Tuesday, November 28, 2006


Suppose there are two stores in a shopping centre selling the same kind of stuff. The first store, lets call it Store A, has a large inventory of items from an official distribution channel where as Store B, is smaller in size and has a lesser amount of items for sale and that they are obtained via parallel import.

Both stores carry items that are highly desirable in the same niche market but pricing wise, Store A commands higher prices as its goods come via official channels and it tends to carry a lot more "official" products. Store A also provides official support and warranty for items bought from the store.

The owner of Store B tends to offer discounts and is more than willing to take orders due to the smaller inventory size, but not before a customer passes through his initial sour-faced test. Also available at Store B are a variety of third-party products which can be as good or offer more versatile functionality compared to their "official" counterparts.

If a consumer were to purchase an item that is available in both stores, what would be the deciding factor in which the consumer will go for a particular store?

Case in point, Midvalley Megamall has the Nintendo counter (Store A, if this were to match the scenario above) and at the same time a small video games shop (Store B) tucked in the corner of the IT centre.

In my opinion, there is no point supporting an official distributor if the price is for a particular game is significantly higher than that of what is offered at a parallel import shop (or website for that matter). Price will always be a major point of contention and having said that, I most probably go to the Nintendo counter to check out game demos, but for purchases, I'll take my chances with the sour owner of the little shop tucked in the I.T centre.