No One Is Talking About Quality In This New Economy.
We all know the facts, they are obvious. Revenues are down, unemployment is up and people are spending less. This we all know. There is a rush to downsize, cut overhead and provide lower pricing for the consumer, believing this is what they want.
It is not. The consumer does want what we call a “perceived value” which could be a Rolex or a BMW at a fair price, or a pair of sunglasses at 50% off.
Yes, discounting is flagrant and better value means lower costs to many. But what the consumer really wants is better value. In short, they want quality at a reasonable price. That’s what the market is learning and leaning towards. Better quality at a fair price. This is the perceived value you want to aim for.
Much will happen from such a commitment: sales will go up, repeat business will increase, word of mouth advertising will generate additional sales. You will succeed as you will be delivering what the consumer wants—perceived value defined as high quality at reasonable prices. Consumers are tired of buying junk. The auto industry has learned this the hard way. We are willing to pay more for quality goods and services because quality with a reasonable price is what we want, not cheap junk that costs less but is worth even less.
Yes, the dollar stores are doing well, as many people are out of jobs and shopping there is a necessity for some, however, high-end items are also selling well because they are of the high the quality that so many are looking for. Quantity is not what consumers are looking for, or cheap merchandise, but quality at a reasonable price.
What can be so hard about this?
Even more clear is the fact that if a quality product is introduced, market demand will increase and cost per piece will go down, resulting in a better item at a lower price point. That works. Figure out how to deliver this magic combination, higher quality a a reasonable price, and the better you make it the higher the demand and the lower the cost will be, reducing the price points for everyone.
This was the concept that American statistician W. Edwards Deming proposed to businesses during his work in Japan, resulting in what we now know as Japan’s reputation for quality manufacturing and economic power. His methods demonstrated how increased quality results in reduced costs. He was right. Now we must get the lesson, too.
