Product Quality as a Function of Ethics

Reflecting on my earlier post about the classes of products, it would be naive to assume that every company sets as a goal to provide a first- or second-class product, one that delivers benefits that are well worth its price; but it would be equally naive to assume that every company seeks to fall into the lesser classes where customers have to be tricked, pressured, or forced to purchase an item whose price-for-benefit is disadvantageous. There are options in a range of classes for virtually every product, and buyers and sellers gravitate toward one or the other tendency.

The motivations of the buyer are fairly easy to identify: a buyer seeks to find an acceptable product for an acceptable price - even when a buyer is not deliberate in his decision, this remains a consideration. That's not necessarily "the best" product, as people have different opinions about "the best" and a product of lesser quality may be adequate to their needs, or a person who desires the best but cannot afford it can often get by with a second-class product.

The mistakes they might make are related to ethics: in most instances, when buying for their own consumption, any harm is inflicted upon themselves. In instances when the purchaser and the consumer are two different individuals, there is the problem of one person deciding what is "good enough" for someone else, and mistakes can occur where they are wasteful of money in purchasing a product whose quality is more than necessary, or irrelevant to the aspect that makes it serviceable to the user, or when they are conservative of money and furnish the user with an unsuitable product for the sake of price.

The motivations of the supplier are more difficult to identify, and are far more subject to ethical scrutiny because the choice is more deliberate and perpetual. That is, a buyer who makes a poor choice can remedy the problem with their next purchase, whereas the producer of a product (not necessarily the seller, as a retailer has greater flexibility in inventory management) who makes a poor choice often continues to turn out the same product, over and over, insistent that their original choice was appropriate.

If the producer is right in their decision, and the product they produce represents a good value to some (but not all) buyers, then the choice to continue turning out the product is entirely ethical. In this instance, their intentions are honorable (to provide for buyers who haven't the means to obtain the very best some acceptable level of quality at a price they can afford, or perhaps to serve a different set of values as to which product features are important and which are inconsequential).

If the producer is wrong in their decision, and the product they produce does not represent a good value for the price to any buyer, then the choice to continue turning out the product is clearly unethical. In this instance, they realize the inferiority of the product, and must turn to sales tactics to apply pressure or deception upon buyers who would, on their own, recognize the poor value of the product, and convince them to buy it anyway.

My sense is that all three of these situations may bear further consideration, but even so, I have the distinct sense that this brief consideration strikes at the heart of the matter - and that further meditation may elaborate on these basic principles, perhaps uncover a few exceptions, but not likely lead to their contradiction.

Wealth of Nations

Smith's Wealth of Nations still amazes me, in that a book written nearly 250 years ago retains so much relevance to economics of the present day. Situations we presume to be entirely unique to our age, never before encountered, are merely echoes of history, and the principles that held true at a time when civilization was taking the first timid steps out of the agricultural age remain valid, entirely worth considering in the assessment of the situation in the information economy of today.

I've stumbled on this notion multiple times, and each time it intrigues me: that while the incidental details of interaction have vastly changed over time, its fundamental nature remains the same. The gimmickry of the platform can be a distraction from the essential nature of the interaction, and too much focus on the gimmickry of the "new" can lead us astray, such that we neglect more fundamentally important considerations, and end in failure.

If, in building and managing an e-commerce operation, the essence of the interaction is obscured in favor of the gimmickry, it will fail. If, in leveraging social media, we fail to consider the essence of human interactions, we will fail. The technology layer is merely a veneer.

This is entirely a diversion from Smith's work - which itself is too extensive and detailed to summarize in a quick blog post - but I think speaks to the essence of the experience of re-reading it in the current day. I appreciate the irony of that.

What Your Marketing Says About Your Product

An observation: companies that provide consumer goods can be considered in the context of a few "classes" according to the value of their products and the way in which they market them - and it's possible to assess, without knowing anything at all about the product itself, the level of quality you can expect by the methods used to market it.

First-class companies that make first-class products barely need to market at all. Their products offer an excellent product at an excellent price, and they can be very successful without spending very much on advertising because they get repeat business and word-of-mouth from highly satisfied customers. Very few such companies exist, or perhaps that they don't come to mind readily because they don't have a strong media presence - but if you think about the brands you've owned for long periods of time, and for which you don't see much advertising, you can probably identify at least a handful.

Second-class companies that make second-class products that aren't at all bad, but have some deficiency in their value - either price or quality - that require a bit of extra effort to get customers to buy. I'd estimate that the majority of "good" companies are second-class, and sometimes by design: only one can be the very best, the rest are inferior by comparison, and generally require the customer to make acceptable compromises.

The communication of price and quality show the ways in which a company is second-rate: if the claim is to be "better than the leading brand" they offer a worse price but better quality, and "cheaper than the leading brand" is a better price but worse quality. Most customers have to accept this, and are willing to do so - any my sense is that "best" is highly subjective: each customer will decide for himself which company best suits his own needs, desires, and budget.

Companies that make second-class products market aggressively, but generally market honestly. They're very straightforward about the qualities they think the customer will prefer their product, and may communicate, if only by omission, those qualities in which they don't measure up.

Third-class companies that make second-class products that are not competitive in terms of quality and price. It's not merely a trade-off of one for the other, but a product that cannot be demonstrated to be the "best" at anything. It's on this level that companies begin to market by using details that are utterly unrelated to the price or benefit of the product.

Marketing of third-class products involve something other than their objective value to the consumer, and generally turn to psychologically needs that are not directly related to the use of the product: using their product will grant you social esteem or sex appeal, or five you the self-satisfaction of being mindful of the environment. It also tends to be dismissive of the benefits that most customers seek to obtain by purchasing better products of the same kind.

Many, though not necessarily all, "prestige" brands fall into the category of third-class products. Some are expensive because they are well-made, but others are expensive simply to give owners a sense of exclusivity, a non-functional "benefit" that is the hallmark of a third-class product.

A fourth-class company makes a product that people simply would not seek to buy on their own, and would likely not buy even if they heard it was available. Companies stoop to deceptive advertising and below-the-belt sales tactics to get the customer to make a purchase, even though they know it's a bad deal.

A good example of this class of product would be a company that uses a door-to-door sales force or telemarketers, though the practice of door-to-door sales is (thankfully) virtually extinct and telemarketing has been functionally illegalized. Another might be companies that rely on people to sell to their friends and acquaintances, which is also become rare. Companies that offer a "free" vacation or seminar are likely seeking to sell fourth-class products.

Arguably, there might be said to be a fifth-class product that can't be sold at all, but is forced upon a person who has no interest in purchasing it. Government services would fall into this category, as would any product that a person is compelled by law to purchase. I'm not sure that promotion of such a product could be classified as "marketing" at all - but then, the tactics used to sell fourth-class products might be so low as to be beneath consideration as well.

My sense is that a savvy consumer will recognize the marketing tactics and form an opinion of the product, without even considering the product itself, according to the way in which it is marketed. "Don't buy anything over the phone" is common wisdom, though in some cases it may be spread to suggest that withholding sales will discourage the tactic, it does recognize that goods that aren't sold in stores are not good enough to be sold in stores.

Could a company create a better impression of the quality of its products by using different marketing tactics? Possibly, but I don't have the sense it would be sustainable: companies gravitate toward sales tactics that work best to move their merchandise, and away from those that don't. If the seller of a third-rate product attempted to cut off their advertising in order to be perceived as being first-rate, chances are their sales would plummet and they would earn little success.

Could a company create a worse impression of the quality of its products by using a different marketing tactic? My sense is this is more common, though I tend to doubt it is intentional. A second-class product could use fourth-class selling tactics, but it would likely damage their reputation with consumers who prefer second-class products, which would be an unwise decision.

I also expect that a company would need to adjust its tactics over time, if it let the quality of its product slip, or when competitors enter the market with better products. The position of a first-class company is probably very difficult to defend, and it may be an easier choice to cede leadership to someone else and seek to compete on a lower level. On the other hand, a third-class company might undergo a significant effort to improve the quality of the products, and rise to the second-class.

Above-the-Belt Salesmanship

I've been looking for a good reference on salesmanship, and not having much luck. In general, sales is regarded the greasy underbelly of the marketing profession - so much so that anyone who speaks about marketing tries desperately to avoid the topic, or uses euphemisms such as "promotion" for the practice of getting a prospect to take the last step toward making a purchase. So far, I've not had much luck in finding an author who keeps his punches above the belt.

And yes, that's rather a vulgar metaphor, but it suits the vulgarity I've seen in browsing a handful of books on the topic of sales, in both the sense of physical conflict and the specific act of hitting another person in the genitals.

The general tone of sales is combative. Some authors borrow, for a time, the more gentle language of marketing - helping a customer obtain a product that serves their needs, establishing a mutually beneficial relationship - but after a couple of chapters, and sometimes right away, the attitude changes to that of a mugger or a con-man: beating down a customer until they give you their money, or using deceit to get it out of them. The notion of mutual benefit is a veneer, thin to the point of transparency, to cover some very nasty practices.

And the specific metaphor of striking below the belt is entirely accurate. The "tips" and "tactics" are clearly intended to deceive the mark, who must be regarded as a "mark" rather than a "customer" in this kind of situation, or to exploit psychological vulnerabilities in order to move a product that is clearly inferior, not worth the price on its own (lack of) merit, or clearly a worse choice than alternatives. As such, the authors who write on the topic of sales degenerate quickly from high-minded talk of helping the customer to seeking the fastest and most effective way to overpower them, which as any self-defense expert will tell you, is a sharp attack below the belt - it's not honorable, but it works.

I'm reminded of an acquaintance in college who was on the wrestling team who, any time his sport was mentioned, compulsively defended himself against the kind of wrestling most people are familiar with. He'd say that he was involved in "Greco-Roman wrestling - not that [stuff] rednecks watch." But the metaphor doesn't quite fit, because what I've seen of salesmanship doesn't rise even to that level of respectability, and I never have seen a sport where the competitors simply face off in the ring and try to kick each other in the sack.

And so, I'm still searching for a good reference on salesmanship, but losing hope that I'll find a source that is worth studying. If anyone who stumbles across this post knows of one, use the "contact" link at the bottom right of the page and let me know.

Always On

I've uploaded reading notes from Brian Chen's Always On, a book about the impact that smart phones are having, and could potentially have in future, as a mobile communication devices that provides the user with the ability to be constantly connected to information, resources, and other people. Having just finished reading it, I'm not entirely sure that it was time well spent.

The author doesn't bring a broad perspective, or a deep one, or a particularly insightful one. The book skips along the surface of a handful of topics, revels in extended anecdotes and general observation, and ultimately fails to make much sense of things. It merely dredges up information and spits it at the reader in amorphous chunks, more like a series of blog entries with commentary on news clippings than a proper book. So in that sense, I don't think I've gained much by taking the time to read it.

But at the same time, even a bad book can be a good exercise - when an author barely scratches the surface, an interested reader seeks out additional information from other sources; when he makes a specious or statement, the reader must seek a more reliable source of information from other sources; when he makes a specious of obviously biased conclusion, the reader must seek the truth from other sources.

So in the end, reading this book was a worthwhile endeavor - though not for the sake of anything contained within it, but rather as an exercise in assessing the sufficiency and veracity of information and doing research to amend and augment its shortcomings.

I do wonder how many readers actually do such things - and worry that some might take whatever they read at face value and investigate no further. But then, that is a form of intellectual neglect that will ultimately avenge itself.