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Details Emerge On Samsung UPP Guidelines

New York –

Samsung Electronics

provided TWICE with more details on its recently implemented Unilateral Pricing

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.