RTR Market Sectors

[Ian J.]

With the recent debate on the Hornby 2013 thread bringing up the subject of quality of detail on RTR models, a subject within it that is 'close' to my heart has surfaced - that of the market segments of RTR, and the lack of definition of them and the 'missing' hi-fi sector.

 

So I wanted to start a thread to open up a discussion regarding them, covering what they might mean, what we would expect of them, etc.

 

The market segments, as I currently think of them, are:

• Lo-Fi - this is, in effect, Hornby's Railroad range, but would also cover any more basic model from any manufacturer with little in the way of separate detail, a simpler, robust chassis, able to negotiate 1st radius curves. Basically 'toy trains'.
• Mid-Fi - the current Bachmann, higher end Hornby, Dapol, Heljan and ViTrains populate this area. Common to all would be the retention of the OO 'sloppy' standard, to 2nd radius curve. It could be further divided into three:
  • Lower - Hornby's Tornado with a better finish would go here, less separate detail but with a better quality finish.
  • Middle - The older Bachmann locos might go here, as well as some of the older Hornby, maybe even some of the Heljan diesels like the Hymek. They have some separate detail but not as fine or fragile.
  • Upper - Most of the top end Hornby, Bachmann, Dapol and Heljan would go here. Mostly separate details, with a few things that are a bit harder to accomplish perhaps being moulded on.
• Hi-Fi - this market doesn't really exist in the UK at the moment. It would consist of virtually entirely separate details except where it would be really wasteful or utterly pointless to do so; it would have a much stricter wheel/gauge/track standard, allowing such things as splashers to be correct size; sprung buffers for prototypical usage, etc. It might even allow for an accurate scale gauge combo at its upper end.

 

What do others here think? Is this even worth discussing?

[PaulRhB]

Ian I'd say things like Golden Age etc are the hi Fi end with everything including custom sounds so I think it's there already just at a significant jump in price. Ultimately we might see things like moving valve gear and opening doors become common on even the plastic rtr high end as the electronics and servos get smaller. I think the museum spec high end where everything visible is modelled is only relevant to a small group though who need to know it's there while most if us just want accuracy when we look up close on the track and don't want to pay for detail we can't see except on the workbench cradle.

Railroad is good for the six foot rule and their current ranges stand up mostly to a couple of feet away but then it's things like figures and couplings that tend to give away even the best rtr.

[Pete 75C]

Hi-Fi - personally I think this would require a realistic scale-gauge combination. 00 v H0 has been discussed many times on this and other forums but tens of thousands of us are happy to model 4mm/ft using 3.5mm/ft track. We debate whether you can get away with a 1/87 or 1/72 vehicle almost forgetting that our locos and rolling stock are overscale for our trackwork! EM, P4 etc are very much alive with many skilled advocates, but I don't ever think they will be in the majority. I'm full of admiration for true scale but will continue to bumble along in 00.

As for Lo-Fi and Mid-Fi when it applies to level of detail, I have a Hornby 56 dating from 2006 before the retooling and I think it's an absolute gem. Having compared it to the more expensive retooled model, I don't feel the need to rush out and buy a more modern one.

Maybe it's me that's Lo-Fi. I think it was Cyril Freezer that said "if you can't see the detail from 18 inches away, don't bother with it and concentrate instead on the overall impression".

[Bernard Lamb]

The first problem is that the top end of the market usually use a different gauge track to run their trains on.

A further complication is that they do not all use the same gauge for this track.

This stops any attempt to cater for that market stone dead as it is pretty small in the first place and is then fragmented even further.

FIA did try with a model to run on 00 gauge track. However they catered for a minimum radius that had more in common with the broader track people.

It did have a few problems but ultimately the price proved a step too far. I did get one at a substancial discount that made it a viable proposition as far as I was concerned.

There is a ceiling for 00 gauge model locomotive.

The present price of around £120 with a further £30 t0 £40 for the extra bits is about as far as I believe it can go at present.

The UK market seems to be able to support the likes of Alan Gibson and Brassmasters but is not quite willing to accept the price/quality of Weinert.

Then there is the question of what market to aim at.

Other threads go on about the recession and lack of dissposable income but this is not a level playing field across all ages and interests.

A large group of people who retired in recent years with final salary inflation proof pensions are quite well off compared with most sections of the poulation.

I would bet good money that the percentage of railway enthusiasts in this group is higher than the population in general.

That opens up the question of what market should be aimed at. It will obviously change dramatically in a few years.

Bernard

[Kenton]

LoFi - looks somewhat like what it is supposed to be; (may have some detail missing, may have some angles wrong - but nothing you could spot unless you claimed to be an expert o the subject); stays on the track; 90% of buyers would be content but would consider modification.

 

MedFi - A pretty close representation of the prototype - "faults" are down to manufacture process and not ignorance of the fact; still stays on track but now operates smoothly - probably DCC ready a minimum; 99.9% of buyers would be content.

 

HiFi - The unachievable gold standard would be completely faultless and easily converted to any gauge - only the 0.1% not pleased with MedFi would be prepared to spend enough to purchase - and would still complain that it is not RTR-P4 or that the representation of the internal pipes were too small/large, and the moustache on the driver's face is wrong fro the period of the model.

 

Or to put it another way 99.9% of modellers are content with what is produced or are prepared to do work to improve on it. Some will never be happy.

 

[Ed.] To fix the bust editor formatting ... and to add that the "statistics" quoted above, like all statistics ever presented, have nothing to do with reality and are made up to illustrate a point.

[The Stationmaster]

Then there is the question of what market to aim at.

Other threads go on about the recession and lack of dissposable income but this is not a level playing field across all ages and interests.

A large group of people who retired in recent years with final salary inflation proof pensions are quite well off compared with most sections of the poulation.

I would bet good money that the percentage of railway enthusiasts in this group is higher than the population in general.

That opens up the question of what market should be aimed at. It will obviously change dramatically in a few years.

Bernard

 

This is obviously a critical factor in that any particular sector of the market cannot exist unless there are buyers with a suitable level of disposable income present in sufficient quantity to support it.  From watching other areas such as, for example the buying of antiques or collectable china etc it is clear that generally buyers tend to be in older age groups although not necessarily pensioners simply because they have reached higher salary levels and/or reduced outgoings by getting their offspring off their hands and/or paying off their mortgages.

 

This sector of personal wealth has grown substantially in recent years simply because of an ageing population and past changes in asset ownership plus a long era of income inflation outstripping most areas of price inflation.  But I would not put the percentage of railway enthusiasts in this group as any higher than the population in general - there are plenty of folk around spending a lot more than model railway hobbyists (or collectors) on a huge range of things varying from collecting antiques to going on a couple of cruises a year.  

 

The key in the more expensive areas of the model railway market I suspect lies not just in catching, reviving,  or creating the interest of this group but in offering them what they consider is a worthwhile purchase for the price sought and quality offered in comparison with other potential places to spend their money.  These are the people who are able to 'spend a bit more', but they expect something tangible and significantly different for that 'bit more'.  This applies equally I think to the upper end of the r-t-r market and perhaps part of hi-fi (as classified in the original post) - where people who have the money to spend will judge, or value, what is being offered and will possibly even tend to compare that purchase with another area where they could be spending their money.  

 

The exception to this is the modeller with an interest in a particular area or era who will buy things which suit his/her perceived needs and place that above a pure value approach.  And there are those between these two extremes who, for example, make a choice between competing r-t-r B1s based on a whole range of factors one of which is 'prototypicality' (for want of a better term).   

[trisonic]

I think that the problem in the UK is that the average punter wants Rolls Royce quality (and detailing) for the price of a Ford Ka.

 

Besides the old gauge vs scale thing is the big old monster in the dark alleyway.

 

And I've just reminded myself why I model the US stuff.......

 

Best, Pete.

[34theletterbetweenB&D]

Had the UK's first RTR mass manufacturer - and that means Hornby-Dublo - decided to go with HO and 'massage' the consequences for splashers, outside valve gear etc. to make running models as the mainland European makers did, then where would we be by now? I suppose it is possible that a 'Golden Age' style operation would be doing near P87 as a RTR product. But - and lets compare to the European HO market - most of that is still produced with a resolutely commercial sloppy wheel standard and all that goes with that. In fact for all the exquisite top sides and higher prices, in running gear fidelity the average of HO is arguably lower than OO. Lots of three rail, pizza cutter flanges on steam roller wheels, over width to 3.5mm scale in the running gear...

[Ian J.]

I don't know about 99.9% of modellers being happy with mid-fi (or less). I know that I for one am not of the perfectionist brigade, but I'd still like to have the option to buy models that are better than the current offerings at the Upper Mid-Fi level. I'd like to see a better OO wheel/gauge standard, such that I can either run the models on finescale OO track, or readily convert them to a wider gauge of choice (EM or P4). With the current 'sloppy' OO standard compromises have to be made that make that conversion awkward. There are also often compromises to the body work as well - oversize 4F splashers being one case in point though there are many others.

[highpeak]

I think that the problem in the UK is that the average punter wants Rolls Royce quality (and detailing) for the price of a Ford Ka.

I think this is correct, and I think it means that the OP's hi-fi market probably won't be catered to, at least not in R-T-R.

 

"Altogether the British model railway scene is more 'accuracy conscious' but still the 'trade' doesn't do it sufficiently well to satisfy the critical modeller. There are those who want something unique and hopefully better in some indefinable way. They will have to make at least some of it themselves"

Guy Williams in "The 4mm Engine" published by Wild Swan in 1988.

[Ian J.]

Regarding modelling vs plonk-and-run, I've just had a thought:

 

If I were to pay around £50 for a Lo-Fi model, I'd be more likely to be willing to risk taking a scalpel to it to attempt to make it better than to an Upper Mid-Fi model at £130. But, for the Lo-Fi £50 model I'm not going to be able to produce anything like the finish of the £130 one let alone make it anywhere near a Hi-Fi at say £250, and overall my time taken even to attempt to do so could be 'costed' to far more than the extra £80 I'd be paying for the Upper Mid-Fi, or the extra £200 for the Hi-Fi one.

 

So, yes, modelling is what it is about, but the limits of my skills with air brush and lining transfers will always be a limiting factor - I'm never going to be able to match the finish the manufacturers can do so I'd rather they did it, until such a time as a simple way of achieving the same finish becomes reasonably possible for the average modeller *.

 

* I'm thinking more in terms of lining than air brush work as most of us could probably learn to wrangle an air brush given the time, but having facilities to be able to do so as and when becomes prohibitively expensive. As I understand it, to get a good air brush finish needs a balanced humidity atmosphere, free of wind and dust. A clean room, if you will, with decent extractor ventiflation. As far as lining is concerned, until there's a decent lining printing system for hobbyists we're stuck with transfers and bow pens, neither of which is anywhere near the quality of the printing technique used by the RTR manufacturers.

[34theletterbetweenB&D]

... I'd like to see a better OO wheel/gauge standard, such that I can either run the models on finescale OO track, or readily convert them to a wider gauge of choice (EM or P4)....

 The problem there is that this is not 'stand alone' change: RTR track to the same standard has to be available to make it a viable offering. Things are inching in that direction in HO, (thinking here about Weinert's plans for 'Mein Gleis') but HO has the basis of a true scale/gauge ratio. The smaller OO/4mm market and the question around whether to go OO in some finescale format, or a flavour of EM, or even a commercial near-P4 standard; well that's just too much in the way of choice for anyone to 'jump' in my view: short of some benevolent billionaire deciding to share the joy...

[Ian J.]

...short of some benevolent billionaire deciding to share the joy...

 

If I win the lottery (and if it's enough) I'll do it...

[martin_wynne]

But - and lets compare to the European H0 market - most of that is still produced with a resolutely commercial sloppy wheel standard and all that goes with that. In fact for all the exquisite top sides and higher prices, in running gear fidelity the average of H0 is arguably lower than 00. Lots of three rail, pizza cutter flanges on steam roller wheels, over width to 3.5mm scale in the running gear...

 

Exactly. Despite all the wailing about 00, the truth is that the UK got it right. You can't have decent models on an exact-scale track gauge unless you also use exact-scale wheel profiles -- and they aren't practicable for RTR. H0 doesn't work.

 

Martin.

[Ozexpatriate]

Market segmentation has boiled over again in the Hornby new announcement threads.

 

Market segmentation is not about a single dimension of product features like 'lo/mid/hi fi'. It is about identifying groups of potential customers with similar needs/wants.

 

For example you could define a couple of dimensions like demographics and purpose.

 

Demographics of the purchaser

• Children
• Adults buying for children
• Teenagers and single adults
• Adults with young families
• Older working adults
• Retirees

End purpose

• To play with (such as children do)
• To watch run (think a retiree with his first train set in 50 years)
• To realistically operate a model railway
• To detail and redecorate
• To display (perhaps with the occasional outing)
• To collect (accquire and set aside, box unopened)

Each purpose will have a different sensitivity to separate product features.

 

Product features

• Price
• Robustness
• Reliability
• Performance (scale speed, slow speed running, hauling capacity, etc)
• Fidelity of shape
• Fidelity of details
• Prototype prestige
• Production volume

The matrix of feature sensitivity to purpose quickly gets very complex. Reliability will be very important to someone who wants to operate a layout, but won't concern someone who wants to display a model.

• Teenagers and adults with young families might both be price sensitive, but their purposes might be very different.
• Older working adults will be less sensitive to price.
• A retiree who has bought (or was given) his first model train in 50 years will have very different objectives to someone who was a lifelong enthusiast.

As a final market segmentation exercise, you then look at intersections of the two and see what they have in common, and package products for this niche/segment.

 

For example, products branded as Railroad might be designed to appeal to teenagers, adults with young families and people purchasing train sets for children. Robustness might be emphasized over say fidelity to details.

 

This is all well and good as an exercise for professional marketers. but there's a lot of crossover. I am in the 'older working adult' demographic yet, I have purchased trainsets for children, models primarily for display (with an occasional outing) and others for layout operation.  Which segment am I?

 

Doubtless Hornby has lots of data about sales. Except for some simple guesses regarding trainsets I suspect they have very little data about what happens to their models - the original purpose behind the purchase.

[Steve R]

This market segmentation is something I often ponder, feeling its still not quite there yet.

 

I can believe the 'lo-fi' and 'mid-fi' markets both do exist, but currently equivalent products in the same market are not far enough apart. Taking Hornby's Duke of Gloucester as an example, I would expect the Railroad version (RRP £82.99) to be quite a bit cheaper. Conversely, the 'main range' version (RRP £119.99) could arguably be priced higher and incorporate separately fitted rather than moulded detail.

 

Personally I would only be interested in the higher end product, valuing quality/detail over price. If it cost close to £200 without decoder etc then so be it - so long as it is good - but I may be in a minority for saying so.

 

As for really high-end UK outline models - 'Hi-Fi' in the OP - I don't think this can come about until RTR track gets better.

 

Are highly priced 'lo-fi' models undermined by the second hand market? If you're looking for a cheaper model to hack about into something else, second hand is just as good an option and probably cheaper. I could imagine wanting to buy a Railroad locomotive say, for your child's layout, but there again I might be of the mind that helping them buy a decent second hand model at a show could be not only cheaper, but also more of an education for them.

 

So I'd like to see the higher and lower end models move further apart. It would be interesting to know the sales of equivalent models in the two markets. Does the Railroad version outsell the 'main range' version by 2 to 1? or are they equal? etc. etc. How do the margins compare on the two? We'll never know, but it could tell us a lot about the average UK modeller.....

[Grovenor]

The advert on the back of MRJ 220 must say something about the Hi-Fi market segment. The implication is that the original buyer paid at least the price asked, possibly more. How big is that market? I suspect a large part of the market at that level is for larger models, mainly 0 gauge.

But it does seem to be enough to keep the professional builders working with a waiting list.

Regards

Keith

[peterl]

Don't forget that people do not buy goods or services (Products) per se.  What they buy is the perceived benefit they will obtain by the purchase, ownership or use of the product.

This must be added into the segmentation process.

'Product features' is only a part of the equation. The perceived benefits from those features will help to define the market segment.

 

Peter

[Andy SR]

So in which category would you put the likes of Trix, Marklin, Roco, Flieschmann.  Their prices are well above the equivalent Hornby/Bachmann. And it isn't import duty as they cost the same in Europe. Yet, I would not call them Hi-Fi necessarily, as some UK offerings from Hornby and Bachmann are their equal, I would suggest.

[34theletterbetweenB&D]

MaTrix, Roco, Fleischmann, all mid-fi, anchored there by the wheel standard and set track systems, and all that goes with it. Typically ranging from mid to upper end of the band as a package, the topsides outdoing the running gear. The move to China and use of HO manufacturing expertise developed there over four decades has enabled RTR OO for the UK, mostly in the bottom half of the mid-fi band, offered at a significantly lower price than European produced equivalents.

 

 HAG, Weinert, (and there are doubtless more) is the premium end in European HO.

[45568]

To my way of thinking, low-fi should be just that, as you have described. I would only have medium and high mid-fi!!, low mid-fi would be in low-fi, even the Hornby Tornado.

I would like to see Mid-fi move away a little from R1 and R2 curves, R3 or even R4 minimum perhaps, which would possibly remove some of the compromises we see on this range of models.

I also wonder if I am alone in wishing for "setrack"-style curves in 24,30,36.42 and 48" radii. 40 years of laying Streamline with tracksettas and I still can't get it right!

 As regards pricing, I feel the Hattons/Heljan Garratt will certainly test the market, it appears "a lot of bang for your buck", but still nearly 200quid. Also, I feel the Heljan O2, given the amount of research, might also push the envelope a little, given that O1s are 100quid, and O4s around 70 at certain retailers!

 The real High-fi stuff will always be there. If you have the resources you will always be able to commission what you want from somewhere. I think it would be naive to consider 250 quid as a benchmark for High-fi, 600-1000 would be nearer the mark. The previously mentioned FIA Twins tested this market, and did not really address the issues raised until much remedial work was undertaken. Even with High-fi, you can bet someone will complain it won't go through setrack points!

 I recently purchased my first OOWorks loco.,( LMS 2F), and a little cracker it is too. Not cheap, but runs beautifully, and is really a hand-built model, but really it is Highmid-fi! Or is it?

 will follow this thread with interest I think, just hope it doesn't go the way of the "Hornby 2013" thread.

Cheers,

Peter C.

[Ian J.]

£250 was a figure for factory manufactured RTR Hi-Fi rather than handbuilt Hi-Fi, which as you say would be in the region of £1000+ (for larger locos) and due to being individual one-off builds, can cover just about any prototype.

 

Edit: The idea of very large radius settrack curves is a useful one. However, I doubt it would be particularly popular so the unit cost would be quite high, meaning many people would go for the cheaper option of using flexitrack and tracksettas or their like.

[34theletterbetweenB&D]

...I would like to see Mid-fi move away a little from R1 and R2 curves, R3 or even R4 minimum perhaps, which would possibly remove some of the compromises we see on this range of models.

I also wonder if I am alone in wishing for "setrack"-style curves in 24,30,36.42 and 48" radii. 40 years of laying Streamline with tracksettas and I still can't get it right!...

 I would favour a mid-fi minimum radius that would eliminate the need to notch cylinder faces, reduce cylinder block length, avoid the temptation to fit flangeless wheelsets, omit detail like footsteps, canyons between vehicles, and other deviations. Problem is, what radius do you go to? Straight up: no point (ha ha) staying with any existing UK set track radii. The reason why is that set track use implies the use of the standard set track point; and it is this 'averages second radius' item that is the ever present incubus that effectively locks the RTR model makers to second radius minimum provision.

 

General practise over many years has been for the next step up in OO to require 36" minimum radius or thereabouts;  I find I can get away with 30" radius plain track, 36" rad points with the visible compromises mentioned above eliminated. The most readily available flex track system in the UK happily has a point of this radius, which matters for the majority who won't build their track. However even this modest move likely means 80%+ of the potential OO market can no longer run the item, so it is going to be expensive to reflect the cost recovery on a much smaller sales volume. Unless that is the running chassis is designed well, such that extra / variant parts added to the basic lo-fi chassis, upgrade it to mid-fi. As an example, on cylinders make them shorter for lo-fi, with a longer moulding at scale length for mid fi.

 

Much larger radius set track brings problems of its own. Already becoming floppy and twisty at 3rd radius if the sleeper base is light for best appearance. I suspect it would be cheaper to pay for a 'how to' lesson with flexitrack if this gives difficulty. A yard/metre long steel rule is what Peco ought to sell as an adjunct to their Streamline in my opinion. Really is the sole alignment and curve setting vital adjunct tool, in addition to the eye. I struggled in my early teens, until someone at the WGC club showed me how. Fix down a point, and lay the flexi from there, steel rule flat for straight, on its' side and curved as required between two locations to lay out the curvatures. A bendy piece of steel makes it flow.

[DaveF]

Those of us who are fortunate enough to have space for 36" radius curves would indeed like manufacturers to make models designed for that radius and nothing less in "00".

 

However many do not have as much space and want a "roundy roundy"so have to use smaller radius curves (I used to when I lived in a small flat).  We would be excluding such people from the market as well as dealing a "death blow" to the train set market if we persuade manufacturers to abandon production of locos and stock suitable for second (or even first) radius curves.

 

So I think we are stuck with the present situation - unless we build bigger houses in future.

 

David

[coachmann]

I think this is correct, and I think it means that the OP's hi-fi market probably won't be catered to, at least not in R-T-R.

 

 

 

Can't get this reply outside the box today so here goes. The locomotives from Hornby and Bachmann far exceed the detailing on super-detailed scratchbuilt and kitbuilt locos that I ever saw and, believe me,  more probably passed through my hands than anyones in the UK during my 40-odd years in painting & lining. The hi-fi market is dominated today by plastic RTR manufacturers. Who would have thought that would happen 20 years ago...