And yet the Chinese can copy & make their own Rolex and Breitling watches that are very hard to tell the difference.
And 3D printer print "everything" with small toleranses 😉
I would suggest that it is proof that this is false in that Purifi has not lowered price slightly and tripled sales. Or do you not think Purifi wants to maximize profits? Maybe the owners of Purifi are so rich that they don't want to make more money and prefer to keep the price high so that us peasant-speaker- builders don't get to experience too much of such a low distortion driver? But I wouldn't put my money on that argument.
Morel? Peerless
(or vice versa)
The 4 seconds between 3:13 and 3:17 might have been worth an > 1'000'000 $ investment by swatch group. In the poorhouse of speaker drivers advertising/influencing might work the same at a lower price tag.
What makes a speaker driver expensive? Engineering, materials, production methods, volumes, market laws ... ... ... last not least don't forget successful suggestion and influencing.
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Perhaps they haven't enough money to industrialize their products and they outsource them in small quantities and stock them for a long time ?
If you want to create a "hype" around a produkt, you can´t go the "cheep-way", and owners of Purifi are rich enough.
Apple and Steve Jobs is a good example,
Peter Lyngdorf:
https://pitchbook.com/profiles/investor/154073-71#overview
Bruno Putzeys
https://en.wikipedia.org/wiki/Bruno_Putzeys
Lars Risbo
https://ieeexplore.ieee.org/author/37285166400
https://patents.justia.com/inventor/lars-risbo
And out of curiosity what do you think the up front costs for a scanner that can translate directly to CAD and a decent CNC? You can do anything issue is it's not cost free and reverse engineering like that is flat out theft. Would you knowingly purchase one?
For what it's worth we used 3D printing for mock-ups and they could not reliably hold certain tolerances in the drawings. You could use it but it would require secondary machining very similar to castings.
Rob 🙂
Until you dismantle it.
Anyone heard about a fake Morel, ScanSpeak, Purify, Peerless ... ? And how would a fake driver measure / "sound" then, vs. the original?
Think copy-specialists-pro only look for products that "everyone" buys. (not 0,1 promille things)
I have heard of fake Be drivers where they analyzed the material and it wasn't Be or was a composite claimed as Be.
Rob 🙂
Like any field of manufacturing.
Staff, taxes, r&d, operational costs, supply chain depth, bom, materials, sales volume, QA, warranty, servicing, marketing, route to market, taxes and profit margin.
Staff, taxes, r&d, operational costs, supply chain depth, bom, materials, sales volume, QA, warranty, servicing, marketing, route to market, taxes and profit margin.
that's actually an interesting case:
my brother worked as a jeweller and also sold quite expensive watches (not rolex),
he told me (don't nail me down to this) that half the total turnover of rolex is goint into advertising.
so if you buy a rolex, you actually buy a good watch but mostly you buy a "feeling" and the possibility to represent wealth.
That ratio doesn't pass the smell test from my experience or anything I've learned. Again, I'm not an expert, and your brother may really know. However, generally, luxury brands spend between 5% and 10% of revenue on advertising and marketing. It's reported that some push 20%. Numbers seem scarce. Since Rolex is privately held ... most numbers are not public and conjecture seems to be based more upon myth than facts or industry knowledge.
However, let's try to make an EWAG.
In 2023 Rolex's advertising expenditure was purportedly under 100 Million USD. Source - MediaRadar. It was purportedly over 50 Million USD. Source Zippia (whoever they are). Ad spend is more easily tracked, but it doesn't cover all marketing. I know you specifically said "advertising", but let's try to include all marketing to see if it gets closer.
In 2023 Rolex's annual revenue was roughly 10.1 Billion Swiss Francs => 11.2 Billion USD. Multiple sources.
Even if we quintuple (which would be pretty crazy, but why not) the high end of Rolex's purported ad spend (print and other media) to include all marketing / endorsements etc. etc. to $500 Million USD... that would fall well, well short of a (50%) $5.5 Billion dollar marketing budget.
Rolex's marketing spend might even be below the typical 5-10% of revenue mentioned earlier.
If numbers are off... I'd welcome further information with actual sources. I took all of a minute to check some things.
To add perspective - LVMH purportedly spent $10 billion or so on total marketing globally in 2023, and they're pushing north of $93 billion in revenue.
A company with which I have direct knowledge has revenues north of $700 billon and the marketing spend is typically ~$2 billion. Clearly not a luxury market.
It was reported that GMs total 2023 marketing budget was $3.6 Billion ~2.3% of total sales.
https://stockdividendscreener.com/auto-manufacturers/marketing-advertising-and-promotional-expenses-of-car-companies/#:~:text=General Motors And Ford Motor,-GM-and-Ford&text=For example, GM's marketing and,respectively, in fiscal year 2022.
Now... if your brother said that 50% of the money from a Rolex watch purchase went to charity... that might have some credence, but ... who really knows? I don't...
However, let's try to make an EWAG.
In 2023 Rolex's advertising expenditure was purportedly under 100 Million USD. Source - MediaRadar. It was purportedly over 50 Million USD. Source Zippia (whoever they are). Ad spend is more easily tracked, but it doesn't cover all marketing. I know you specifically said "advertising", but let's try to include all marketing to see if it gets closer.
In 2023 Rolex's annual revenue was roughly 10.1 Billion Swiss Francs => 11.2 Billion USD. Multiple sources.
Even if we quintuple (which would be pretty crazy, but why not) the high end of Rolex's purported ad spend (print and other media) to include all marketing / endorsements etc. etc. to $500 Million USD... that would fall well, well short of a (50%) $5.5 Billion dollar marketing budget.
Rolex's marketing spend might even be below the typical 5-10% of revenue mentioned earlier.
If numbers are off... I'd welcome further information with actual sources. I took all of a minute to check some things.
To add perspective - LVMH purportedly spent $10 billion or so on total marketing globally in 2023, and they're pushing north of $93 billion in revenue.
A company with which I have direct knowledge has revenues north of $700 billon and the marketing spend is typically ~$2 billion. Clearly not a luxury market.
It was reported that GMs total 2023 marketing budget was $3.6 Billion ~2.3% of total sales.
https://stockdividendscreener.com/auto-manufacturers/marketing-advertising-and-promotional-expenses-of-car-companies/#:~:text=General Motors And Ford Motor,-GM-and-Ford&text=For example, GM's marketing and,respectively, in fiscal year 2022.
Now... if your brother said that 50% of the money from a Rolex watch purchase went to charity... that might have some credence, but ... who really knows? I don't...
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Any modern tweeter is basically just a copy of the old Seas/Dynaudio tweeters.
So not fake in a direct way.
Although I have seen some fake products here and there.
Main difference, is that the majority of loudspeaker stuff is not linked to a social status show off symbol.
In other words, owning a Purifi driver doesn't make you the cool kid on the block, a Rolex does (for some people)
I have seen much higher numbers.
Especially in the modern way of doing business, this seems to be the norm.
Just advertise and market the living hell out of the competition.
Go in debt for the first couple of years and than jump back up.
Very risky.
^ Not at all surprising. Thank you for the additional information. In the few minutes I searched, I could not find any examples higher than 20% for larger companies. I found 'loose' accounts, that I'd never cite.
When companies are smaller (and 'younger') as you note, they may spend disproportionate amounts on marketing while they establish themselves and enter markets / try to gain market share. Makes perfect sense.
I should have been more clear that the context of the discussion was centered around established / 'larger' market cap companies like Rolex.
Cheers!
When companies are smaller (and 'younger') as you note, they may spend disproportionate amounts on marketing while they establish themselves and enter markets / try to gain market share. Makes perfect sense.
I should have been more clear that the context of the discussion was centered around established / 'larger' market cap companies like Rolex.
Cheers!
Although I don't know or have the numbers, but for me personally Beats by Dr Dre headphones always comes to mind.
I could be totally wrong on that, but they very obviously flooded the market heavily.
The first models weren't great at all, the newer ones are okay.
They also sell bluetooth devices these days I think.
It's obviously designed and manufactured by a 3rd party company.
Sonos is another example of this.
A good example for bigger companies are like Amazon, or Just Eat Takeaway etc.
Although Amazon has been around in the US much longer, on this side of the pond it's something from the last 8-10 years or so.
They use extremely aggressive pricing incl free shipping to basically run out the competition with very heavy losses.
There are plenty of articles and literature written on this.
The last couple of years prices seem to be crawl up again.
Keep in mind that 10-15 years is rather young for any kind of business.
I heard rumors that Bowers & Wilkins spent around 30-35% many years ago and for a few years you saw the rounded high-finish speakers in every newspaper & even large posters.
I don't know if it's true, but advertising was a really big thing!
What happens if the competition advertises the living hell out of the original company?
Do you think Coca Cola or Pepsi is able to sell at a higher price or make higher profit margins because of their advertising expenditures? They are in a prisoners dilemma...they would love to collude and not spend so much on advertising, but they would each have the individual incentive to break the deal. (Thus, one of the reasons collusion is illegal.)
Here are the top global advertisers in 2021.
P&G and Nestle are the world's largest Consumer Packaged Goods companies. Some of P&Gs top products are below. Each of these has strong competition which leads to P&G often being though of as a huge advertising company. While Purifi actually has some new technologies and offers real product differentiation, there is no substantial difference between Pampers diapers, Dawn dish detergent, Tide laundry detergent, Crest toothpaste, Charmin toilet paper, etc. (Okay, Charmin toilet paper really is the best and I'm willing to pay more for it, but not the rest.)
The same thing applies to Coca Cola and Pepsi.
Advertising as a share of global revenue:
Proctor and Gamble 10.7%
Nestle 2.7%
Coca Cola 6%
Pepsi 2.4%
Apple 0.7%
General Motors 1.7%