Lionel Quality Electric Trains

Letter from Jerry Calabrese on VISION Line Pricing


04/28/2009

Dear Friends of Lionel:

 

Every time I go to York I’m reminded of how valuable it is to spend time with fans and dealers; and how accessible everyone is to the free flow of ideas and information. This past show, Lionel spent a lot of time talking about and demonstrating our new Vision Line, and it was exciting to see reactions and hear comments, first hand. In the two and half days in which we held 10, full capacity demonstrations, we spoke directly with just over 1,200 people. 

 

In the months before York, Lionel held an unprecedented series of 18 Vision demonstrations, similar to the York events, all across the nation, in which we had the opportunity to speak directly with over 2,000 more of our dealers and fans. As one of the architects of the Vision Line initiative, it was great to hear what people liked about the program, and hard as it is to hear criticism, it was equally great to hear what they did not.  Happily, almost all of the comments we got about the new Vision Line features were positive and enthusiastic. 

 

Unhappily, I heard a lot of people say that our pricing structure, especially the part about the direct rebate program -- $100 for each of the two, initial diesels (the UP Genset Switcher and the GE’s Evolution Hybrid); and $200 for each of the initial, two steam engines (the Pennsylvania CC2s, and the Santa Fe 2-10-10-2) -- was too complicated. 

 

The rebate idea was mine, and the intention was to create more interaction and communication between Lionel and its customers. We also wanted to take the burden of any rebate paperwork off the shoulders of our dealers. After almost 30, face-to-face meetings, in which we had the unprecedented ability to demonstrate our product and get first hand input from our core audience, it seems pretty clear that I was wrong about the rebate structure. 

 

Of all the input we’ve gotten, most of our dealers and customers told us that they would prefer that Lionel cancel its rebate program and just lower the retail price of our Vision Line engines by an equal amount: $100 for each of the two diesels, and $200 for each of the steam engines. So, that’s what we are going to do.  This is not a price reduction, but it does remove a step we were asking Vision Line buyers to take, in order to get the rebates.

 

This means that the new suggested retail prices for our Vision Line engines are:

 

Pennsylvania CC2s (6-11154) was $1,999.99 with a $200 mail-in rebate, and is now $1,799.99, with no mail-in rebate.

 

Santa Fe 2-10-10-2 (6-11155) was $2,499.99 with a $200 mail-in rebate, and is now $2,299.99, with no mail-in rebate.

 

Union Pacific Genset Switcher (6-28314) was $799.99 with a $100 mail-in rebate, and is now $699.99, with no mail-in rebate.

 

GE’s Evolution® Hybrid (6-28306) was $999.99 with a $100 mail-in rebate, and is now $899.99, with no mail-in rebate.

 

We will still maintain the Lionel direct rebate for an additional $300 dollars to anyone who buys both of our new steam engines; as well as the additional $50 to anyone who buys both of our new diesels. All of the other benefits remain the same: 

 

  • Two year service warranty, rather than our traditional one year term
  • Enhanced service
  • Vision Club membership and all the benefits that go with it
  • Hospitality facilities at York and other selected shows

Thanks for all the comments and suggestions during our road show and at York, and thanks especially for the warm and enthusiastic reception you’ve given the Vision Line. 

 

Best, 

Jerry Calabrese

Phone 586-949-4100 Fax 586-949-1013 WWW.LIONEL.COM