Part 1 – The Debate about Yamaha Pianos: Problem Statement
The Players – Yamaha
Yamaha of Japan and Yamaha Corporation of America (YCA) are two different companies. The latter imports new pianos from Yamaha of Japan and manages the sales and distribution dealer network in the United States. Resellers of pianos (piano dealers) enter into agreements with YCA which entitles them to offer select Yamaha products to the U.S. public. Yamaha dealers make a significant financial investment in their piano inventory. They also support their selling effort through advertising and community support which directly increases Yamaha’s goodwill and brand awareness in the marketplace. YCA offers resellers a degree of territorial exclusivity. A dealer is permitted to sell only within a designated market. In general, you will find only one Yamaha piano dealer in each statistically significant market area (SSMA).
The Importers – Syckes Piano Imports, Inc. et.al.
The most famous importer was Wilton H. Syckes of Syckes Piano Imports. Mr. Syckes recently passed away at age 91. His reputation in the industry is impeccable. I include several documents which he authored that isolate and clarify the primary criticisms of the YCA campaign against legally imported pre-owned pianos.
Importers of pre-owned Yamaha and Kawai pianos operate legally in the United States. They purchase pre-owned pianos from brokers in Japan and other countries. Yamahas are most frequently offered for sale, but many other name brands can also be acquired through brokers. Brokers locate and buy used pianos throughout the world and sell them to importers of various countries. Importers operate as distributors in their respective country and sell individual pianos to piano dealers.
The Dealers – Authorized and Non-authorized
Dealers who are not authorized Yamaha resellers are approached by distributors of used Yamaha pianos. Some resellers of new Yamaha pianos also offer used Yamahas for sale.
Within the market of pianos, where there are buyers of new pianos, you will also find consumers who consider buying a used piano of the same brand name. In any given market area it is unlikely that you would find a seller of every brand of used pianos. For instance, your market may have a Baldwin dealer, but it is highly unlikely that you will find a dealer that offers a broad selection of used Baldwin pianos. The same could be said for every other brand of piano except for Yamaha. Yamaha is unique for one reason: they have made and sold so many pianos worldwide that a significant inventory of used Yamahas exists. Kawai pianos run a close second. Yamaha enjoys market dominance, but part of that distinction means that there are a lot of used Yamaha pianos in the world market. Yamaha is so large they end up competing against their own product. Few manufacturers can make that claim. Only Yamaha disparages its own product as part of a marketing strategy intended to increase the competitive position of new Yamaha products.
What Do Brokers Do?
A broker of Yamaha pianos acquires used pianos from many sources throughout the world. Most often these pianos are acquired from private owners. Pianos are also acquired from academic institutions that periodically replace their stock of pianos with new pianos. Even with my exposure to industry veterans, it is difficult for me to grasp the sheer number of used Yamahas that are in the world market. It must suffice for the reader to accept that there is a ready and constant supply of used Yamahas available for purchase by interested piano dealers. By comparison, the availability of other well-known brand name pianos is scarce. The only exception being pianos made by Kawai of Japan. There is a steady availability of imported Kawai pianos too. As it will be shown later, Kawai does not make an effort to discount the quality of its used pianos the way that Yamaha has done. Only Yamaha disparages its own product.
The Balance between Manufacturing and Distribution
It seems important to encourage the reader to consider what the national dealer network looks like. You can easily imagine one Yamaha dealer in every major market area. Also consider that Yamaha of Japan seeks to achieve a manufacturing schedule which produces new pianos at a constant rate, such that employees can be retained. It is not advisable to lay off skilled labor during slow periods of production. Consider also that the life of a piano nears 75 years. The introduction of new pianos into the world market must not too greatly exceed demand. If it did, production would slow and factory workers would work in an unstable and insecure environment.
Likewise, every effort is made by Yamaha distributors in every country that offers new Yamaha pianos, to ensure that every exclusive dealer has a recommended floor inventory of Yamaha products. With this information, you can consider the pace at which new Yamaha pianos are produced. Production stability would occur when the supply of one new piano would be offset by demand for one piano by a dealer. There are hundreds, perhaps several thousand, Yamaha dealers in the world, each dealer selling one piano at a time and eventually reordering a piano to replace the one that was sold. It is this selling activity which keeps the production facility stable.
Yamaha is unique however. They produce so many pianos that an added factor is present in the marketplace. Yamaha has an obvious need to sell new pianos, but because of the long life of the piano, a significant inventory of used Yamahas is present in the open market. Pricing of pianos varies greatly from country to country such that a used Yamaha purchased in one country could be exported to the U.S. for a good profit. In fact, that is the case.
Yamaha enjoys high brand recognition with U.S. consumers. Yamaha is a desirable piano to purchase. Piano consumers who shop for new Yamahas will invariably consider the purchase of a cheaper used Yamaha. Fortunately, there is a ready supply. There are also smaller piano dealers, (all of whom are not authorized to sell new Yamaha pianos), who recognize that they can make a good profit selling used Yamaha pianos. Those dealers have ready access to used Yamaha pianos through distributors who import Yamaha, Kawai and other brands of used pianos from brokers overseas, who in turn have acquired inventories of used pianos from all over the world.
Reactions by Interested Parties
It is important to note that all of the aforementioned parties in this debate are for-profit entities. Each acts on a profit motive. Each seeks to protect and further its interests. The statements and rebuttals, respectively, seek to appeal to the judgment of the buying public and professionals within the industry. With no trier of fact to establish the validity of any party’s claims, the jury in this matter is the consumer.
Of secondary import is to recognize that professionals in the industry, who are not engaged in a direct for-profit activity, may still find it necessary to be informed about the facts in this debate. To a very uncertain degree, the reputations, credibility and integrity of tuner-technicians, music teachers, administrators, and other industry professionals, depend on achieving and maintaining a necessary degree of intimacy with controversies in their relevant field of expertise.
Last, it is no secret that the business community can be divided between men and women who, on the one hand, view service to the public as a means to a profitable end, and on the other hand, view for-profit enterprises as a means to serve the needs of the public. The emphasis, if it is not clearly stated, focuses on either making money for its own sake, or first most being a responsible steward of the public’s interests and well-being. Like the late Wilton H. Syckes, I belong to the latter group. My only wish and hope is that my reputation bears out my claim, as Wilton Syckes’ does for his own lifelong activities.
During my forty years in the industry, I have no evidence or reason to suspect that this debate has done any damage to any party involved, or that either party has gained as much as a Roosevelt dime for its participation. The jury, being the public, only pays attention to the debate prior to shopping, and that period of time on average is two weeks. Each consumer acts to further his or her self-interest and never acquires the political power to compel either party to surrender its case against the other.
As you might have already imagined, Yamaha dealers would prefer not to compete with dealers of used Yamahas within the same market area. Since a Yamaha dealer invests much capital in order to support and promote the Yamaha brand name, it can be very irritating to see a competitor capitalize on that investment simply because that dealer is offering used Yamahas.
As Yamaha achieved greater market share in the U.S., and with the advent of the import of pre-owned Yamahas beginning in 1984, authorized resellers of new Yamaha pianos would have increasingly made their objections known to Yamaha Corporation of America. They would have complained that sales of new Yamaha pianos were being too greatly affected by the increasing availability of imported used Yamahas. They also would have insisted that they could not reach their sales quotas imposed by Yamaha as long as there was a persistent competitor in the market capitalizing on the efforts of the authorized dealer.
The Marketing Strategy
The only marketing strategy that fits this situation – the one most likely to have been employed by Yamaha Corporation of America in a joint effort with Yamaha of Japan, was to create a perception of difference between new Yamaha pianos and imported used Yamahas. This strategy is called “product differentiation” in marketing circles. Simply put, it seeks to establish an easily perceived difference between two products in the eyes of potential consumers.
Also, the increase in supply of used Yamahas created an increase in need for serviceable parts for those pianos. Some of the models of pianos that were imported were never offered for sale in the U.S. The appearance of these pianos, and the increasing volume of used pianos, made it necessary for Yamaha Corporation of America to consider stocking parts for pianos they never sold! (Wilton Syckes argues convincingly to label this point as a ridiculous assertion.)
The influx of used imported Yamaha pianos disturbed the equilibrium from the factory to the sales floor. Dealers were upset. Used Yamahas threatened to alter supply and demand for new products in unpredictable ways. Something had to be done.
The First Shot Fired
As it appeared in Tech Gazette, a publication of Yamaha Corporation of America, copyrighted in 1989, and which was run as a paid advertisement in the Piano Technicians Journal in December of that year, Yamaha fired the first shot in an attempt to discount the value and legitimacy of legally imported used Yamaha pianos. In the next blog (Part 2), I will provide a photocopy and transcript of that advertisement for the reader’s critical review, followed by a transcription of the editorial reply published the following month in the same journal submitted by Wilton H. Syckes.
Part 6: FAQS about Previously Owned Yamaha and Kawai Pianos, by Wilton Syckes
Part 7: Seasoned for Destination, by Tom Donahue
Part 8: Gray Market Yamaha Pianos – What is the Truth? By Craig Whitaker