 172 and 173 of Vietnam Commercial Law. For this reason, KMV has responsibility for providing an answer to the public and the press about the price difference between the quotations provided by KMV and its commercial agents. (Note: $1 = VND 21.500).

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[gordo]

Are you certain that the prices for the c1100 are for the identical package? By that I mean are identical not just for the same piece of (new) hardware but also for software, RIP, service contract, warranty, click charges, consumables, etc.?

 

[In474]

I'm sure and identical

 

[gordo]

I'm sure and identical

If that's indeed true then perhaps what you originally wrote explains the price difference:

"When customers request price quotes for products, KMV and its commercial agents will carefully collect information about the customers"

Any prudent seller of any big ticket item would do the same.

"and then charge them different prices based on their personal and financial information"

Makes sense to me. If you are a high risk purchaser then it's a good idea to charge more (perhaps to discourage the purchaser if you are unable to decline the sale, or, so you don't lose as much if they buy and default).

"(such as their status, their income, their willingness to pay, etc.)."

If you were the vendor would you deal with a customer that is unwilling to pay, doesn't have a sufficient income for such a purpose, or is on the verge of bankruptcy the same as a customer who has a sound business, sufficient income and has a good track record of bill paying?

"At the same time, their quotations for the same product can have the price difference up to hundreds of thousands of dollars"

The difference may just reflect the difference in the vendor's comfort level with risk.

 

[MailGuru]

I'm not familiar with the laws of Vietnam, but, here in the states, in a free trade society, the price for a particular product or service is directly relative to the economic theory of supply and demand. The vendor (as well as we, in our own print businesses), should charge "whatever the market will bear". In that context, I see nothing unusual about selling two identical machines with identical software & RIP, for two totally different prices. Especially, when the transaction is taking place "3rd party" between the sales agent dealer and the customer. I would expect, under that scenario, that the manufaturer has set a minimum price to the sales agent companies, and, whatever they can get above that minimum price is free game.

In a free trade society, it is my responsibility as a "buyer" to shop that price around to several dealers to get my best deal. In a free trade society, it is also my responsibilty as a "seller" to charge as much as possible, without pricing it out of the prospect's price range and killing the whole deal. I don't see that as being illegal, unethical or immoral. It's just good business.

-MailGuru

 

[MailGuru]

Another reason for two identical machines and RIPs at vastly different prices, other than credit risk as mentioned by Gordo, would be what is going on internally, behind the scenes, at the manufacturer/sales level. For instance, here in the states, it's no secret that vendors will run special deals at the end of their fiscal year, to not only clear out inventory, but, to enhance their numbers for the year. Also, there are special incentives for trading in your old printer, or, even for displacing a competitor's printer for theirs. I just bought a second Xerox Versant 2100 for about $30,000 less than the first one bought a year earlier. They are identical machines with identical RIPs. How is that possible? Special year end incentives, second machine discount, we're also buying something else from them that is not a printer, etc., etc., etc.

Then, there's always the possibilty, that the person in charge of purchasing at one company, may be a far better negotiator, and, run a harder bargain, thean his/her couterpart at the other company.

At the end of the day (jeeze, I told myself last year that I would not use that phrase), if you feel that you have been gouged by a particular manufacturer or sales dealer, then, don't ever buy from them again. Surely, KM isn't the only digital printer vendor in Vietnam. Doesn't Cannon, Ricoh, Xerox, etc., also sell in that area?. When their numbers begin to drop due to their sales practices, they'll change the way they do business......... Supply & Demand (If there is no longer a "demand" for their equipment, because companies refuse to buy from them, they will be over-supplied, and, have no choice but to lower their prices, or, change their tactics)

-Best

MailGuru

 

[In474]

KONICA MINOLTA'S DISHONESTY

When shifting from “Specialized in book sales and book sales only to Digital printing”, Saigonbook has chosen to purchase Konica Minolta’s Digital Printers with a belief that a new machine of a well-known company will be ensured about quality and price.

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You can see more here >>> http:// innhanh474.com/tin-tuc/tin-moi-293/konica-minoltas-dishonesty-3638.htm

 

[Kiwiprint]

With around 34 different configurations of the bizhub PRESS C1100, taking into account numerous contract styles, and without understanding details around Trade-in equipment, deposits, cash contributions etc, it is too hard to comment on this either way without viewing the paperwork.

 

[In474]

​KONICA MINOLTA BEEING IN COURT
Konica Minolta Business Solutions Vietnam Co. Ltd (KMV) has been ordered to appeared in court by Viet Nam Ho Chi Minh City District 3 People's Court to participate in the proceedings as "people who has related rights and obligations" with commercial agents Sao Nam in cheated case of selling C1100 digital printers for Saigonbook.
for more information please read “KONICA MINOLTA'S DISHONESTY“ at the link: http: //innhanh474.com/tin-tuc/tin-moi-293/konica-minoltas-dishonesty-2-3639.htm?p=1