Ron -- your comments are spot on!!!


Marklin lured me into their product line soley because it was a quality item MADE IN GERMANY -- call me a fool -- and yes I am hard-pressed to find any difference - in fact there is none -- between the German-made Marklin and China made Marklin without looking at the underside to see where it was made -- but as a consumer I LIKED THE FACT it was made in Germany --

Marklin should remember it's loyal customer base and not go the way of the others. If this means a smaller, leaner Marklin in Germany, so be it. If everything is outsourced to Chinese factories then some of the mystique is lost.

Roco -- now who knows the REAL story -- but a lot of things can happen when a company goes under. Are we getting the public relations version, or the real version? Many companies blame economic conditions when in FACT it can be problems within the organization, or the people that run the place. Who knows why they are having trouble...there are many reasons I am sure.

Let's not say the industry is totally lost due to the video game generation -- all it means is that companies need to refocus and be smarter -- and maybe smaller! Who cares -- why does every year a company need to grow? It does not need to always grow -- it needs to maintaina profit, and growing larger and getting out of control is not an answer in this day and age -- I say cater to the speciality buyer and loyal customer -- keep them and enjoy your company's smaller, but profitable condition!

I think that we have the duty to try to teach to our children and
any other child to be occupied with this hobby.

I agree,the cost of the trains is high.But,it is better buying one
or two loks per year and playing with them for years than buying
other things,that you are going to throw them away in a few days.

Lets have a look (only in german)

http://www.salzburg.com/.../15/artikel/1609322.html
http://www.roco.cc/conte...mp;m_id=1179&admin=1

Märklin, ROCO and the rest all share similar economic destinies, and as businesses are really no different than other businesses with one exception. The similarities are labor/production costs and the need to find a cheaper labor force in other / emerging countries.

The one difference (exception) to other businesses is that both Märklin and ROCO, among others, produce a product which is no longer in demand. ROCO has one production line: trains. Märklin may be a little better off in that they produce a few other kinds of toys.

But what constituted a "market for model trains" once is gone, not only in Europe or the United States, but everywhere. It's the evolution of our planet.

In my estimation, pouring money into the U.S. market will not succeed because there is NO demand. Our kids and their kids have other interested. It is really that simple.

The train market, once robust in Europe, will continue to decline, in part because of their soft economy and high prices, but also for other reasons.

The time for model trains, whether it be Märklin, ROCO etc is over. The only question that remains is which of the manufacturers can find ways to hang on a little longer than the others to cater to a dwinding market.

Peter Neumann

Ron: I agree when it comes to cheap starter sets. But their long line of heavy metal locos is legend, unequaled by any other maker. I guess you and me together wouldn't have the cash for even buying half of their current die cast engines ... [}:)]

John

Thanks for the interesting link, Steven - seems that ugly guy Magdfrau didn't treat his workers the nicest way. And now he's done ... [xx(][}:)]

John

Interesting posts Peter and I agree with most of what you say.
My complaint with model rail is the complete lack of business skills from both the manufacturers and retailers. Demand for products will not be there if no effort is made to advertise or market the items available. HO railways have a great advantage with the range available and the buildings and scenice items from some excellent firms.
Here in the UK Hornby is blooming and although not all because of its railway products it does show what can be done if a manufacturer listens to its customers and gives them what they want.
At the model rail show in Glasgow each year there are thousands of visitors over a three day period many of whom are children who are amazed at the layouts on show. However the retail stands are to say the least pathetic with the usual crisp eating coke drinking untidy people who are there in the hope to make some easy cash.
Hornby on the other hand have an excellent stand and encourage the youngsters and make sure there are plenty of free leaflets etc available. Where is Marklin????? nowhere to be seen.
David

otehr than model RR magazines in the US, what advertising is there for any trains?
Lionel (and MTH) are more visible as it seems many more stores, often hardware stores, not just hobby stores, carry those brands, plus the name lionel in the USA is synnonomous (sp?) with model RR.
I would dispute that toy/model trains is dying. Just go to one of the collector shows, like the NMRA convention, Greenburgs, Timonium MD, etc, and you will see a lot of model RR enthusiasts.
The problem is high prices (failure to control costs), too much focus on limited editions (which falls into high price), and bad/weak management. I don't think these people at Roco could see any pattern or trends in the EU economy, otherwise they might have made some adjustments in manufacturing and product line to streamline it while the EU is underpeforming.
Hobby shops are a very odd bunch, and not really the best measure. You will see similar complaints about what you find in them on other hobby sites - like armor modellers complaining about stores that have RC, mostly planes, trains, etc. Very often what the store sells is at the whim of the owner based on his favorites.
Most model RR companies in the US have pulled out of the bigger stores, probably because it costs $ just to display items. These big stores aren't going to put up a big display case and a small layout just because they're asked to.
Marklin (Trix) does need to advertise more in US (and probably UK too) Model RR magazines. There could be more exposure there. In the US, HO DC and Lionel are predominant, and Marklin will never get the upper hand, but Trix could make a bigger dent in the HO market.
I don't entirely buy the argument that Marklin/Trix is too expensive either. Look at the prices of some of the higher quality Athearn models (Genesis line), and Broadway Limited. Not much difference between that and what you pay for Marklin. And check out the prices of Lionel's top of the line locos - lots of $ there.

I had been a 2rail DC'er before I lived in Germany. I had heard of Marklin but the information was very limited. it was just something they had "over there". I don't think the level of information in the US has improved much in the past 30 years. One would think that with a presence here (Marklin USA) that they would take up the banner and get the word out. I don't think any one outside the existing Marklin community even know that they (Marklin USA) exist.

Marklin also still has the "toy train" perception amongst many of the scale HO operators in the US. This also needs to be overcome.
I don't think the effort they (Marklin USA) put into the National Model Trains Show by the NMRA I saw last week in Cincinnati was very good. The few trains they brought to they show could compare against any other mass produced HO model in dteail or quality, especially the big boy and Trix GG1 of the US prototypes, but even if they did just set up a nice small detailed and scenic'ed layout, it would have been better than the two crappy tables they set up - one with the boring marklin systems artwork and two loops of track. The Trix table was just a small table with a white cloth over it. These guys spent more time and effort on the carpeting than the diplays I think.
This is where it starts, and they had nothing really to catch the eye. They need to develop a better working display demonstrating the digital system, signals, cranes, operating quality, etc, to prove to the model railroading public (in the USA anyways) that these are more than toy trains these days.

Latest from Roco

- Negotiations have failed
- Raiffeisenbank states that Maegdefrau's demands were massively excessive (Very contentious were the rights to/ownership of the various brands, patents, ...)
- A "rescue company" is being formed to take over
- All three affected plants will continue operation (not included are the administrative headquarters...)
- 400 employees to be laid off = 1/2 of staff

- Verhandlungen um Roco gescheitert
- nach Aussage von der Raiffeisenbank waren die Forderungen von Herr Maegdefrau massiv überhöht
- Auffanggesellschaft wird gegründet
- alle 3 betroffenen Standorte sollen weitergeführt werden
- 400 Mitarbeiter werden entlassen

Additionally, deliveries of new products have ceased, although orders are still being taken.

See also:
http://salzburg.orf.at/stories/46343/

And for comments from a dealer (Modellbahn Pürner) see:
http://www.puerner.de/aktuell/2005/09.html (in German)

That's all for now.

p.

Thanks for the update,Shame on roco[xx(].

Ron: The poor workers have my deepest sympathy - but I wouldn't bet a Dime on such try.

Some years ago members of our family's Austrian branch received gigantic $$$ losses, and when the dust had settled their lifes were destroyed totally - all this caused by the especially greedy and corrupt [xx(][xx(][xx(] Austrian government who never take care about people or jobs or the life of others.
The only thing those bastards do perfectly well is to fill their own pockets - they didn't even apologize for their robberies, let alone paying reparations.

So better don't hope for any help from "them" ...
John


post scriptum: Sorry friends for becoming that angry. But the most terrible thing was we couldn't [:I] give effective help in fighting the evil, then !

Of course,there will kick devil out.

Today we have too many companies run by business school graduates who never did an honest day's work in their lives. They focus on spreadsheets, reports, business models, etc. and never get their hands dirty doing the actual work. This tendency inceases as the business grows in size, but is growing more and more prevalent in smaller businesses. I don't have a business degree (I have three engineering degrees) and enjoy getting out and working. I have about 70 employees, know them all by name, interact with them daily, and work out on the shop floor as much as I can whenever the "business" side of the company doesn't get in the way.

In my opinion, you have to KNOW the product and have a passion for it for a company to succeed in the long run in today's market. Too many companies are now being run by people who only see reports.

Thanks, David. This business was started by my Father-in-law and a few associates in 1956. When he died in 1995, I left what I was doing and came in to run it. I had worked at the company while attending college and had performed almost every function of the manufacturing process. From 1984 to 1995 I did all the production control, order management, and accounting programming for the business, so I was intimately familiar with it. I do employ a professional CPA to keep my books straight, but I really feel that the Harvard Business model that a qualified manager can manage any business with out knowing the product is way off base.

I dashed that little diatribe off as I was heading out to shipping to push the products that needed to go out today off the floor and out the door. In re-reading it, it sounds self aggrandizing and conceited. I usually review my posts before I let them go, but this time I was in a hurry. My apologies for waving my own flag.

Very interesting discussion...

I have never ridden trains growing up, and even as an adult only very rarely, yet I was motivated by model trains as a kid - Lionel. My son has never ridden on a train and he loves his Brio/Thomas and now Märklin trains.

I think that wherever there are a lot kids with relatively high income parents, you have a potentially large market. But that market needs to be developed - it does not require millions of dollars to improve on basic channel management. Märklin has a lot of room for improvement in the US and probably many other countries - this represents a huge potential for them - if they can get serious about it.

The cost of the products are also important, because you obviously need to make a profit (the bigger the better), but if you charge too much, then although the parents are well-off financially, they will opt for competing products or activities for their kids. Today, kids have many options for entertainment and hobbies - ie video games, movies, sports, etc... Children can and should have a variety of activities, but if Trains are going to cost thousands of dollars for a couple of digital starter sets - then most parents, even in the relatively affluent courtiers of Western Europe, North America, & Japan will simply not go for it.

Furthermore, the model trains need to be appropriate for today's generation - they need to be plug and play digital and with sounds - this the computer & video games generation.

I wonder if there were good digital starter sets with sounds (for example the 29571) readily available in hobby shops and toy shops for $149 USD - how fast would the fly off of the shelves. I live in Northern California and I have seen this set in shops for ~$600 to ~$700, and I have seen parents who are very interested in purchasing it for their child shriek and gasp when they see the price. I know it is available via the Internet for less, but most new entrants into the market will not look at the Internet first.

This may seem like impossible simultaneous equations to solve - however, the opportunity is huge and Märklin has a strong foundation and more resources than many other companies had.

You can look at some the more successful companies of today - and they probably had more impossible conditions back in their history, than what Märklin is facing today. Yet some of these companies despite their challenges, or maybe because of their challenges, they made bold changes and transformed their companies and created the brands that we now take for granted. Consider the likes of Nokia, Sony, Honda, Nike, etc... Today these companies spend many many millions of dollars on advertising and brand maintenance and brand building, however, that is not how they got to where they are. They built themselves up from humble beginnings - many times they saw markets and opportunities that other did not see or did not want.

In my opinion, Märklin management needs to have the will to make the necessary changes, and they need to focus primarily on the kids (their future customers) or the parents of kids, and not put so much focus on us 'old timers' nor the us collectors. These customer groups all have value and they can overlap, but Märklin should prioritise their future, and that is the kids.

If Märklin were to be more effective at leveraging the global supply chain and the global market place, they can begin the process of transforming themselves into a truly global brand. This will not happen over night, but it is possible.

For the sake of Märklin and this hobby, I hope the best for Märklin and their management.

Hahaha, unbelievable - the next megalomaniac who'll be out of business, soon

John

p.s.: discount price tag for US-set 29570/29571 - consumer friendly €280 www.mbs-fischer.de

It's interesting that we look at such a small company, which is part of a very small industry, and we get very upset. Yet we don't comment on the fact that HP announced yesterday 14000 jobs being terminated in the computer industry, or Kodak cutting 10,000.
It is not to say that the model train industry is changing, what I hope we see is better product and support for the remaining players.
Stephen(USA)

Well that explains the milchmädchenrechung*...

In terms of the translation, it could have been derived from that.

die Magd = maidservant
Frau = woman

A bit redundant in that maid servant is already feminine, but...

In terms of translation (for single words) the BEST online source is called Leo, http://dict.leo.org/, which also lists different meanings for words. Example

*
naive (also: naïve) assessment of the situation = die Milchmädchenrechnung

naive (also: naïve) fallacy = die Milchmädchenrechnung

Rechnung also = math/..., so naive math or in this context really naive accounting.

p.

Hi all,

I am reading with interest some of the post regarding marketing and sales of Model-Railroads.
When it comes to young People getting to be intersted in Model-Railroading, two Questions.

1). Why is it that a Trainshows ( at least here in Canada ) a lot of young Children are still fascinated by Train-Layouts.

2). Why are Toytrain Mfg. are not going back to to the tried and true Start-Sets from the past.

What is needed is a basic Start-set with all Metal Cars and Locomotive not with a lot of detail but robust so when a car falls on the Floor it will not fall apart ( see Marklin #4000 for Cars ).
For a Price of about US$ 149.00.

On a side note when it comes to pricing all US/CANADA Dealers will soon disapear, for example the DEALER COST FOR # 29571 from MARKLIN US is ( hold your breath ) US$ 388.71 at a fair mark up of 30% it should sell for about US$ 500.00.

The 7% Solution of some of the German Dealers (mark up of 7% to sell a lot) will not work in the long run.

Just my two Cents worth.

Martin

Interesting:

>DEALER COST FOR # 29571 from MARKLIN US is ( hold your breath ) US$ 388.71

Reynaulds asks $637.47 => 64% markup
Marklin.com aks $595 => 53%

Marklin.de asks $351.80 (Eur349 minus VAT) retail.

That should indicate that the dealer cost for German dealers is less, hence MBS-Fischer.de's price of $280, suggesting a German dealer cost of maybe $260.

Well, that is quite cost increase. 7% markup may not be sustainable, especially for small dealers. But a 100% or more seems also unsustainable, because it will put M* out of business.

I agree with your sentiment, I have commented before that this forum is one of the better ones I have seen. People tend to be respectful and very helpful.

On a related note, I have wondered why Märklin does not make more use of the Internet - their website in Germany seems to be ok, however, the Märklin USA site is not very useful and worst they promote the higher outrageous prices as was pointed out in an earlier comment. Once customers check around they can see that these prices are a rip-off - this hurts the image of Märklin. My comment is not that Märklin should sell or not sell via the Internet. However, Märklin should use the Internet to communicate much more with their customers around the world. They can do a lot to develop markets around the world by putting more and quicker information out in the main languages. And I do think they should establish global and more competitive pricing.

Finally, while I put a huge value on the Internet - if it is used better, it can greatly benefit Märklin - I also put a huge value on the potential that dealers have - especially the potential to get new parents and kids into the hobby. As has been said before, Märklin can and should make huge improvement in how they work with dealers - especially outside of Germany. Again, I think dealers are one of the keys to getting more parents and kids into the hobby.

Marklin has to make a radical change to the way that communicate with
people who loves trains.Arrrogance is not the right way to find new
customers and keep the old ones besides you.They never answer to any
question,letter or email.When i first find the link "marklin-users.net" i thought it was an official marklin link.They have to do something like this.