Highland 35; Range & design dictated by buyers???

RG
Rod Gibbons
Sun, May 15, 2005 7:06 PM

Rod Gibbons wrote:

If you're considering the price/size of something like the PDQ 34, then
another intriguing model may (???) be Fountaine Pajot's latest, the
Highland 35. I say "may" because the first one debuts shortly.
(DISCLOSURE:  Fountaine Pajot is one of the brands my company reps.)
It's purported to be more of a bluewater cruiser than the PDQ34; sort of
a 10%-smaller version of FP's well-proven Maryland 37 (also offered by
Moorings powerboat charter division under the name "Nautec Blue 37.")

The new Highland 35 certainly looks very Euro:

http://www.fountaine-pajot.com/rubrique174-en.html

but with only 211 gallons of fuel, it won't be much of a long-range cruiser.

Your observation about the cruising range of this cat is spot on. Not
surprisingly, additional tankage is available as an "option."

But that got me to ruminating in general about the thinking that goes on
when tankage/engine size -- and a whole host of other
standard-vs.-optional" equipment list is  first contemplated by the
builder before introducing a new model.

For boats in general, how they are equipped is a matter of overall
"pricing strategy."  The intriguing question:  Is that driven by the
manufacturer, or by the boat buyer?

During my 27 years as a boat dealer I've frequently mused about that.
When it comes to pricing, just whose "fault" is it:  builder or buyer?
While I can think of numerous exceptions, I'm inclined to believe the
buyer exerts the most influence. Yet it's often NOT directed in a manner
that benefits the buyers. Let me explain why I suspect that's true.

Let's say that the boat buyer has the choice between two 35'
power-cruising cats, each of which is similar to the other (in terms of
length, roominess, layout, engine size, performance, etc.) BUT, boat "A"
is a fairly bare-bones "basic" model (often termed "sail-away"
equipped), priced at $250,000, AND requires an additional $60,000 of
equipment in order to be truly "turn-key-ready" (that is, it's
"cruise-away" equipped -- needing only the addition of food & fuel in
order to be taken off for a fortnight of safe and enjoyable cruising).

Meanwhile, the  manufacturer of the other power-cruising cat (boat "B"),
knowing what is needed for his model to be "turn-key-ready," includes
the aforementioned $60K worth of added equipment as standard. However,
by making it standard in boat "B", that manufacturer reaps the benefit
of volume buying, standardized installation, and so on, and is able to
sell that boat for $300K.

In short, the buyer has the choice between highly similar boats, both
ready for cruising, but one costing $310K, the other $300K.

Buess which one doesn't just outsell....but SUBSTANTIALLY outsells the
other? The needlessly more expensive $310K model is easily the sales
champion.

Now, because of how I've presented this scenario, I'm guessing that most
of you will agree that model "B" is the better deal. And yet, I've told
you that in my experience as a dealer, it's the $310K model that is the
much bigger seller. Why so?

(1)  There will be some buyers who have entered the looking-for-a-boat
process with the determined notion that they will not spend more than
$250,000. So right away, they give little thought to the competing $300K
boat. Although (thanks to the computer), I keep track of a lot of
statistical abstracts about buyers and their often NON-price-driven
choices, I don't have statistics for this phenomenon. However, my
educated guess is that between that "seeming" $50,000 "savings" between
the sail-away $250K cat and the "cruise-away" equipped $300K model --
perhaps as many as many as 25% of the buyers are almost immovably drawn
toward the lower price. These include those who say: "I'm NEVER going to
add fully $60K in equipment and upgrades to the boat." And there are
those who say: "I don't need anywhere near to that $60K list of
equipment and upgrades."  However, once they're "emotionally involved"
in the purchase of boat "A", a HUGE portion of those buyers undergo a
big change. Suddenly, usually with surprising enthusiasm, they become
aware that they, in fact, DO want all of those things in that $60K list.
IN fact, they often move into a mode in which they believe they NEED
that equipment in order to successfully cruise their new boat. And so
they end up ordering that $60K worth of equipment and upgrades. What
does that mean to our discussion here? Those buyers have, in effect,
lost the pricing advantage that manufacturer "B" provides. Worse yet,
the addition/installation of that equipment will, overall, neither be as
easy to affect nor (sometimes) as efficiently installed as if that buyer
had simply ordered boat "B."

(2)  Very quickly, then, the manufacturer of boat "B" discovers -- as so
often happens in life -- "no good deed goes unpunished." His sales
suffer thanks to his offering a better deal.

(3)  Because boat "B" doesn't land as many buyers, there is less
incentive for the dealer to sell that boat. Why? Dealers usually get a
supplementary bonus from a manufacturer at the end of a year's time IF
they surpass a certain pre-agreed-upon volume of sales. So, if the
public doesn't readily discern the advantage of buying boat "B", the
dealer has little incentive NOT to "push" boat "A", for that model's
enhanced sales will earn the dealer a bigger bonus at year's end.

(4)  If the dealer also does his own installation of optional equipment,
he earns more in the markup of those items than when the same optional
items are included in the sale of the boat (as in the case of boat "B").
So, that's further incentive for the dealer to promote model "A" over "B".

And so on and so on.

Now, back to the specific topic -- tankage (and its related sister, "range")

Either a power boat has transoceanic range or it doesn't. If it doesn't,
then whether it offers 1,000 or 1,200 or 1,500 mile range seems pretty
much a moot point. In fact, you'll find that many manufacturers consider
400 mile-range as standard for many non-ocean-crossing power boats....at
least for the US east coast. And I believe such thinking has some sense
to it. A boat with 400 mile range will take care of you for most
cruising of the US east coast and the Caribbean. That's not to say that
having twice that range isn't more convenient...but every gallon of fuel
weighs (what, about 7.5 lbs?), so if you choose to carry an extra
quarter-ton of fuel, then that means either a bigger boat to carry it
(which means lowered mileage), OR more of the load-carrying capability
of the boat is devoted to fuel stowage instead of larger cabins, or
instead of the ability to carry more persons and/or personal gear, etc.
And at what cost? Simply so you make one fuel stop every 800 miles
instead of a fuel stop every 400 miles?

Here along the Pacific coast, 400-mile range isn't quite adequate. (For
example, I believe that cruising south from San Diego to Cabo San Lucas,
one needs about 500 or 550 range to reach the fuel stop in Turtle Bay,
Mexico. And certainly, cruising north toward Alaska, a 500-or 600-mile
range is preferable to 400.) So, because of this -- and my longer ramble
further above -- most manufacturers offer larger tankage as an option
except for boats whose primary claim is "long-range capability."

With apologies, "Mr. Verbose" (grin)

Rod Gibbons
Cruising Cats USA

It will be interesting to hear impressions of the Highland as Rod and
others get a chance to inspect and/or sea-trial the boat.

--Georgs

Rod Gibbons wrote: >>If you're considering the price/size of something like the PDQ 34, then >>another intriguing model may (???) be Fountaine Pajot's latest, the >>Highland 35. I say "may" because the first one debuts shortly. >>(DISCLOSURE: Fountaine Pajot is one of the brands my company reps.) >>It's purported to be more of a bluewater cruiser than the PDQ34; sort of >>a 10%-smaller version of FP's well-proven Maryland 37 (also offered by >>Moorings powerboat charter division under the name "Nautec Blue 37.") >> >> > >The new Highland 35 certainly looks very Euro: > > http://www.fountaine-pajot.com/rubrique174-en.html > >but with only 211 gallons of fuel, it won't be much of a long-range cruiser. > Your observation about the cruising range of this cat is spot on. Not surprisingly, additional tankage is available as an "option." But that got me to ruminating in general about the thinking that goes on when tankage/engine size -- and a whole host of other standard-vs.-optional" equipment list is first contemplated by the builder before introducing a new model. For boats in general, how they are equipped is a matter of overall "pricing strategy." The intriguing question: Is that driven by the manufacturer, or by the boat buyer? During my 27 years as a boat dealer I've frequently mused about that. When it comes to pricing, just whose "fault" is it: builder or buyer? While I can think of numerous exceptions, I'm inclined to believe the buyer exerts the most influence. Yet it's often NOT directed in a manner that benefits the buyers. Let me explain why I suspect that's true. Let's say that the boat buyer has the choice between two 35' power-cruising cats, each of which is similar to the other (in terms of length, roominess, layout, engine size, performance, etc.) BUT, boat "A" is a fairly bare-bones "basic" model (often termed "sail-away" equipped), priced at $250,000, AND requires an additional $60,000 of equipment in order to be truly "turn-key-ready" (that is, it's "cruise-away" equipped -- needing only the addition of food & fuel in order to be taken off for a fortnight of safe and enjoyable cruising). Meanwhile, the manufacturer of the other power-cruising cat (boat "B"), knowing what is needed for his model to be "turn-key-ready," includes the aforementioned $60K worth of added equipment as standard. However, by making it standard in boat "B", that manufacturer reaps the benefit of volume buying, standardized installation, and so on, and is able to sell that boat for $300K. In short, the buyer has the choice between highly similar boats, both ready for cruising, but one costing $310K, the other $300K. Buess which one doesn't just outsell....but SUBSTANTIALLY outsells the other? The needlessly more expensive $310K model is easily the sales champion. Now, because of how I've presented this scenario, I'm guessing that most of you will agree that model "B" is the better deal. And yet, I've told you that in my experience as a dealer, it's the $310K model that is the much bigger seller. Why so? (1) There will be some buyers who have entered the looking-for-a-boat process with the determined notion that they will not spend more than $250,000. So right away, they give little thought to the competing $300K boat. Although (thanks to the computer), I keep track of a lot of statistical abstracts about buyers and their often NON-price-driven choices, I don't have statistics for this phenomenon. However, my educated guess is that between that "seeming" $50,000 "savings" between the sail-away $250K cat and the "cruise-away" equipped $300K model -- perhaps as many as many as 25% of the buyers are almost immovably drawn toward the lower price. These include those who say: "I'm NEVER going to add fully $60K in equipment and upgrades to the boat." And there are those who say: "I don't need anywhere near to that $60K list of equipment and upgrades." However, once they're "emotionally involved" in the purchase of boat "A", a HUGE portion of those buyers undergo a big change. Suddenly, usually with surprising enthusiasm, they become aware that they, in fact, DO want all of those things in that $60K list. IN fact, they often move into a mode in which they believe they NEED that equipment in order to successfully cruise their new boat. And so they end up ordering that $60K worth of equipment and upgrades. What does that mean to our discussion here? Those buyers have, in effect, lost the pricing advantage that manufacturer "B" provides. Worse yet, the addition/installation of that equipment will, overall, neither be as easy to affect nor (sometimes) as efficiently installed as if that buyer had simply ordered boat "B." (2) Very quickly, then, the manufacturer of boat "B" discovers -- as so often happens in life -- "no good deed goes unpunished." His sales suffer thanks to his offering a better deal. (3) Because boat "B" doesn't land as many buyers, there is less incentive for the dealer to sell that boat. Why? Dealers usually get a supplementary bonus from a manufacturer at the end of a year's time IF they surpass a certain pre-agreed-upon volume of sales. So, if the public doesn't readily discern the advantage of buying boat "B", the dealer has little incentive NOT to "push" boat "A", for that model's enhanced sales will earn the dealer a bigger bonus at year's end. (4) If the dealer also does his own installation of optional equipment, he earns more in the markup of those items than when the same optional items are included in the sale of the boat (as in the case of boat "B"). So, that's further incentive for the dealer to promote model "A" over "B". And so on and so on. Now, back to the specific topic -- tankage (and its related sister, "range") Either a power boat has transoceanic range or it doesn't. If it doesn't, then whether it offers 1,000 or 1,200 or 1,500 mile range seems pretty much a moot point. In fact, you'll find that many manufacturers consider 400 mile-range as standard for many non-ocean-crossing power boats....at least for the US east coast. And I believe such thinking has some sense to it. A boat with 400 mile range will take care of you for most cruising of the US east coast and the Caribbean. That's not to say that having twice that range isn't more convenient...but every gallon of fuel weighs (what, about 7.5 lbs?), so if you choose to carry an extra quarter-ton of fuel, then that means either a bigger boat to carry it (which means lowered mileage), OR more of the load-carrying capability of the boat is devoted to fuel stowage instead of larger cabins, or instead of the ability to carry more persons and/or personal gear, etc. And at what cost? Simply so you make one fuel stop every 800 miles instead of a fuel stop every 400 miles? Here along the Pacific coast, 400-mile range isn't quite adequate. (For example, I believe that cruising south from San Diego to Cabo San Lucas, one needs about 500 or 550 range to reach the fuel stop in Turtle Bay, Mexico. And certainly, cruising north toward Alaska, a 500-or 600-mile range is preferable to 400.) So, because of this -- and my longer ramble further above -- most manufacturers offer larger tankage as an option except for boats whose primary claim is "long-range capability." With apologies, "Mr. Verbose" (grin) Rod Gibbons Cruising Cats USA >It will be interesting to hear impressions of the Highland as Rod and >others get a chance to inspect and/or sea-trial the boat. > >--Georgs > >