| ??? 05/26/10 22:26 Read: times |
#176209 - Know your customer Responding to: ???'s previous message |
You don't get a Rolex for $10. So don't try to produce a Rolex unless you know that your intended customers are willing to fork out a lot of money. You really must know your customers before deciding what is good or bad quality. A Rolex owner may think a Tissot or Certina watch is rubbish. A Certina owner will most probably don't think his watch is low quality, but probably think the Rolex owner is stupid for paying $25000 for a watch.
Justin Fontes said:
The mentality of trying
Per Westermark said:
to deduce how much gain/loss you get from increasing the quality while at the same time increasing the cost pretty much sums up the outsourcing that is done in the U.S. in trying to keep quality at some consistent level while trying to maintain a profit margin. I, however, have a completely different mentality. Buy local and you will find that the quality is much higher and when the stuff breaks one can yell at the person in person. The phone calls to yell at people are even being outsourced, nowadays. The mentality of profit comes first is highly detrimental to every aspect of society and promotes greed rather than providing a service or item to the perspective customer. A good seller might actually be put under by the evils of mass production, but one should see how society benefits from mass produced items. Just look at the threads where items are coming from China. Everyone complains of poor quality and makes puns of high lead content. Obviously, this is giving China a bad reputation as a country that cuts corners and cannot be trusted. For example, the cap within a cap within a cap. When the first items being produced on a mass production line are within specifications, that does not guarantee that the given product will be within specification later on down the road. Then you have to pay for QA people. The QA person does not know that there might be lead contaminants or other byproducts that are not or cannot be tested for. Finally, the main point is that there is some happy medium where Per Westermark said: But, one must keep in mind that if profit is to be held high, then the quality will dictate itself. The higher the quality, the more one must pay. The more one pays, the one more expects in return. You get what you pay for.
...the quality/cost will affect the number of prospective customers. I may get what I pay for. But my will to pay will differ depending on product. I may be willing to pay huge amounts of money for a high-end video HD projector. But I'm not so willing to pay much for a lamp timer. And if I buy 5 lamp timers and finds that one of them looses the time, I'm not too upset. And the next time I buy timers, I will most probably get another model and/or manufacturer - even if I liked the previous model. As a seller, you must realise that for some products, you will not find customers interested in paying top price for a top product. They just want "a" product. How many customers are interested in paying twice as much for the nails just because you buy more expensive equipment to laser-scan all produced nails to find any nails with a slightly smaller head? Having to aim for the type of product there are customers for is not a horrible mentality. People who aim too high goes bankrupt because their products stays on the shelves. You must be in a market segment where premium products exists for there to be any meaning with trying to produce a premium product. That is better than trying to lie and fool customers. The petrol companies do sell premium gasoline. They may sell 105 octane gasoline at a premium price. People buy because they think there is more energy in higher-octane gasoline. Wrong. Higher-octane just means that the engine can run with a higher compression without knocking. But if your engine compression is optimized for 95 octane or 98 octane and the sensors are never detecting knocking and reducing he power output, then there is nothing to gain. It is bad when a seller cheats and sell extra expensive products adding a "quality" that the customer has no use for. What advantage is there to get extra expensive but highly polished nails? Beautiful, yes. But extra smooth might mean less friction against the woods, resulting in actually getting worse nails. As I did mention in a previous post, the customer may actually perceive it as a better delivery if they get 105 units with 2 broken, than 100 units with 0 defects. But that depends on type of product. If 1 out of 100 network cables is permanently broken and the customer will see the lack of link light instantly, then the badwill from the failure may be tiny. And a small compensation may overshadow the problem. If you sell burglar alarms to expensive vehicles and 2% of the units fails silently within 6 months, and one of the vehicles gets stolen, then there is nothing you can do to compensate for the badwill. I will not switch brand of matchsticks if one in 100 doesn't light up. If I buy a spare tire and when it gets time to use it finds that the production quality had managed to get the bolt holes at the wrong location, I will be mad as hell. You really have to look at a problem from multiple angles when trying to figure out perceived quality and perceived value. For some products, there just is no way you can produce smething with good enough quality at the price customers are willing to pay. Then there is two options. Sell rubbish, or find some other market niche to operate. More than one company have released some cool electronic service that they let people use for free for the first year. Every user may love the product. The company may think they have a true winner based on all the goodwill and splendid reviews. Then they start to charge $10/month for using the service and suddenly notices that 95% loved the product only as long as it was free. The will to pay for the service may not even be enough to cover the hosting of the required servers. Next thing - don't blame China for bad quality. We have production in China. All component batches gets scanned for defects - including spectral analysis to detect lead or other unwanted contamination. The workforce in China is cheaper. But their skills can be just as good. And with the cheaper workforce, it is possible to perform extra QA steps that would have made the product unsellable if produced in most of Europe or in US. Why settle for one engineer focusing on quality issues when you can have 10 engineers? After all - quality is to have a product that fulfills or exceeds the customers expectations within the areas the customer is interested in and/or have use for. If a product survives being driven over with a car, you don't really improve the quality by switching from aluminum to titanium casing. That is just a luxury change. And that requiers that the products competes in a luxury market, or there will not be any customers perceiving the titanium as extra qualiy and hence interesetd in paying. If the factory ships one out of 50 units with a minor scratch on the casing the perceived sense of quality may be low when you sell some flashy product for the living room. If selling equipment for hard use in automotive environments, the customer may not care at all - but they do care about the number of units that still works 5 years from now. |
