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Opus X MSRP ruminations

IMO, it makes sense that the Opus X line is a loss leader, especially if there are production issues (like mentioned above), why else would Fuente make this line, that has people going crazy, “limited”.

Why not make it a regular production ultra premium, raise MSRP, take the money and run. Doing this would take the “grey” market out of the picture. But, in the process, you sacrifice all your merchandising and residual sales from the “limited” status and you possibly lose sales on your other ultra premium cigars (the Opus X line would be competing with your other ultra premiums). On the other hand, option B, you leave it the way it is, take your loss, and let the “grey” market reap all the rewards. So, it basically comes down to which scenario will make Fuente the most money, which, I’m guessing, is option B. If that’s so then Fuente is making the best out of it. Hyping it, merchandising it, making it scarce, and controlling what they can (the authorized dealers).

The online issue, I believe, plays into the whole “limited” allure (something so limited you can’t get it online…you can get anything online). I agree with Andrew that it also forces people into B&M’s. If that is Fuente’s bread and butter then what better place for people. But, you still can’t make them buy other Fuente’s, maybe their thinking is if they were going to buy an Opus X in the first place then they will probably settle for another Fuente.

My question is did Fuente intentionally make it that way from the beginning or did it just sort of work its way into that position?

I guess it doesn’t matter, your still stuck with the same options, still I wonder?

Just my thoughts, I know I can’t get enough of them. :love:

Thanks for the discuss Andrew.
 
dav1041 said:
My question is did Fuente intentionally make it that way from the beginning or did it just sort of work its way into that position?
Click to expand...

If I had to guess, it would be that it wasn't necessarily planned to be a loss leader from the start... but there was such an incredible demand for the cigars even before they were released that it allowed them to explore their options.
 
moki said:
Here's another angle on the Opus X cigar as a loss leader concept. Look at this thread, for example. Just the fact that it exists means the cigars are being talked about. Let's say Fuente doesn't make money on Opus, as has been put forth... this is about the cheapest and most effective advertising you could possibly buy, both for Fuente and for the rest of their product line.

As has been noted before, many industries do things like this. Why did Dodge make the Viper? I'm sure they make money on the car, but it wasn't made as a profit center, it was made to bolster the image of the company.

Whether you like Opus X cigars or not, or whether you like the "hype" surrounding them is irrelevant. What is germane is that you're talking about 'em. :)
Click to expand...

Great points all. This is a great thread!

First of all I don't think the opus brand was created as a loss leader or a flagship for business purposes. I really think Carlito created it for exactly the reason he says he did...because he thought he could and because they all told him he couldn't. Once it was created he took advantage of several factors to turn it into what it is today.

Factor One, on purpose or by accident he hit the beginning of the 90's cigar boom, which leads to factor two...

...from a construction, blend, packaging perspevtive he hit a home run with the aficionados of the time. Those who got their hands on it loved it...

...to factor three, it then became the cigar you HAD to have if you were a part of the boom smokers. Every one of my buddies who were getting into the hobby because it was the thing to do only wanted to know when and where they could buy Opus...

... and finally, once F/N saw this phenominom the marketing machine went into overdrive. Big adds in CA, big adds in your local shop, big signs in the window of your local. Let's pick a name for a local....Holts for example. Now Philly guys, of which I was one, did Holts ever have any Opus in 1998?...hardy ever, but did you go in to ask?...sure you did...and after they told you no did you leave without buying something? Again, hardy ever. And, I'd also bet you didn;t always buy Fuentes.

Truth is, from 1995 to 1999 and to a lesser extent to today, that brand could have been a loss leader for the entire industry.

Personally, I don't like the brand. I am a nicotine wussy and they just plain make me sick. I don't care for the flavor profile and who wants to smoke a cigar that makes you feel like puking?

That being said this brand, by accident or on purpose, was the king of the boom cigars, and if it is or was ever a loss leader it was an awesome one because it not only carried Fuente but it brought boom folks into shops where they ended up buying whatever had a pretty band or a big pricetag or whatever a clever tobacconist could convince them was "almost as good as Opus". For serious smokers, it brought them into shops where they tried other blends and other brands.

I for one discovered the ERdM Flor de Llanza on a trip to Holts when I was looking for Opus. The FdL is still a staple in my humi.
 
I definately agree that that no publicity is bad publicity. I can definately see why a cigar shop would carry the Opus X even though at such limited qualitied as to not make a huge profit but still bring people into the store. Many other companies have used such gimmicks to get you into a store. I think that the it was an opportune move made at an opportune time. Big automotive companies do it all the time. I might be in a Ford dealership to buy a Focus, but that definately does not stop me from looking at a Shelby or a GT if they so happen to have one as was mentioned in this topic already. By the time I'm out of the dealership I might buy a faster Focus, or a base model mustang. I want to be the one in the Shelby or GT, I always think to myself some rich schmo is going to buy that car and drive it. In the cigar world, and I'm still new to this and haven't been to many shops, but i want to see THE THING too. Maybe even buy it if I can. So I have no trouble believing they're losing money on that brand, and more than make up for it by people like me buying the next best thing I can afford. Maybe I like the cigar and beome a repeat customer. So even if I never have an Opus X they might make ten fold of what I might have spent on that one cigar.




BTW: Definately a good thread...
 
moki said:
Whether you like Opus X cigars or not, or whether you like the "hype" surrounding them is irrelevant. What is germane is that you're talking about 'em. :)
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I will beg to differ. It is my opinion that both points are indeed relevant. Well, actually, that all three points are relevant.

It does matter if you like them or not, and how much you like them, as that is the primary basis of how much you are willing to pay for them and how much effort you will expend in procuring them. This is the most elementary point of the three, but I am taking them step by step.

The "hype" is also pertinent. Especially as the point I am about to make also lends itself into the third and final part of my post. I personally find it frustrating that Fuente advertises Opus X in such a seemingly omnipresent manner when they cannot come anywhere near close to fulfilling the current demand for the line. I then personally begin to wonder just how much $$$ of the Opus X's high price is inflated due to its marketing expense and strict inventory control (creating a "seller's market").

I am not of the opinion that all publicity is good publicity, particularly when it comes to "word of mouth" advertising. I generally seek "value" over "mystique" in my cigars, although both are sought out with quality being the primary consideration. I routinely tell others who ask my opinion of Opus X that I consider it to be a high quality cigar, but is overpriced. I state that I think the cigar's high price is influenced by the cost of its marketing machine and its perennial shortage, to say nothing of their massive overhead costs. I then suggest a high quality "boutique" cigar, such as Tatuaje.

Again, this is merely my opinion. I readily concede they are high quality cigars and I can see why they are so popular. It is the cigar's outlying factors that I do not care for.
 
moki said:
Here's another angle on the Opus X cigar as a loss leader concept. Look at this thread, for example. Just the fact that it exists means the cigars are being talked about. Let's say Fuente doesn't make money on Opus, as has been put forth... this is about the cheapest and most effective advertising you could possibly buy, both for Fuente and for the rest of their product line.

As has been noted before, many industries do things like this. Why did Dodge make the Viper? I'm sure they make money on the car, but it wasn't made as a profit center, it was made to bolster the image of the company.

Whether you like Opus X cigars or not, or whether you like the "hype" surrounding them is irrelevant. What is germane is that you're talking about 'em. :)
Click to expand...
Dodge made the Viper to sell more Corvettes.... :whistling:

Interesting discussion... Opus as a loss leader is probably spot on. For myself, I'd rather have some 858 SG's than Opus (talk about HTF!).
 
This is an interesting topic indeed. I actually had a conversation with the owner of my shop, the last time Opus was around. While I was there, word must have spread like wildfire because in the short time of 2 hours, I saw 3 boxes go. Now the thing that I was impressed by was that instead of buying whole boxes, which the people all are very capable of doing. I saw a handfull of people take maybe 5 of each size and leaving the rest so that others were able to pick some up. Its the usual suspects most of the time and so we all give each other a chance for the bounty. That being said, in my discussion with the owner, I asked why he didn't put a limit on the sticks. His reply was that he didn't make his money on the Opus, its the other lines that are important. He said, "I'd rather sell 5 boxes of 858's than a box of opus all day".

I agree for the most part that Opus is a loss leader. It gets people in the door and if a shop does carry them, even if they're out, the retailer has the opportunity to see if they may be interested in something else. I knew a bunch of people during the last boom and all they were after were the hard to gets and the limited smokes. It was always do you have Opus X (I even remember hearing Opus ten lol), without even having tried any of the other lines. One of my best friends in Chicago was one of those "chasers" and when he was given the chance to try a Don Carlos because the shop was out of Opus, his endless quest abruptly ended as he fell in love with the DC's.

That being said, I'm sure there is much less of the Opus tobacco than there is of the regular lines because of the process' involved plus the much smaller plot being utilized for Opus thus the limited availability. I personally love the line and to me, its the most consistant in taste to any other cigar out there. I don't always reach for one, ie in the morning, but when I do, I know exactly what its going to be like. G1
 
Personally, I can't find an Opus within 50 sq. mi.....I've called all my B&Ms that are close and they all say the same thing...'I get them in one day and someone will come and buy me out'....I asked one why they didn't put a limit and they said that just not how he wants to work....

I've asked all my B&Ms to set me aside at least one and I'll pay double but they all basiclly tell me to buzz off....But hey, thats free market for ya....
 
Excellent Read. They just hit around here, and the prices are ranging from 13 to 22 bucks.
 
Great Friday morning read and a good point . . . truth be told, if I look at cigars that retail for around Opus X's MSRP *cough* Tattoo Pete *ahem* they're generally very good smokes, but the Opus feels "spendier," from the stellar band to the weight to the appearance of the wrapper.

Not sure Fuente sells them at a literal loss, but certainly they can't be making much on 'em.

Love them when I can find them, which is only when I go out of town or snag one in a pass, but to be honest, I prefer the GOF anyway.

~Boar
 
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