Thread: Festool Market Strategy

I seem to recollect a vendor telling me that it had already been ticked off by the ACCC. If correct it certainly doesn't give me any confidence in the ACCC if they fall for such spurious arguments

Just look at the banking royal comm for an assessment of the ACCC

You have to understand that Festool's primary market is industry, mainly automotive and what they get from retail to the hobby person is cream and I doubt very much if they are concerned at what the hobbyist thinks.

Originally Posted by TermiMonster

Just look at the banking royal comm for an assessment of the ACCC

Correct. The ACCC is a neutered, clawless, toothless, fat tiger.

It has no function any longer; moral, legal and correctly pointed out, ethical.

In any other age, they'd be invited to collectively commit seppuku.

Originally Posted by TermiMonster

Just look at the banking royal comm for an assessment of the ACCC

are you possibly confusing organisations?
I don't recall ACCC being savaged by the Royal Commission, ASIC yes, APRA somewhat, but ACCC? I don't recall them getting a mention.

Originally Posted by Huon pine fan

I seem to recollect a vendor telling me that it had already been ticked off by the ACCC. If correct it certainly doesn't give me any confidence in the ACCC if they fall for such spurious arguments

perhaps a bit severe?

have you been following the stories about the major uptick in silicosis among workers in the artificial stone industry?
ludicrous dust masks, cheapest available tools -- both indicative of shopping at a discount retailer.
Festools' core argument is that their retailers need the margins to support the knowledge base required to guide a customer to the appropriate tool for the task.

Must admit that the Festool retailer I patronised when in Sydney was pretty good in terms of the non-Festool options.

What aspect of their marketing is the issue?

Originally Posted by ian

perhaps a bit severe?

have you been following the stories about the major uptick in silicosis among workers in the artificial stone industry?
ludicrous dust masks, cheapest available tools -- both indicative of shopping at a discount retailer.
Festools' core argument is that their retailers need the margins to support the knowledge base required to guide a customer to the appropriate tool for the task.

Must admit that the Festool retailer I patronised when in Sydney was pretty good in terms of the non-Festool options.

Ian, whilst I am not aware of the case you mention I have seen reports of many cases that have really impressed me to the point where one thinks thank you. When I compare such cases with Festool's argument I just find it astounding that it's accepted. Surely the retailer best understands his own costs/investment in meeting Festool marketing requirements and thus in a position to decide if it makes commercial sense to discount from list price rather than have Festool punish him.

Originally Posted by Beardy

What aspect of their marketing is the issue?

The marketing strategy of the Festool importer/distributor is to avoid any and all discounts on their products, and they have an exemption from the ACCC to back this up.

Effectively other manufacturers allow discounting by the retailer, but the importer/distributor of Festool does not.

In some regards, it is similar to what ASKO and Miele do.

Originally Posted by cava

Whilst not wishing to stir the pot regarding Festools market strategy, I am left wondering it it has been successful or otherwise for the importer/distributor.

Following on from that, is it likely that the ACCC will continue the pricing policy when it is due for reassessment in December 2018? Any idea?

from the ACCC web site

RPM on Festool and Fein power tools allowed to continue

The ACCC has decided not to take further action at this time in respect of the resale price maintenance (RPM) notification lodged by Tooltechnic Systems (Aust) Pty Ltd (Tooltechnic) on 12 February 2018.

The notification gives Tooltechnic legal protection to impose a minimum price for the retail sale of its Festool and Fein power tools.

The ACCC can revoke a notification if it is satisfied that the likely benefit to the public from the notified conduct will not outweigh the likely public detriment from the conduct. The ACCC’s assessment of the notified Festool and Fein conduct has been informed by observing the practical effect of the introduction of identical RPM conduct by Tooltechnic on Festool products in Australia over the past three years under an existing authorisation.

In particular, evidence including feedback from dealers suggests that setting a guaranteed minimum price for these products has given a large network of Festool/Fein dealers the certainty they need to invest in facilities and staff to provide better levels of pre- and post-sales retail services. This results in consumers being able to make more informed decisions about the purchase and maintenance of these relatively complex products. The ACCC considers that this is also likely to result in increased service-based competition between Festool/Fein power tool dealers (particularly enabling smaller dealers to better compete with larger dealers) and promote competition between power tool brands.

While there is clear public detriment in this case because the discounts that would otherwise be offered to some customers will no longer be available, the extent of the detriment is likely to be reduced by the fact that Festool and Fein have relatively low market shares and face numerous competitors.

Further information about the notification, including a copy of the ACCC’s Statement of Reasons, is available on the resale price maintenance notifications register. This is the first RPM notification received by the ACCC since amendments to the legislation commenced in 2017. It should not be assumed that because the ACCC has allowed this notification to stand, the ACCC will not object to future notifications for RPM.

Published date:
25 July 2018


Can I suggest that if you are not happy with this decision by the ACCC, you should write to them outlining why their decision is wrong.

I can't see what the big deal is to tell the truth, I know that goes against the sentiment of every one of these threads but why shouldn't a manufacturer have the option of setting a retail price of they want to. If the marketing policy does not jibe with how you want to buy tools simply don't buy them. I don't consider buying their tools for the simple reason they are too expensive here in Oz and every other market says the same so it is not unique to Oz. The retailers know the rules before they take the brand on so they are fully on board with the pricing policy though some might pretend otherwise. What makes anyone posting here think that the tools would be any cheaper if there was freedom for the retailers to set their own retail price. If I was a retailer I would love the way Festool have managed to avoid discounting at the retail level because there is no significant advantage no matter where you spend your money.

Full disclosure, I have one of their drills which I bought because there was no other equivalent many years ago and two Protool drills when they discounted them something like $600 each when they closed the brand so I reckoned at $250 each they were worth a punt. I can't think of a single tool that Festool makes FOR THE HOBBYIST that is even worth considering because very few of them do anything more than any other brand when it is all said and done. Having said that their counter sinks are the duck's pyjamas and worth every bit of the $90 or so that they cost. I think a lot of people who express their displeasure in these threads would hope the price would fall enough so they could afford them but that would never happen because the prices would have to fall 50% in some cases or even more before I would even consider looking at them.

Originally Posted by cava

The marketing strategy of the Festool importer/distributor is to avoid any and all discounts on their products, and they have an exemption from the ACCC to back this up.

Effectively other manufacturers allow discounting by the retailer, but the importer/distributor of Festool does not.

In some regards, it is similar to what ASKO and Miele do.

ok, I was wondering if there was something else besides that
To my way of thinking there is nothing wrong with it and would go even further to say it would be wrong to stop them
At the end of the day it is a private business and they can put whatever price they want on their products and the market will respond accordingly if they don’t like it
Likewise nobody makes the retailers sell their products, they choose to agree to sell under pre agreed terms

As you have pointed out there are lots of premium products that operate under these terms including Miele, Porsche and there are numerous hi end building products, jewellery, fashion accessory companies that do the same
Price is only one aspect of a purchase and at the hi end is not of concern
With my Scottish heritage I would love to buy Festool products cheaper but accept their pricing structure

I think what Festool has tapped into islike "The Emporers New Clothes". By that I mean that the "one-upmanship" is alive and well when it comes to a couple of blokes arguing the toss that Festool being dearer means that they are the BEST on the market.

It took me a long time after the wide spread use of battery powered tools came that I actually bought a couple of drills. They were Ryobis and they were "affordable". They did a reasonable job and lasted quite a while when I was in kitchens. About 2 years ago I bought the lime green Ryobi drill and was pleasantly surprised to find that they were so much better than the blue ones. OK I am not doing the work I used to (constantly) but when I need to use them they get a work out and they perform well.
Would Festool be a huge amount better than the Ryobis? I don't think so. For me the Ryobis suit me just fine. I am not some one who has to have "branded" tools to skite about to the next bloke.
It all comes down to personal choice. There will be some reading this and complain that their experience with Ryobi stuff was hopeless etc etc. So be it. None of us are tortured to buy a particular brand it is simply personal choice.

Originally Posted by chambezio

I think what Festool has tapped into islike "The Emporers New Clothes". By that I mean that the "one-upmanship" is alive and well when it comes to a couple of blokes arguing the toss that Festool being dearer means that they are the BEST on the market.

It took me a long time after the wide spread use of battery powered tools came that I actually bought a couple of drills. They were Ryobis and they were "affordable". They did a reasonable job and lasted quite a while when I was in kitchens. About 2 years ago I bought the lime green Ryobi drill and was pleasantly surprised to find that they were so much better than the blue ones. OK I am not doing the work I used to (constantly) but when I need to use them they get a work out and they perform well.
Would Festool be a huge amount better than the Ryobis? I don't think so. For me the Ryobis suit me just fine. I am not some one who has to have "branded" tools to skite about to the next bloke.
It all comes down to personal choice. There will be some reading this and complain that their experience with Ryobi stuff was hopeless etc etc. So be it. None of us are tortured to buy a particular brand it is simply personal choice.

I thought the same with my Makita battery gear until I borrowed some festool drivers and they definitely feel a nicer quality product to use. A bit like driving a Jap. car and then driving a German one..... it just isn’t the same but still gets the job done