Cheap is the New Expensive
Wednesday/May/27 2009 Filed in: Marketing / Business
Finding the absolutely cheapest price is the new American pastime.
Sears built its business from humble beginnings by offering its products organized around the idea of good/better/best, a value equation based on providing acceptable quality at an affordable price.
But Wal-Mart shifted the paradigm and the consumer collective embraced a new raison d'etre -- cheap is king.
At one time the buzz phrase was planned obsolescence. We actually worried whether manufacturers were deliberately short-sheeting us on quality.
But over recent years, many corporate touchstones of quality have crumbled and turned to dust. Quality is Job #1; Total Quality Management; ISO 9000 and Six Sigma just don't seem so important anymore.
As one of the unfortunate aspects of globalized manufacturing, cheaper became more important than better, as Wal-Mart, and many other cost-cutting profit-seekers proceeded to hang-ten as they surfed the cheap-beats-good sea-change.
Perhaps the tony stores on the other end of the price spectrum missed a cue. While the discounters shouted, "We're cheaper!," maybe the upscale retaiers could have responded, "Yeah, but our stuff lasts longer!," if, indeed, it does.
After all, in the long run it's cheaper to buy something for $10 that will last for 5 years than to buy something for $5 that will only last one week beyond the one-year warranty expiration, yes?