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They say that you get what you pay for but in our modern corporate world is this really the case?
Certainly better quality products are generally more expensive than similar items of only standard quality and the fact is that people are willing to pay more for a better product. The next time some crazed young man hurtles past you weaving through the traffic without a helmet on the odds are he will be trying to kill himself on a Honda. Is this because there is status in dying on Honda? I suspect not, it is because Indonesians know that Hondas are the best in terms of quality and reliability.
But our corporate masters are clever and more and more the cost is determined by our perception of the product rather than its true quality. Only this morning Al Jazeera proclaimed “Perception is everything.”
Take cars for example. Every year “Choice” magazine in Australia used to produce a reliability table for the makes of cars available for sale in that country. For many years the listing varied very little. The most reliable car on the road was always Honda followed by Mazda. Honda also tended to be more expensive than Mazda. “You get what you pay for” people would say.
But just hold on. The last on the list year after year was…….. Jaguar! Rather an expensive car to be bottom of the list you might say. Each year Choice would disclose that Jaguar owners spent more time on the bus than any other car owners - even during the first year after purchase. Perhaps there is an explanation, could it be that such a high performance car is like a good lover and needs time to recuperate or perhaps, like an expensive dog, vulnerability to sickness is the price you have to pay for a pedigree.
Indeed the Jaguar was a legend in it’s own lunchtime and it was not until the company was taken over by BMW that Jaguar’s legendary lack of reliability was finally addressed.
The point of all this is that branding and marketing success is often not related to the quality of the product but more determined by a bit of clever marketing combined with some tricky footwork in the boardroom. You know what they say these days “If you can’t beat ‘em buy ‘em.”
Perception of course is not only limited to the corporate world. Years ago while working in a major hospital in Australia I found an interesting thing – you don’t necessarily get what you pay for. Medical and nursing staff are far too professional to tell you what happens behind the scenes. Good hospitals go through a continuous scrutiny of hygiene. Surgeons are constantly monitored – and judged by their infection rates. As a result it was well know among the medical fraternity in that city that one of the city’s leading surgeons, one that people often asked for, was in fact a dirty doctor, he had high infection rates, he didn’t like washing his hands, probably picked his nose and scratched his bum in the operating theatre. On the positive side people did say he had a nice bedside manner.
“Oh he is a lovely man even though he does pick his nose.”
The people in their ignorance flocked to him and too many died after surgery. I learned quickly that going private so you can chose your doctor will not necessarily get you the best care.
I also learned that a common practice in the private hospitals system is that if a patient is going to die he or she is discharged to the public hospitals to keep the private hospital’s mortality rate down. Once again perception is not necessarily based on reality.
In many cases reality eventually replaces false perception but unfortunately often too late, we have parted with our money.
In computing Microsoft has won over 90% of the world’s computer operating system market in spite of the fact that experts will tell you that superior systems fell by the wayside (ever heard of Acorn?). Finally after years of dominance a wheel (possibly several wheels) is/are falling off the Microsoft machine. Microsoft has been punished in the courts for overcharging for its products and recently received the worlds largest ever fine for unethical business practices. In spite of this people have paid vast amounts of money for an operating system that has a level of unreliability that we would never tolerate in, say, our motor cars.
People are finally waking up and the rebellion by Microsoft users has forced the company to announce price reductions in its Vista operating system.
Years ago the legendary battle for the video tape market was a prime example of business acumen beating product quality. As we know VHS won the mass market while out of the public eye Betamax was used by the professionals for its far superior quality right up until the demise of video as the recoding medium of choice.
Recently we have seen a replay of this battle with Sony’s Blu Ray beating HD DVD in the fight for providing the standard for high definition video. Once again time will tell if this was related to the quality of the technology or to the shrewdness of business dealings. Early signs suggest that this time it may well be that the “better product has won”.
Let us move closer to home and the battle that is raging for our attention and the desire to sell us a humble air conditioner. Did I say humble? If you believe the advertising these are highly sophisticated devices with an ever expanding range of capabilities. If the present trend continues it is only a matter of time before they will be frying eggs, darning the odd sock and picking up the kids from school.
Make no mistake air conditioner sales are very big business with a booming market up for grabs as Indonesians become more wealthy and one of the first home luxuries they buy – an air conditioner.
The perception battle is being waged through the media. We have all seen the television ads. Every couple of months or so yet another article appears in the Jakarta Post trumpeting another new development in air conditioners. Inevitably these “objective” articles promote several brands and it is to be noted that LG always features highly. It is also noticeable that the brands of air conditioners that some in the industry regard as being the most reliable and effective often don’t get a mention in what we assume are objective articles.
There comes a point where erroneous perception can become irresponsible and perhaps even dangerous. The most recent article claimed that newly developed LG air conditioners will kill bird flu virus. That is some claim to make. How do you test this? My imagination conjures up a laboratory in an electronics company with a room full of people wearing face masks pumping bird flu virus into air conditioners. Somehow I have a nagging doubt in the back of my mind………
I am not alone in my concern, the BBC reports that officials fighting the bird flu threat in Indonesia share my thoughts, see http://news.bbc.co.uk/2/hi/asia-pacific/6255763.stm
While such an air conditioner could be very useful to a caring farmer who likes to keep his chickens comfortable for you and I the most important issue is the machine’s cooling efficiency and reliability.
I recently came upon a couple with an expensive new villa. They were not happy. In spite of being appropriately sized their air conditioners were not satisfactorily cooling their living areas. A number of technicians had attempted to solve their problems without success. These people are not interested in frying eggs and darning socks they want an air conditioner that keeps them cool and doesn’t need constant attention.
Extraordinary claims made to create questionable perceptions of products appear to be on the increase. These claims need to be questioned. We need to fight for business integrity.
If we wish to keep our lives running effectively with minimal disruption caused by reliability failings in the equipment and systems we use on a daily basis it is worth buying wisely. My advice is that whatever the product you buy try and get beyond what the adverts and articles tell you. An objective decision based on first hand experience can give you a product that will perform well and require minimum maintenance for many years.
Phil Wilson
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