Value is a subjective call for each individual. Some people see good value in a German engineered car, in the latest and greatest phone technology, or in tailored clothing. Others see no value whatsoever in these things.
There is no magic. Manufacturers compete in different ways but are held to the same basic rules. In a competitive environment they choose to serve whatever market segment generates the best profits for their particular business. For some this could mean selling at lower price points but in higher quantities (the "mass market"). Others may go in a different direction, higher price points to a more selective audience. Either/both are legitimate strategies.
K&C sits in the middle. It is not the cheapest, nor the most expensive. That can be a dangerous place to be. They are subject to being squeezed by competition from both sides. Brand image/loyalty, superior customer/supplier relationships, sound financials, having strong distributors, all of these things come into play, beyond "just" product offerings.
They have a target on themselves by being the number one player. Everybody wants a shot at number one. New or revitalized competitors will (and do) attempt to exploit even the most minor weaknesses for their own advantage. "Niche" players enter and steal customers. Free markets arent pretty
The small size of the industry and the high demand elasticity of toy soldiers places additional pressures. Demand can fluctuate wildly with global economic conditions. As speculators sense lower profit potential they leave and liquidity dries up. Long time collectors can be forced to abandon non-essential purchases. New collectors are not created. Meanwhile the middle market can see its customers sucked away by cheaper providers on one end and high end producers on the other.
If all this occurs while raw material prices and labor costs increase, even as currency exchange rates move in unfavorable directions, a business can be caught in a wicked downward spiral.
K&C is a very well run company and very likely can adapt to whatever challenges it faces. This may mean radical changes to how it does business in the future. Only Andy and Co know. Im just speculating. The bottom line for me is that the K&C team has proven very adept and to be sound business managers. If higher prices are issued, no doubt its something that couldnt be avoided.
Individuals making threats about how their purchase behavior will change is really pointless. Talk, as they say, is cheap. (no pun intended) Actions are everything. The market will dictate what they must do. If price reductions are required, then something else will have to give. Simple.
