A general Carrera discussion

QUOTE (Mr Material UK @ 27 Apr 2004, 10:35)The one that interests me the most is Japan. I feel if the Japanese get hooked on slots, then it wouldn't be long before we started to see some really good, competitively priced products!

Tamiya, Tamiya, Tamiya, Tamiya
Fujimi, Fujimi, Fujimi, Fujimi
I can imagine some really nice slotcars in 1/32 scale... or why not in 1/24 for those of us (like me) who pervertedly prefer the larger Carrera track...


But seriously - I really appreciate the information coming from Thomas regarding Carrera - It is not easy to get much information regarding Carrera generally speaking and especially not in the UK.

Thanks Thomas.

//peter

ok I do not really think that this is a bad thread. But the thread should maybe have been divided into two threads. Only one of which would remain in the 'news' section (e.g. related information to the thread title). The other part of the thread I see as still valid and rather interesting but surely more suitable in a different part of this forum. Maybe with a more suitable name as well - something like the 'carrera market in the uk' - or similar.

When it comes to the Carrera market in the UK, and how, why things may have happened and possible consequenses thereof. Many aspects are to be considered.

1) Since it can be said that the existing Carrera 'market' in the UK is rather small and the representation of the Carrera brand is quite limited it is not obvious that any damage is done by 'dumping' the prices of a few slotcar sets. The reason is that there is a phenomena which is called 'market penetration'. This has to do with that it is not exactly unusual that 'dumping' or 'subsidizing' or even 'giving away' products is a VERY GOOD strategy LONGTERM for a company. Basically what this is about is related to CREATION of a brand recognition and even a creation of a market. An oversimplified example is the following. If there is a certain number of families that have (no matter how or for how much) got themselves a Carrera set - some of them are likely to be interested in additional track, additional cars etc. So the more Carrera sets there are available in peoples home the more likely it is that some one will be interested in buying accesories and cars made by carrera from a retailer. This phenomena ofcourse makes a big hole in the theory that retailers would suffer longterm. It suggests rather the opposite - if carrera products are breaking through into the UK market - it creates a market for future carrera products. Recognition of brand is furthermore to be added to this - e.g. people that have not ever heard of carrera products are more likely to come across people that have carrera products. There is not reason to believe that the experience of carrera existing carrera sets and the quality of track and vehicles etc will be devastating to the carrera brand. Quite the contrary is reasonable to believe.

2) It is not especially probable that Carrera as a company has anything to do with Argos 'dumping' of carrera products. It is much more probable that it is a pure business transaction. We can probably assume that the Carrera sets did not sell very well and this resulted in that Argos needed to take action to get rid of them. As we can see there are no further Carrera sets in the new catalogue - reason is probable that it is only worth having something in the catalogue if you believe that there is a market for the product... So it seems as if Argos was left with quite a few sets in their warehouses and even though they lowered the prices for christmas they still did not get rid of them. So what to do - after all a product that gathers dust on the shelves in a company warehouse like Argos is definitively a COST. So after a while the space will be assessed as being more valuable than the product. Might just as well give them away...

just some thoughts.

//peter

EDIT
Sensible advice on splitting, Peter and we acted on it after seeing how it ran.

Unfortunately Carrera hardly has one UK division. And even more unfortunately the UK distributor (NIKKO) even though seemingly competent as distributor for RC products - does consistently give a rather bad impression when it comes to Carrera products. Carrera seems to be a necessary evil for those guys - total lack of interest and if it does not hit them over their heads (a couple of times at least) they will not even notice... Never mind service, ability or knowledge...

Why would I say this - because I cannot accept that I within a couple of minutes can find out more relevant information about Carrera products etc than their own UK distributor. Also they have several times 'forgotten' to fulfill my orders... And to say 'oops we forgot' after being reminded more than a couple of times within six months or so is not really an excuse - after all they do not seem to forget to order the RC stuff. I believe that they would rather ignore Carrera if they could but they lack courage - and their mother company might have a contract to fulfill ofcourse. In any case not exactly an exercise in good business practice. Carrera should take full responsibility for their UK distribution themselves. Nikko UK does them no service what so ever - I believe that more than one of the UK retailers are rather tired of Nikko UK practice of sporadic Carrera distribution 'strategy' and practice.

So if Carrera gets fed up with Nikko UK and would want to set up a UK division count me in
//peter

just a few comments.

Market penetration:
I was not suggesting that Carrera or Argos knowingly were making an effort to develop the size of the Carrera market or the brand awareness in the UK. I was trying to explain that such activities wether planned or accidental may give results that are positive. The point with my description was that these kind of activities are not obvioiusly BAD for any of the stakeholders concerned. I did not mean that it was an action taken based upon some kind of master minded plan. It could have been - but it is hardly the case here.

But whatever the result there is not reason to believe that it will be a bad thing for anyone involved. Not for Carrera - since their products are rather good and therefore any customer will be pleasantly surprised for what they get for their money.

Not for Argos - since they regularly need products that they can show a good price on - the image of price cutting company is rather important - ofcourse it is good if the product is not all that popular - they do presumably make more money on other and more higher margined products... But it looks good if you can show a number of products for apparently half price (or less) in your advertisement. It is a question of image - we are not talking of the Carrera sets here as an isolated thing - the sets are just a small part of Argos marketing activities and could have been most anything (e.g. unrelated to carrera).

Not for customers - I do not think that anyone who bought these sets will think they got 'ripped of'. On the contrary I think the experience on the whole is a good one.

Not even bad for retailers - on the back of all these Argos sets one could imagine that retailers would feel a loss in market. This is a question which in a very short-sighted response would be answered with a yes. But the point is that in a longer term - this is exactly where 'market-penetration' comes into place. Many of the customers would most probably never have bought a Carrera set if it was not such a great offer. No loss in customers for those Carrera sets that otherwise would not have been bought. So in a sense you now have to see if there are people who wanted to buy Carrera sets and this Argos offer came in between so instead of getting their set from a retailer they bought it from Argos. To be honest though I cannot see that the number of these kind of customers would be very relevant. What I do see however is that there seems to be a noticable number of people buying Carrera sets from Argos - people who would not otherwise buy a Carrera set at all. So what is in it for the retailer? Well there are more people now who have a Carrera set than before - most likely at least some of them enjoyed something from their new sets. Some of those might be interested in getting some other Carrera product now (e.g. cars, track, accesories etc).

And finally because there are more Carrera branded products around this does mean that more people than before recognize the name - and might not always confuse all and everything slotcar - with 'scalextric'...

Size:
Yes it is larger - but if space really was the major point we would all be racing 1/64 scale in the UK... What is more relevant to compare is the experience - e.g. What is the point of talking about size of track when you see some 1/64 scale tracks being 35 meter long? Compared to a 10 meter Scalextric circuit or a 7 meter Carrera? What I mean is that the size discussion to me at least seems to be an 'after-the fact' discussion. In my reality at least people make the track they can fit in according to their own preferences (and if they can afford it). This will hardly be dependent on 'size of track' as a first instance - but certainly be dependent on 'what do I like to drive on' and 'what can I do with it considering the space I have'. So space is relevant but emotionally influenced choice and preferences are - I think - more relevant... After all the slotcar thing is not about 'having the largest circuit around' - but it is in my world at least about - having a nice circuit that is fun to drive. So even though UK circuits might then on average be slightly smaller (have not seen proof of this though) it is not a big enough problem - if it was we would not be racing 1/32 scale in the first place...


//peter

I fully agree with you Swiss - there is much to be said about competent behaviour of certain distributors in the UK. I have several examples about how Nikko in the UK have failed and I have not been impressed - on the contrary. I would be more forgiving if there was demonstrated effort made - but what I have seen so far has been rather feeble. When it comes to business - there is much to say about competencies - but in many aspects will has to be demonstrated in practice and this is related to showing interest. In many cases this is down to more than 'having' to show interest or 'feel obliged' to do certain things. And Nikko UK has in my mind at least failed to do Carrera much good. The thing with dropping the 1/24 range is a wonderful example of how to create a bad experience for your customers. The reason is that the response they gave just after christmas was that they were going to continue with the 1/24 scale range. So when some customers were ordering the 2004 range they were re-assured, until now suddenly - they are not. It is not usually seen as a trustbuilding strategy if a distributor on a launch of a new range states one thing and then AFTER they reassured their customers that they would deliver - the change their minds. Has anyone heard of 'long-term' plans? Or are we talking about 'this weeks whimp'? I have had to do with both bigger and smaller distributors that have been able to sort much more complicated business tasks than this. So size has nothing to do with these particular problems. Interest in combination with competence has though.

//peter

@ thomas.
It may be a good idea to direct your quick judgemental comment towards Nikko UK since the information regarding them not intending to distribute 1/24 scale Carrera cars in the UK this year originates from people working at Nikko themselves. So while you might be correct in describing what Nikko at the end of the day may or may not be doing - the information that I built my comments upon is coming from the source. I am sure that there are several retailers that would be able to give a similar respons regarding this matter. There were conflicting information regarding this since several sources gave a negative response about the future of 1/24 cars in the UK while as far as I know only ONE salesperson (related to Nikko UK) stated that he would do his best to try to sort this out (no promises though) even though this did not seem to be supported otherwise...

So ok I should be careful with what I say in public - but I am not worried in this particular instance since I have hands on experience of Nikko activities during the last few years. Mostly due to a number of different 'happenings' or 'mistakes' over and over again by some less than enthusiastic members of the Nikko UK community...

I would like to make it very clear that the main reason for me to post in this subject in the first place is because I actually like many of the Carrera products and I think it is a shame that they are not dealt with in a more professional and consistent manor. So I am not interested in censoring myself in this matter - my comments are built on my personal experiences and you might disagree - that however will not make them less relevant (or real) for me. The issues with the 1/24 scale cars is only one of several - but it is only used here as an example and this was not meant as a history of Nikko UK behaviour the last few years. As you may have noticed - I am NOT talking about Carrera or even about every one working at Nikko - there is at least one person working at Nikko with a professional attitude and effort - unfortunately there is more than one person working there...

hope this clarifies some - it was not intended as an attack at Carrera or at Carrera products.
//peter

latest update regarding availability of 1/24 scale Carrera products in the UK (according to Nikko UK):

1) all carrera 1/24 scale products have been cleared and are not expected to be in stock.
2) only new cars that are expected are the new Jaguar and the new Ferrari - but this is only expected as a 'one of' batch in 2004.
3) it is not believed that any other carrera 1/24 scale product will be available in the UK this year.

So if Thomas or anyone else has any influence on this or any other information contrary to the above statements I would be extremely pleased. Because I - and others I know - would certainly be a very happy puppy indeed if I could look forward to get other 1/24 scale Carrera products in the UK. I know I can always order it from Germany (have done so before) I find it noticably more convenient and the delivery is cheaper if I get it from a UK dealer... since I live in the UK that is.

//peter

any news yet about Carrera products and distribution in the UK?

So far the information available to me is the following:

1) Nikko is the distributor for UK.
2) From the 1/24 scale product line only the 'new' for 2004 Jaguar and the Ferraris will be available.
3) There is currently no possibility to order any 1/24 scale sets what so ever.
4) There is currently no possibility to order any other 1/24 scale cars from the 2004 catalogue - not even the for 2004 new Porsche Carrera 6.
5) No information given from Nikko UK about if any 1/24 scale ltd editions can be ordered either.

Does anyone have information to the contrary of what is described in the points above? Or additional information?

//peter