Details Emerge On Samsung UPP Guidelines

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Samsung Electronics

provided TWICE with more details on its recently implemented Unilateral Pricing Policy.

The policy is designed to establish guidelines for minimum prices at which certain upscale products can be sold by authorized retail partners.

"Samsung continues to provide innovation and experiences to consumers that provide profitable opportunities for our channel partners," said Tim Baxter, Samsung Electronics president. "Our thrust as a company [in establishing a UPP] is about finding a way that we can continue to keep investing the R&D associated with bringing these new technology solutions alive and doing that in a way that delivers profitably to Samsung and in turn provides profitable opportunities for our channel partners."

Joe Stinziano, Samsung home entertainment marketing senior VP, told TWICE the new UPP applies to all ES6100 series LED/LCD TVs and up, all E550 plasma series TVs and up, ES6000  and E6500 Blu-ray players, E6500 and E6730W home theater systems, HW-E550/1 soundbars and DA-E750/1 and DA-E670 docks.

The program is in effect immediately for all indicated E series products as they hit retail shelves, he added.

 The new Samsung UPP differs from its more traditional minimum advertised pricing (MAP) program in that it sets guidelines for minimum selling prices rather than imposing suggested caps on the prices at which products can be advertised.

 "Dealers are free to sell products at whatever prices they choose to," Stinziano clarified, "but our unilateral policy says that if you sell below a certain price, there is a schedule of penalties that goes along with that."

This year, the new pricing policies are being used in place of channel distribution changes for specific model lines, opening more models up to authorized national distribution. By taking the selling focus off of price, Samsung executives said they hope retailers will have more time to better educate the customer to product features and benefits, providing compelling demonstrations and discussing the merits of purchasing through an authorized retailer that provides service and support.

This isn't the first time Samsung has instituted a UPP on specific upscale merchandise, but it is the broadest implementation to date.

The company first began the practice several years ago on some of the first LED/LCD TVs it introduced to the market, noted Dave Das, Samsung TV product marketing VP. He added that "for the past two years we have instituted a UPP on our Black Friday promotional models during Thanksgiving week."

Samsung has established a committee inside the company to deal with "inconsistencies" found in the marketplace, Stinziano said.

He added, "and we have other ways of monitoring as well. Let's leave it at that."

Asked why Samsung didn't establish a set UPP when the practice first began, Stinziano said that "as a brand we were in a different spot then than we are now. That was one specific technology and one specific series. We've got multiple series of products this time and have gone with a number of differentiating technologies in the marketplace."

Das said past UPP programs "were effective at achieving our goals at the time of preserving the brand image of that top tier product. But, this was the year that we felt it was critically important to implement this policy on a broader range of products to ensure that we as a company can continue to invest in cutting-edge technologies."

The policy has been widely praised by retailers and distributors contacted by TWICE.

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