In Reply To:
Jordan,
I agree that Taiwanese products are not any worse than products produced elsewhere. It is just a fact that manufacturing of products are being globalized, and in my opinion it is more important that Hed (or Zipp) are strictly controlling the quality of the manufacturing overseas, than that they perform the manufacturing themselves. It also seems like Hed has done numerous changes to their hubs this last year, but I don't know enough about the changes that I can argue pros or cons here. However, it would be interesting to know if you agree that Zipp's marketing budget plays a major role in the price difference between the two products???
Ragnar
Here's what I will say about marketing. One is "in general" and the other two are as it applies to Zipp.
1) Zipp has a far, far larger engineering department than they do a marketing team. Do you have any real idea as to how much Zipp spends on marketing (including sponsorship, etc.) and how that number compares with what they spend on engineering? And, are you sure that in terms of percentages, that it is less than HED? I don't think you do. Rather you see bigger ads, more exposure under pro tour teams, etc. with Zipp than you do with HED. But Zipp also sells more wheels. And is a bigger company. Is Microsoft's advertising budget bigger than Apple's? Yes, but it's a bigger company.
2) As a rule, marketing should offer a RETURN on investment. I.e., marketing is what you use to sell things. Take Lew wheels. Lew wheels are really, really, really expensive. Same with Lightweight wheels. Let's imagine they invested in a well thought out marketing campaign that doubled their sales. Do you think that the cost of that marketing campaign will overrule the reduced cost that should accompany that sort of increase in volume. The more wheels you sell, the more carbon you can buy, the more raw materials you can buy, the more you recoup your investment in machinery, etc.
3) In Zipp's case, they've settled on a price point that it seems the market will bear. They could obviously make the wheels better, look at the ZedTech wheels with ceramic bearings, dimpled hubs, and impact-formed spoke holes (instead of drilled), but those wheels would be more expensive. So, Zipp could make the exact same wheels as they made in 2004, and use the marketing to sell those wheels, and drive the price down. So you could get a 2004-technology 404 today for a cheaper price or you could have an improved 404 at roughly the same price. Some companies (WalMart, for example) use growth to drive down prices while offering an equivalent product. Other companies roll that money back into development. "How many features can we cram into a wheel costing $X?" That is the question they are always asking. I know because I've been a part of those discussions. It's
not, "how much can we get for a wheel that has Y features?"
Let's take HED as a counter example. Look at the H3 Deep. That wheel would (or *should*) be lighter, stiffer, and and equivalently aerodynamic if, instead of sticking a Jet90 fairing onto a H3 (which already had a deep-section rim that you are covering over), you simply cut a new mold that had the 90mm rim profile instead of the ~50mm profile of the standard H3. However, the cost of doing that would be substantially higher than just bonding on a fairing. Personally, I'd rather have that wheel purpose built as a 90mm wheel, but I know that would cost more. HED probably also feels that they have a price point that they want to operate to, and a fairing on the H3 is an easier way to hit that target.
So no, I don't see marketing as the major driver here. Marketing allows Zipp to sell more product which allows them to develop better products. If you don't advertise, you don't sell. And if you don't sell, you can neither make better products or cheaper products.
As a final note to your "...(or Zipp)..." Zipp doesn't make anything overseas that they oversee. Everything is made in the US, except for things that they buy direct from suppliers - like bearings, which they get from Switzerland, or spokes, which they get from Sapim. The one exception to this is the Zipp Tangente tire, which is made for them by Vittoria on a dedicated mold for that they designed. This is also excluding soft goods like water bottles, transition bags, etc. I'm talking about core products here - wheels, aerobars, cranks, stems, etc.
"Non est ad astra mollis e terris via." - Seneca | rappstar.com | FB - Rappstar Racing | IG - @jordanrapp