Do We Get What We Pay For?
As a youngster, I spent a good bit of time pouring over my cherished collection of Richie Rich comic books. Mine, like most of that era, contained pages filled with incredible mail order toys and novelty items – everything from x-ray goggles to spy cameras. For just a few dollars (plus shipping & handling), you could have every gadget a future 007 agent could ever dream of. But did the product ever deliver on the “promises” advertised?
Hardly. Unfortunately, like so many other wide-eyed kids, I fell victim to all the advertising hype and colorful illustrations. Being a young and naïve consumer, I wanted to believe the ads I read– that what I would receive 4-6 weeks later in the mail was just as advertised. I expected that my hard earned (or saved) $2.49 would purchase quality merchandise that would do exactly as it promised. Was I unrealistic, or did I get what I paid for?
That same question applies to consumers today. Let’s strip away the fancy merchandising, dazzling packaging and clever marketing – getting past the smoke and mirrors – to see what’s behind the curtain. Let’s focus on the product, and not on the hype.
Being in a stalled economy, most US households have knuckled down on spending and are much more conscientious about their purchases than they were 5 or more years ago. With tight budgets to adhere to, we are (or should be) sharpening our product knowledge skills and becoming more educated in our buying decisions. We expect quality product, but want it at better pricing. But is that what we are getting, or is it more appearances? Perhaps an even better question is – is it realistic?
Our consumer expectations conflict with what’s going on in production. The fact is raw material costs, labor costs and (of course) fuel costs have risen. It costs more to develop, manufacture and transport consumer goods today than it did 5 years ago. So how can retail prices and product quality be expected to hold, or show only marginal increases, if all the ingredients that it takes to produce the goods cost more? Several things, or combinations of things, can occur: 1) the retailer can take less profit margin on their sales to the consumer 2) the supplier or manufacturer can take less profit margin on their sales to the retailer, or 3) the product can change (usually not for the better) to keep prices down.
Once options 1 and 2 have been exhausted (and they usually are), option 3 must be visited. A quick and easy change may simply be to reduce the unit count (ie – less or fewer in a pack) of a product if it is packaged and sold in quantity. This allows the retail price and product to remain the same, but reduces the amount that the consumer gets per purchase. As a consumer, you may not even be aware of this change unless you really pay attention to the packaging. Other product changes can include alterations to the product’s specifications (or specs). The specs are the ingredients that define a product’s attributes. Like a recipe, the product ingredients (specs) combine to create what the end consumer purchases and uses. If an ingredient is changed, then some attribute of that product will be changed. In many cases the overall performance of the product may not be affected, or be so insignificant that it is irrelevant. (ie – a less expensive packaging material or other “non-product specific” change is made). In other cases, the spec change may reduce the quality of the item in some way or another, or reduce its overall performance. This change can be risky to a manufacturer who has promoted their brand as one of high quality. If a change is made that could jeopardize the delivery, or perceived delivery, of a “promise” that a product makes to a consumer, confidence and loyalty in that product can be compromised or lost.
So are we getting what we pay for? Short answer is yes. Are our expectations for quality product at cheaper prices realistic in today’s economy? Perhaps not… but understandable. In general, common sense tells us that price is usually an indicator of quality. For almost all goods we purchase there are good, better and best (or at least 2 of the 3) options for us to consider. We know that in most cases there is a trade-off when we opt for the least expensive, or cheapest, option available. What we need to make sure of is that we are aware of what the differences are in these options, and that we are comparing them properly so that our expectations match the reality. We need to step back from all the marketing hype that is so easy to fall prey to, and make sure we understand all the ingredients that define the product itself. If we don’t, then we can’t make our most educated buying decision, and may be left holding a broken spy camera that costs $2.49 + shipping and handling.