Quote:
Originally posted by cj@Jan 27 2005, 02:22 AM
In reverse, JR's example of Wal-Mart - it is percieved as being really cheap, but people buy it because it is what it is ... moderate quality for a moderate price. I know many opranauts who shop at Ikea regularly ( recently I sorted my tool box and found 17 allen keys  ).
|
I think there is a difference between what is percieved and what is actually true. bush is percieved by 50% of US voters to be a lunatic. but those 50% are also biased anyway and it is far from a reflection of objective reality. though in marketing, some like Al Ries and Jack Trout might argue that in marketing, "the perception is the reality", you are talking about an actual business model, not what is percieved and what their underlying economics are that drives their business. In that sense, "perception" and the "reality" can be and often are very different. In the arguement about "quality vs quantity" I would argue that the missing part of the equation is "value". As a general rule, people are happy to buy crap if it is appropriately priced crap... and as a general rule, people are happy to buy expensive and exclusive things as long as it is not crap with a high price tag.
Here is a real example of where my opinion lies.
I believe that any business has to focus on the value that it offers. Bally Total Fitness is a company that has over 400 gyms in the US. Last year, they sold more than 3,000,000 memberships with revenues over 1,000,000,000.00 in the US. That is a decent volume by any standard on the planet.
However, of those 3,000,000,000 memberships last year, only about 200,000 renewed (mostly corporate memberships). In other words, people obviously are not happy with them and their experience as a member. Why? Well... My observation long before I became aware of thier numbers and the fact that they are in serious financial trouble is that they focus entirely on quantity and achieving sales goals and targets and really could not give a fuck about people, the facility and their service. In fact, if you have no membership and walk into a gym, they are all smiles. You buy a membership (in the form of a 1-3 year contract) and walk in the next day and for them most part, they just look at you like "what the fuck are you doing here". Thats typical of most gyms. I mean, why would a facility with a capacity of 1000 people want 15,000 - 20,000 active members actually showing up?
Then, they sell personal training packages. To be clear, I have many friends who are personal trainers and I also go twice a day to the most successful ballys gym in washington and know a little about their numbers. They sell personal training "packages" in the same way they sell long term contracts for memberships. There is a catch though... the trainers are complete fucking retards. One guy at the Ballys gym in Bellevue was just hired and had absolutely no history in atheletics, no history in training people, no education in exercise science or nutrition and in violation of ballys own rules, had no certification which is required so that Ballys can insure him. Why did they hire an idiot? My observation is that they have become so focused on reaching monthly sales goals, that they comepletely forgot about the client, what they are paying for and why they are there. The worst is that person is paying for professional help and for a solution to their problem. Instead they get some dickhead who is more focused on grabbing her ass and touching her than helping her. Even if he wanted to help her, he does not know how. He is more or less just a placeholder to semi-justify the $2000.00 personal training package the woman bought.
Bally Total Fitness is a company focused on volume over value. Quantity over Quality. They, like many companies, have a profound missunderstanding of why they were successful in the first place and subsequently, why they are now in decline. Egos have no place in business. They never built a principled centered business that focused on the needs of the customer. They built a business that was able to ride the wave of explosive industry growth (the fitness industry and total number of gyms grew so fast that it caused a steel shortage and affected the steel market for those who do not know). Being their for that explosive growth enabled them to fuck anyone and everyone because there was no shortage of people coming through the door. However, as the industry matures, changes and competition increases, they find themselves struggling. They have a billion dollar business (now with a market cap of just over 135,000,000.00) that is built on a backwards business model of "fuck as many people as possible, as fast as possible and hope they don't show up" and as people are increasingly aware and competition increases and changes the standards, they are starting to demand and expect both better and more. The company would now have to be completely destroyed and rebuilt as something new to save itself and given what I see, i doubt that will happen before they finally go under or are sold/aquired.
Quality always comes first. Even if the short term costs are greater, the long term benefits are exponentially greater.
in summary - i would say value first and quantity to the extent that you can grow without undermining value.
an interesting note:
"Made in Japan" after WWII was synonymous with shitty products. The company mission of Sony was to change that.