??? 05/26/10 15:07 Read: times |
#176192 - sometimes satisfaction isn't even part of the equation Responding to: ???'s previous message |
Well the important thing is that in some business, a customer isn't expected to pay enough to give you a profit. But you are hoping that your business model will give you enough customers that will share the startup costs and as a group give you profit. And for commodity products, it is likely that the customers selects your product with a blank stare - not caring about any perceived satisfaction. They may buy the product based on the color of the box or if your box is above or below or to the left of other boxes from other suppliers of similar products.
Let's say that you are going to buy nails. One supplier may charge $20 but promise that 999 out of 1000 nails are perfect. One supplier may charge $10 but promises that 990 out of 1000 nails are perfect, and that the remaining nails may be too short or miss the head. A lot of customers will be plenty satisfied with the cheaper nails, as long as they have similar surface treatment and dimension and similar ability to withstand rust. A professional having a nail gun may on the other hand require the more expensive nails because it takes time for him to open his nail gun and remove the 10 incorrect nails. So quality and price and customer satisfaction are not constants. In other directions - a lower quality of an electronic device may require increased service costs giving less profit despite being cheaper to produce. It's important to try to deduce how much gain/loss you get from increasing the quality while at the same time increasing the cost and your required sell price or how the quality/cost will affect the number of prospective customers. |