Cabletron Systems' list prices for networking gear tend to give customers a bad case of sticker shock. So the vendor this week began publishing discounted product prices on its electronic-commerce site.
Industry analysts said the Rochester, New Hampshire, vendor's list prices are as much as 50 per cent higher than those of rivals, resulting in rankled users and lost business.
Cabletron has responded by posting the list price and a discounted price that users get when they make purchases via the company's World Wide Web site. The online discount can amount to thousands of dollars, depending on the product.
"We're making this move primarily to capture new business, as that's where the real challenge is," said Wade Appelman, senior director of product management and marketing. "Current customers can use the site, but the majority have already negotiated attractive discounts off our list pricing."
Cabletron receives 80 per cent of its revenue from repeat customers and wants to drive down that percentage by landing new accounts.
Citicorp's John Pfeffer predicted users will welcome the public listing of discounted prices. "This will show potential Cabletron customers that they can get a better price than list," said Pfeffer, senior LAN engineer at Citicorp in New York, which already has worked out a volume discount plan with the vendor.
"The discounted price may not be the best price they can get a product for, but it gets the customer interested and keeps Cabletron in the race," he said.
One analyst said the move will have marketing and cost benefits. "Cabletron's strategy here is to eliminate the perception that they are the high-price provider of networking products," said John Morency, vice president at Renaissance Worldwide, a consulting and research firm in Newton, Massachusetts.