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Pentax USA President explains unilateral pricing (also used by Nikon USA and others)  
Friday, April 20, 2012 | by Eamon Hickey
In response to some complaints and confusion among Pentax users in the U.S., the President of Pentax Ricoh USA, Ned Bunnell, has posted an explanation of the reasoning behind the company's new "unilateral" pricing policy in the U.S., which forbids discounting by retailers. The post is interesting beyond Pentax: last year, Nikon Inc. (USA) also began a unilateral pricing policy and others, including reportedly Sony, have unilateral pricing policies in the U.S., as well.

These policies portend some major shifts in the camera retailing landscape in the U.S., and Bunnell's post is significant because he's the only camera company executive we're aware of to go on record about these changes. Although some aspects of Pentax's situation in the U.S. differ from those of, say, Nikon, Bunnell's comments are instructive about the basic business calculations behind these policies.

Pentax Ricoh USA recently implemented what Bunnell refers to as "unilateral pricing". Under this policy, U.S. retailers who sell Pentax cameras and lenses are forbidden from selling them for less than the Pentax recommended retail price. In practice, this means virtually all U.S. retailers will be selling Pentax products for the same price. 

Pentax is following the lead of Nikon USA and reportedly Sony (U.S.) in creating and implementing this kind of minimum resale price maintenance system. Since 1911, such pricing schemes were automatically ("per se") illegal in the U.S., but a U.S. Supreme Court decision in 2007 (Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U.S. 877 (2007)) overturned that precedent and opened the door to these new unilateral pricing structures. It appears that unilateral pricing may be evolving into the norm in the U.S. camera retailing industry.

In Bunnell's post he explains the goal of unilateral pricing: to make it worthwhile -- i.e. profitable -- for a wide range of retailers, including brick-and-mortar local camera stores, to carry the manufacturer's products since the stores will not have to fight deep discounting by a few powerful retailers, especially Internet-based stores. Bunnell also acknowledges that one practical implication of this policy is that, in the absence of retail discounting, customers may pay higher average prices for products that fall under the unilateral pricing umbrella. 

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