The challenge for Dyson: maintaining unique image

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Pricing expert John Hogan thinks Gordon Thom, president of Dyson's U.S. division, needs to take a hard look at the joint venture between General Motors and Toyota, which manufactured Nova and Corolla cars in the same plant in Freeport, Calif., in the mid-'80s.

"They were virtually the same car ... but consumers were willing to pay $1,200 more for the Toyota," said Mr. Hogan, of the Strategic Pricing Group. "That's the real question for Dyson: Can they sustain the perception that they are unique?"

But as Dyson's distribution moves into mass channels (it's already stocked at big-box stores), it will lose more control over this important brand-building lever. After all, in high-volume channels, discounting drives volume.

But Dyson's Mr. Thom doesn't seem worried. "Pricing isn't a concern of ours. ... The cause of our success is that we've got the only vacuum cleaner with no loss of suction, not because we are selling a product that costs $400, $500 or $600."

Still, Mr. Hogan argues Dyson soon will be "between a rock and a hard place." He says Dyson may have tapped out the demographic willing to pay a premium. So if prices go south , Hogan said, there's little the brand can do legally but threaten to pull products from a retail channel.

"That's a powerful lever to enforce pricing discipline," he said.
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