Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP
Posting-Version: version B 2.10.2 9/5/84; site randvax.UUCP
Path: utzoo!watmath!clyde!cbosgd!ukma!psuvm.bitnet!psuvax1!burdvax!sdcrdcf!randvax!jhenry
From: jhenry@randvax.UUCP (Jim Henry)
Newsgroups: net.micro.atari
Subject: Re: ATARI product service and telephone numbers
Message-ID: <2890@randvax.UUCP>
Date: Mon, 20-Jan-86 17:19:14 EST
Article-I.D.: randvax.2890
Posted: Mon Jan 20 17:19:14 1986
Date-Received: Thu, 23-Jan-86 09:29:48 EST
References: <8601190136.AA14524@ucbvax.berkeley.edu>
Reply-To: jhenry@rand-unix.UUCP (Jim Henry)
Organization: Rand Corp., Santa Monica
Lines: 36


I think the experiences described in trying to return a slightly defective
machine to a computer specialty store is another reason why selling the
520ST through mass merchandisers makes sense.  As was very stated in an
earlier posting, specialty stores work on low volume, high priced, high
margin sales.  The 520ST is just barely expensive enough to support the
specialty store.  The stores I have seen a 520ST in looked like they would
have trouble getting an IBM franchise so they were probably scraping by
with what they could get.  Having to accept a return would probably be
a serious hardship for a specialty store.

The mass merchandisers work on high volume, low to moderate priced, very
low margin sales.  They offer little to no in-store selling.  If a product
like the 520ST can "sell itself" it is a very welcome item for the mass
merchandiser.  The mass merchandiser can offer one thing that would flatten
a specialty store and which is of very great value -- very liberal return
policies.  The one I am especially fond of is Target's "if you aren't
happy, we'll give you your money back" policy but it isn't that much
different from others.  (I just returned a VCR that had problems with
playing LP tapes 2 1/2 months after I bought it.  No hassle -- "sorry
about the problem".  I would faint if a specialty store did that.)

In all fairness we should examine what the specialty stores have done for
Atari.  While I'm sure some of them have been selling their hearts out,
I'm sure that a lot haven't.  Beyond that, no matter how hard they try
they don't have the resources to handle the type of sales volume that
the 520ST needs given the way it is positioned in the market.  It is
clear that Atari had to use the specialty stores to get the ball rolling.
I think keeping the 520ST out of K-Mart until after Christmas and giving
them the 1040ST is a pretty fair shake.  Anyone who was surprised by the
520ST going mass market just isn't awake enough to be in business, especially
the computer business.

Disclaimer:  All the above opinions are mine alone as should be obvious
             to all who are following the outcries about the Atari
             marketing strategies.