Late last summer I strolled into the Maserati dealership on North Rush Street in Chicago where a fetching young woman guided me through the merchandise adorning the spotless floor. After a brief stop to ogle beautiful Ulysse Nardin watches, I got the lowdown on the new Quattroporte GTS, the Cambiocorsa, the Gran Turismo, and the brand new revitalized Ghibli. She also introduced me to a variety of other exotic cars available for sale: the Lamborghini Aventador and the Gallardo, the Aston Martin Vanquish, the Bentley Mulsanne, various Ferraris, a few McLarens. You know – the rides of the 1 percenters.
What struck me though was the Ghibli, the namesake of a sexy, rakish Maserati model introduced in 1966 that ran through production year 1973. (The name “Ghibli” refers to hot dust-bearing wind of the North African desert; Maserati also produced a car called the “Mistral” which refers to a strong, cold northwesterly wind that blows through the Rhône valley and southern France into the Mediterranean. Perhaps a “Santa Ana” vehicle is on the drawing board in Modena.)
The saleswoman explained that the Ghibli was set to retail for about $75K – a far cry from the flagship Quattroporte which goes for about $110K. She commented sotto voce that Maserati might be making a mistake by pricing a car that closely resembles the Quattroporte at three-fourths the price; a creature of commissions, the woman obviously feared that customers would opt for the less-expensive but pedigreed Ghibli, thus thumping her take-home pay.
I too wondered whether Maserati was making a strategic error. After all, Maserati has been forever a member of a category of cars considered “exotics:” limited in production; gorgeous of style; priced out of reach; endowed by a legacy of precision engineering and European racing credentials. The whole idea of Maserati (and Ferrari, Lamborghini, Aston Martin, Bugatti, McLaren) is exclusivity. Even more so than Mercedes, Porsche, Jaguar, Alfa Romeo and even Lotus. My concern: that Maserati may have made a blunder that could hurt its solid brand image – not unlike what Cadillac had done with the clunky Cimarron in the 1980s or Porsche with their Corvair-like 914. Believe me – the Ghibli is no Cimarron. . . but introducing a line within Maserati that costs just a tad more than a Jaguar F-Type or a Corvette sounds risky.
Basic management texts describe revenue as the product of P times Q – price of the item times the quantity of the item sold. Luxury companies like Maserati, Tiffany, Bergdorf-Goodman, Patek-Philippe, Christian Louboutin and Kiton rely on exclusivity – ie. big P small Q. Reversing the arrangement – bigger Q, smaller P – fundamentally reframes the company’s brand, oftentimes for the worse.
I saw a Ghibli this week parked in a municipal golf course lot alongside dented Hyundais and rusty Subarus. There was no “Dead Head” sticker on the bumper, but like the song says, “you can never look back.” If too many dentists and Chipotle franchisees start driving Maseratis, the jig is up.
Joe Nocera Sucks Bezos’s Kneecaps
New York Times op-ed contributor Joe Nocera made his bones reporting on financial markets, but lately he’s been on a crusade against the NCAA. Nocera calls out the NCAA for treating college football and basketball players – guys who help drive millions (billions?) of dollars of revenue for the colleges and the NCAA itself – as nothing more than amateur “student-athletes” who partake of sport as though it were a hobby to enjoy between Calculus and Kierkegaard. I’m with Nocera on his assessment of the NCAA as a cretinous bunch of hacks enabling the exploitation of young people, most of whom will not enjoy a lucrative professional sports career awaiting them, nor a college degree either. You see, once the “student-athletes” are deemed insufficiently talented to propel the university to TV-revenue glory, they’re cut from the roster and set adrift, incapable of completing the curriculum.
So passionate is Joe Nocera about the evils of the NCAA, that the scribe penned a piece that opened as follows: “Twice a year in Vienna, the members of the Organization of Petroleum Exporting Countries gather to decide on the short-term direction of oil prices. Sometimes, O.P.E.C. agrees to cut back on oil production, pushing up the price of oil. Other times, it decides to boost production. Always, the goal is to fix the price of oil, rather than allow it to be set by the competitive marketplace. Indeed, collusion and price-fixing are the main reasons cartels exist — and why they are illegal in America. Yet, in Indianapolis a few weeks from now, a home-grown cartel will hold its annual meeting, where it, too, will be working to collude and fix prices. This cartel is the National Collegiate Athletic Association.”
This cartel is the NCAA – sayeth Joe the Nocera.
So imagine my surprise upon reading Joe’s column today in the New York Times titled sarcastically, “Amazon’s ‘Bullying’ Tactics.” Nocera defends Amazon’s tactics which include such peevish behavior as purposely delaying shipment of books by certain publishers, denying buyers the opportunity to pre-order books, and taking down “buy” buttons on selected books. Normally such impudence would be met with a rush of buyers to alternative outlets – but as we all know, that is problematic because Amazon has gobbled up much of the e-book marketplace and now acts like the monopsony that it is. They use their bigness to unlawfully lower the prices of what it buys – a violation of the antitrust laws. Kinda like a cartel, right Joe? Joe’s response (not to me, but in his piece): “No matter what you think of Amazon’s tactics, they surely don’t violate any laws.”
Coincidentally (or not) another Op-Ed piece on the subject appears right next to Nocera’s paean to Jeff Bezos’s Amazonian behemoth: How Book Publishers Can Beat Amazon by Bob Kohn who takes a contrarian view to Nocera’s. In Kohn’s view, Amazon is using monopsony power to fuck up those publishers and authors who won’t bow to its tyranny – and I’m on Kohn’s side.
Books by rabidly anti-NCAA/pro-Amazon Nocera are published by Penguin – and so help Joe if Penguin doesn’t toe the line with Bezo the Clown. He may have to turn his NYT column into a book promotion advertorial.