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Old Skool
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Discussion Starter · #1 ·
This post was inspired by one of C-40’s comments in the post titled "'extreme' chainlines??? ". He made the comment that 99% of the bikes at most shops are equipped Shimano drivetrains with very few Campy equipped bikes on the floor. This is certainly true of the shops in my area.

Here is my question; it does appear that Shimano does dominate the US market. This seems true at every price point for “serious” road bikes, entry level through high-end. Why is that?

It seems to me that Shimano has just plain beaten Campy when it comes to marketing their products to bike manufactures. However, I am not in industry insider and have no knowledge of how component manufactures market to the “OEM” market. As a result, I am very interested to hear the thoughts of those in the community who are in the industry.

My purpose is not to start a flame fest between the staunch Shimano and Campy partisans. My question is not intended to address the relative quality of these two companies’ products. Clearly some folks have very strong opinions on that subject. This is intended to be a discussion of the sales and marketing practices involved.

Personally, I do not have enough experience with either company’s current components to have an opinion on the relative quality issue. However, I would ask people to consider this. For the sake of argument, let us assume that Campy really is qualitatively superior. Then why are they (apparently) so much less successful selling to the OEM market in the US?
 

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NeoRetroGrouch
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Stogaguy said:
This post was inspired by one of C-40’s comments in the post titled "'extreme' chainlines??? ". He made the comment that 99% of the bikes at most shops are equipped Shimano drivetrains with very few Campy equipped bikes on the floor. This is certainly true of the shops in my area.

Here is my question; it does appear that Shimano does dominate the US market. This seems true at every price point for “serious” road bikes, entry level through high-end. Why is that?

It seems to me that Shimano has just plain beaten Campy when it comes to marketing their products to bike manufactures. However, I am not in industry insider and have no knowledge of how component manufactures market to the “OEM” market. As a result, I am very interested to hear the thoughts of those in the community who are in the industry.

My purpose is not to start a flame fest between the staunch Shimano and Campy partisans. My question is not intended to address the relative quality of these two companies’ products. Clearly some folks have very strong opinions on that subject. This is intended to be a discussion of the sales and marketing practices involved.

Personally, I do not have enough experience with either company’s current components to have an opinion on the relative quality issue. However, I would ask people to consider this. For the sake of argument, let us assume that Campy really is qualitatively superior. Then why are they (apparently) so much less successful selling to the OEM market in the US?
I would think that it is mostly price based on volume. Campy cannot offer components for the vast majority of bikes - hybrid/comfort. - TF
 

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Squirrel Hunter
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Top vs. Bottom

Could it have something to do with how the companies entered the markets? Now this is total conjecture with no insider knowledge or an adequate history of the companies entries into the markets.

It seems to me that Shimano made its way into the US market by putting a lot of components on low end bikes at a very competitive price point. Then Shimano seemed to work its way up through the component line until they got to the point where Dura Ace could compete with Record in the eyes of folks buying bikes at the high end. Basically a bottom up approach to the market.

Campagnolo seemed to do the opposite, marketing high end Record level components to the narrow niche of bicycling fanatics. Then they began selling to mass market by bringing more affordable groups to the market, recently taking advantage of their trickle down technology where last years Record becomes this years Chorus, etc. Basically a top down approach to the market.

Maybe as a comparison look at how Honda and Toyota entered the US market at the low end and have worked their way into the luxury market with their Acura and Lexus product lines. Bottom up. Then look at maybe Mercedes who started at the high end in the luxury market and are trying to get to a larger market by offering some more affordable models in recent years. Top down. Is the bottom up approach a more effective way to gain market share across the board? Could it be the bottom up approach establishes some brand loyalty which the companies then build on where the top down approach relies on lust and envy?

Stogaguy said:
...My purpose is not to start a flame fest... ...For the sake of argument, let us assume that Campy really is qualitatively superior...
If you did not want a flame fest why in the world did you add that last line which serves absolutly no purpose for your original querry. Perhaps the more appropriate assumption is to assume both companies offer products of equal quality at most levels and the market share issue relates to how the companies market and distribute their products in the US.
 

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dedicated marketing...

Campy produces much smaller volumes and is primarily aiming their products at owners of high-end bikes. Campy is not interested in MTBs, hybrids or low end products. Shimano, on the other hand, covers everything.

The small volume sold by Campy has nothing to do with quality. Campy products work as well as any.

Most people never get enough exposure to Campy to even consider it. If they go into a shop and only see one bike with it, they might think it's low quality or some off brand. People tend to buy what's available and familiar.

I used nothing but Shimano and some Suntour from 1985-1995, but when I bought a Tommasini Sintesi in 1995, I decided to put Campy on it. No more shimano after that.
 

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I'm sure it is a price issue. Ignoring mail order street prices which are a result of minimum advertised pricing policies, Shimano is cheaper. After riding Campy for 40 years without a single broken part and riding Shimano for 3 years with 5 broken parts, there is no question in my mind that the superior quality of Campy is worth the extra money. But the majority of riders will go for the lower price. A bike manufacturer can offer a lower price with Shimano gear every time. Pure and simple economics.

I think the majority of cyclists have never owned or even ridden a Campy equipped bike. That's how dominant the market share difference is.
 

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For a while in the late 90's, due to exchange rates, Campy was actually cheaper for bike manufacturers. There were quite a few bikes that came out with Campy equipment at that time. It is a simple matter of economics for manufacturers.
 

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Old Skool
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Discussion Starter · #7 ·
Face value please.

KUWJ, Thank you for your insight. I would speculate that you are on the right track with your “bottom up” versus “top down” theory.

On a separate note, why not take my qualifying statement at face value? I really am interested in learning something about the marketing strategies used by component manufactures. Accepting (for the sake of discussion) the supposition that Campy is qualitatively superior does interject some interesting aspects into the equation.
 

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Shimano built its dominance inthe U.S. during the change to indexed shifting and mountain biking. Before indexed shifting there were a lot of component manufacturers and everything could be mixed and matched. Shimano designed their drivetrains to be an integrated solution. Indexing became a huge marketting success when it was introduced, and that gave Shimano the power to demand that full groups be used or you would not get the price discounts your competitors were getting.

Most of the component comanies went out of business at this time, really only leaving Campy and Suntour. Both those companies needed a couple of years to produce a workable indexing system. On top of that Campy was going through a rough period in business execution and product design, the nadir of which was probably their failed mountain biking gruppo. This allowed Shimano to take the lead.

When Campy gave up the mountain biking market, it gave Shimano even more market power. Shimano was able to force exclusivity deals onto the big bike makers. Bike makers like Trek, Specialized, Cannondale, etc. grew to make up most of the performance market; and they set rules with their retail shops about what else can be sold in those shops. By heavily discounting to a few big companies, Shimano was able to control most of the market.

Shimano would have done well with just the switch to indexing and mountain biking, but it was not just satisfied with that alone and used slimy business practices to maintain and extend its market position. They spent years trying to drive SRAM out of business using price fixing, dumping, tying agreements, etc. On top of the illegal tactics, they sometimes screwed their own customers in an attempt to harm SRAM. For example, Shimano redesigned their rear derailleurs to use a weaker spring so SRAM's grip shift would not work.

Even today Shimano is more concerned about harming any potential competitor than it is with helping its own customers. They do not make threadless headsets because they would have to pay a royalty. They made crap crank/BB design after crap design, only coming out with their current product after the patent owned by a U.S. company expired. The same thing happened with pedals; they came out with their Look clone pedal when Look's original patent expired.
 

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Old Skool
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Discussion Starter · #10 ·
Thank you

Under ACrookedSky, Thank you for your very informative reply. I clearly recall the period when indexed shifting hit the market. At that time, I could afford to ride what ever I wanted and elected to go with DA based on the introduction of their freehub design. To my mind the outboard bearing placement offered by the Shimano product fixed a design flaw in conventional hubs that I had always found frustrating.

It is interesting that you mention Suntour. Personally, I have always thought that they had a chance to become the dominate player when they introduced their slant parallelogram rear derailleur design in the 70s. To my mind, this was, on paper, superior to anything else on the market. However, they never did produce a version that had the level of fit and finish of the then industry standard Campy Nuovo Record. Had they built a truly pro level group around this innovation, I think that they could have made some serious in roads before their patent protection ran out.
 

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Under ACrookedSky said:
Shimano built its dominance inthe U.S. during the change to indexed shifting and mountain biking. Before indexed shifting there were a lot of component manufacturers and everything could be mixed and matched. Shimano designed their drivetrains to be an integrated solution. Indexing became a huge marketting success when it was introduced, and that gave Shimano the power to demand that full groups be used or you would not get the price discounts your competitors were getting.

Most of the component comanies went out of business at this time, really only leaving Campy and Suntour. Both those companies needed a couple of years to produce a workable indexing system. On top of that Campy was going through a rough period in business execution and product design, the nadir of which was probably their failed mountain biking gruppo. This allowed Shimano to take the lead.

When Campy gave up the mountain biking market, it gave Shimano even more market power. Shimano was able to force exclusivity deals onto the big bike makers. Bike makers like Trek, Specialized, Cannondale, etc. grew to make up most of the performance market; and they set rules with their retail shops about what else can be sold in those shops. By heavily discounting to a few big companies, Shimano was able to control most of the market.

Shimano would have done well with just the switch to indexing and mountain biking, but it was not just satisfied with that alone and used slimy business practices to maintain and extend its market position. They spent years trying to drive SRAM out of business using price fixing, dumping, tying agreements, etc. On top of the illegal tactics, they sometimes screwed their own customers in an attempt to harm SRAM. For example, Shimano redesigned their rear derailleurs to use a weaker spring so SRAM's grip shift would not work.

Even today Shimano is more concerned about harming any potential competitor than it is with helping its own customers. They do not make threadless headsets because they would have to pay a royalty. They made crap crank/BB design after crap design, only coming out with their current product after the patent owned by a U.S. company expired. The same thing happened with pedals; they came out with their Look clone pedal when Look's original patent expired.
Taking an innovative idea and seeing if they improve upon it isnt such a bad thing, this is what ensures evoloution. They may be forced to pay a royalty for a threadless headset design but are you sure thats why they dont produce one, and why would that be such a bad reason for not producing one? Many mountain bike manufacturers wont pay the royalty to Specialized for the Horst link, Does that make them all worthy of your distain?
P.S. Srams grip shift works perfectly with Shimanos derailiers.
 

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What's wrong with Shimano cranks and BB???

What BB and cranks were a flaiure from Shimamo?
there square taper BB don't die and octalink was fine! The old rebuilable DA/XTR were great. I have seen octalink BB go for years with no issues under heavy riding and ST BB go even longer with lot's of use!

Now the first few XTR External BB had soem issues with the bearings, but Shimano handled it fast and made changes. Now they are tops!

Octalink was only fased out due to Bullseye patnent ran out and in the typical Shimano way, they want to bring a new standrad to the market and drive conusmers the other way .

Putting any hatred for Shimnao aside that peole have, their cranks are great and some of the best shifting espically for MTBs are Shimano chainrings.

Nothing shifts smoother or faster than XTR. Now pricing and wear is another story! The cranks are nice, do well and perform great!

I have not hape for them what so ever and I like most their products, but Campy for road and SRAM for MTB have now become my choice for personal preferences and style.
 

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Squirrel Hunter
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Sunset on Suntour

Stogaguy said:
...It is interesting that you mention Suntour. Personally, I have always thought that they had a chance to become the dominate player when they introduced their slant parallelogram rear derailleur design in the 70s...
A nice write up on Suntour's history that helps answer some of the question and confirms many of Crooked's observations.

http://www.users.globalnet.co.uk/~hadland/page35.htm
 

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Piles said:
Many mountain bike manufacturers wont pay the royalty to Specialized for the Horst link, Does that make them all worthy of your distain?
The difference is that there are many ways to make a rear suspension bike without using a Horst link. Shimano does not make a headset that is usable on a modern bike.

Piles said:
P.S. Srams grip shift works perfectly with Shimanos derailiers.
Shimano's introduction of "light action" in 1995 was done specifically to make Gripshift not work. It spawned a whole host of aftermarket items like the Bassworm to make up for the derailleurs' crappy springs. Often all it takes to harm a company's reputation is a single year of customers having problems. The light action issue lingered on for years.

Ironicly it got SRAM involved in the rear derailleur market, and after a few years of making RDs that were prone to breaking, they eventually came out with the X.0 system, which was superior to Shimano's offerings.

DIRT BOY said:
What BB and cranks were a flaiure from Shimamo?
Octalink was a crap design. There were two versions. The first used splines that were too small and were easily damaged. The second version fixed this, but it was only used for XT and LX. The higher end groups continued to use the initial size. Aside from the spline size, the design was inherently stupid. The crank could suffer backlash, which would eventually destroy the splines and/or loosen the crank.

The many iterations of BBs and pedals show how Shimano has changed. When they introduced indexed shifting they labored long and hard to make sure it worked well and would continue to shift well with the moderate wear, cable stretch, and such that could be expected with normal use. Now Shimano uses the Microsoft approach and uses its customers for beta testing.
 

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The reason Shimano dominates the road racing OEM business is very simple, they offer substantially lower prices to the oems compared to what they offer to the aftermarket distributors. Campagnolo offers the same price to all its customers, regardless of them being distributors or manufacturers. Why is that? Campagnolo's business has always been in the aftermarket, so they've been always offering their best pricing to them, and now it would be impossible to offer 20% lower prices to the manufacturers, while Shimano does a nice mix, making less money on the manufacturers and much more money with the aftermarket. SRAM is doing exactly like Shimano, so they'll be very successful with the oems.
If you saw what kind of pricing Shimano and SRAM are offering to the oems you'd fall from your chair!
 

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Under ACrookedSky said:
The difference is that there are many ways to make a rear suspension bike without using a Horst link. Shimano does not make a headset that is usable on a modern bike.


Exactly! They dont make a headset.


Shimano's introduction of "light action" in 1995 was done specifically to make Gripshift not work. It spawned a whole host of aftermarket items like the Bassworm to make up for the derailleurs' crappy springs. Often all it takes to harm a company's reputation is a single year of customers having problems. The light action issue lingered on for years.

Ironicly it got SRAM involved in the rear derailleur market, and after a few years of making RDs that were prone to breaking, they eventually came out with the X.0 system, which was superior to Shimano's offerings.

The XO system is superior in your opinion?


Octalink was a crap design. There were two versions. The first used splines that were too small and were easily damaged. The second version fixed this, but it was only used for XT and LX. The higher end groups continued to use the initial size. Aside from the spline size, the design was inherently stupid. The crank could suffer backlash, which would eventually destroy the splines and/or loosen the crank.

Still got my original octalink on my Azonic MTB and it shows no signs of being a "CRAP DESIGN"

The many iterations of BBs and pedals show how Shimano has changed. When they introduced indexed shifting they labored long and hard to make sure it worked well and would continue to shift well with the moderate wear, cable stretch, and such that could be expected with normal use. Now Shimano uses the Microsoft approach and uses its customers for beta testing.
All that and Sram and Shimano are still compatible.
 

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Big Bad John said:
I have a pair of Shimano pedals manufactured by Look in France.
Yup, I have a pair of PD7401s. All aluminum, lasted forever.
 

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Piles said:
All that and Sram and Shimano are still compatible.
The point is that for awhile they were not compatible without a lot of hassle. SRAM was forced to change its design. And now SRAM is having the last laugh.
 
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