A Matter of Numbers

For many years, there was a manager of export sales for a particular German model train company who was quite knowledgeable. He knew his markets and he knew what would sell and what would not. He also thoroughly knew the internal politics of his company and knew of the processes necessary for a new item to reach the markets.

He typically had two responses to any proposal of new items.  One response was “No, that is not possible."; he said that so much that many managers and train collectors referred to him as “Dr. No".  His other response to an interesting product suggestion was “It is just a matter of numbers"..  Which is to say that “If we can sell enough of them, then maybe we will do that item.”

Which reminds us that the model train business is a for-profit business, at least if you are planning to stay in business for any period of time. So, no matter how interesting a particular project might be to the model railroad company personnel, it had better be much more interesting to those who actually buy those trains.

One surefire way to perk up an otherwise boring model train sales meeting is to suggest to upper management that the starter sets should be given away for free. Starter sets are already heavily subsidized, which is to say that their components are always cheaper in the starter set than if they were bought separately. The idea is to get someone interested in a particular product line and then make up for any loss of margin with subsequent sales of additional items.  The give-it-away-for-free approach takes that idea to its ultimate, with the hope that mass distribution of the free sets will result in considerable downstream sales of track, extra cars, locomotives and such. Making such a statement is also a surefire way to make management suspicious of you as a model railroad company employee.

This does point out the dynamic between model railroad manufacturers and model railroad buyers. Those who make the model trains want to manufacture them as cheaply as possible, while those who buy those trains want to purchase them as cheaply as possible. A classic market paradigm.

It has been said that there is a cheap streak in the model railroad  hobby. We will leave discussion of that statement for another day, but there is plenty of anecdotal evidence to indicate that sometimes the model railroad manufacturers believe that if they offer a cheaper version of their products, they will be successful.  This is a tricky matter, for if a manufacturer develops a reputation for inferior quality, their entire product line becomes suspect and their business model falls into jeopardy.

One old line manufacturer of trains in 0-Gauge seems to succumb every few years, when what passes for market research tells them that if they can just produce a train set selling for under $100.00, they will enjoy greater market share. The resulting train set does indeed sell for $99.95, but they are not very pretty and those who have bought them often discover that the “quality” brand product which they now own does not work with any other products manufactured by the same company.  Of course, many of them don’t care and the $100.00 set gave them about that amount of play value, but the model railroad hobby suffers just a bit because those customers never really move on into the more interesting areas of the hobby.

There are plenty of examples of this thinking. The Märklin Primex line is such an example; older tooling offered at discount store prices, with the hope that the buyers would trade up to better quality.  Rokal offered some locomotives without headlights, at a lower price; an add-on kit was available to equip the engines with headlights at a later date.  Even Arnold rapido yielded to the siren call of the cheap streak, producing a series of cars identified as the “Junior Series”.  These three freight cars would be the start of a modest series of inexpensive cars; they were cast in plastic, but had no lettering or other decoration.  This group would later blossom to five or six freight cars and one passenger car. 

At least they were honest about things, describing these cars as for the beginner.  And they stayed in the product line at least until 1970.  This notion again reared its head in the 1980’s when Arnold began offering car kits as a “way to save money".. Presumably these cars sold well.

This is a two way street, for as the rapido line grew in size and quality, several otherwise outdated passenger cars from the 1960’s era product line were then marketed at a lower price and promoted as “reasonably priced for assembling long trains on main  lines”.  These cars had been built to shorter length than scale, and as they were replaced by more accurate cars, Arnold felt that they could continue to produce the older cars and sell them as a way to create impressive trains of many cars at a lower cost.

It was just a matter of numbers.

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