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highdesertmesa wrote:
We don't give it a second thought when someone buys a new A1, Z9 or GFX 100S at a similar price point – or when someone buys a $90K vehicle that will lose half its value over 5 years. $5.5K for a new film camera is nothing in this economy. I'm actually surprised they haven't raised the price of their film cameras to the price of the M11.
True.
Pricing must be viewed in the context of the overall financial position of a targeted customer base. In Leica's case Dr. Kaufman, Leica Chairman and majority owner, has said that Leica prices its cameras so that generally a body and lens will cost between 1.5 and 2 times the salary of a customer (he referenced the average full time salary of a German executive). He said that this is not new, it has been this way throughout Leica's history. That would be an interesting study to undertake. The median salary of a manager in Germany is currently Eu 6,590. Including tax the price of an M11 in Germany is EU 8,750 and the price of a 50mm Summicron is EU 2,500, for a total of EU11,250. That comes out to 1.70 times the salary. Right in the middle of Dr Kaufman's stated pricing model.
This is not a pricing model unique to Leica. Many Luxury items are priced this way. De Beers used this sort of model when setting the price of diamonds, and even featured it in its advertising. Here is more information on how that was deployed.
https://www.goodhousekeeping.com/life/money/a32609/two-months-salary-engagement-ring-rule-origin/
Leica is not a commodity item that is priced on cost to produce. It is a luxury brand item.
No, Leica is not over priced. In many ways it is not even a particularly relevant question to ask. Leica is priced and positioned so that it appeals to a certain segment of the market, society, and the economy that segment lives in.
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