Don’t Cut Corners
The Issue: When responding to opportunities, businesses typically have several decisions to make. Among them, the trade off between the prices they will ask for their new products or services (if any) and the cost of delivering those products and services at a profit. For a manufacturing business, however, there is a point at which minimizing manufacturing costs can make it difficult if not impossible to produce products that people will want to buy (or not regret buying), no matter how much or how little those products cost to produce or how profitable they may be.
What I Think: Case in point: The pending transition from analog to digital television broadcasting has had businesses of all types scrambling for a piece of the pie. Some have been more successful at that than others. The makers of TV stands, for example, saw opportunities among consumers needing places to put wide-screen TVs purchased to take advantage of anticipated improvements in digital broadcast quality.
Sue and I were among those consumers, having bought two new wide-screen TVs and two new TV stands: one for the 42” TV in the family room, a slightly smaller model for the 37” set in our master bedroom. Each stand was purchased online from a different vendor, and each arrived unassembled in a large, flat box.
Both TV stands had six sides: top, bottom, front, back and sides, plus assorted screws and other hardware, and came with detailed assembly instructions. There the similarities ended. Although the larger TV stand was not easy to assemble, all the parts were well made and performed as intended. Not so TV stand number 2!
The second TV stand, though not appreciably smaller than the first, was disproportionately less expensive–$47 v. $200–but left a lot to be desired in all other respects. While the first stand came with metal screws, many of the key items needed to assemble the second stand were plastic, and snapped in two as soon as we tried using them.
The upshot? Instead of a second new TV stand we had a pile of useless junk, which we deposited in the trash less-than two hours after opening the box. That’s when we went back online to order TV stand number 3!
The Message? Should Sue and I have realized we were getting a little too much of a bargain with that second TV stand? Probably–caveat emptor, and all that, and we paid for our misjudgment (shame on us!). But if your customers aren’t getting what they pay for, you might not have those customers very much longer (shame on you!).
What Do You Think? If you have a manufacturing business, how do you price new products, and how does our experience with those two TV stands relate to you or your competition? Your comments are welcome. Have you registered?
Bill Willard is a freelance writer in Clearwater FL. He has been a high-impact writer and editor for over 30 years. In addition to his byline pieces, Bill’s beat includes ghostwriting and editing for businesses of all types and sizes, professional practitioners and individuals, and is a www.thefreestyleentrepreneur.com Contributing Author. Visit his Website: www.writergazette.com/WillardAssociates.shtml
Or contact him at email@example.com.
Popularity: 4% [?]