In our last article, we discussed the longevity of a product affecting how that product is promoted and sold. Art Kleiner wrote an interesting article for Strategy&Business concerning a product’s death cycle. Kleiner laments the decline of product quality since the 1980s. As quality declined, so did durability, and so did expectations. Kleiner cites lower customer satisfaction ratings for Hewlitt-Packard (surprise, surprise) and even at GE. These results may be even more concerning knowing that consumer expectations are lower now. Now, we buy a $40 DVD player and expect it to break eventually. An interesting result of the cheaper products is repairs now cost more than a new DVD player. We’ve made it a disposable product.
Products are designed for obsoletion. Razor blades become dull, diets are fads, sports-themed video games are tied into the year they’re produced. The razor blades are a quality issue, the other two products do not cease to work, they are usually replaced by products that seem better. Kleiner points to experts who suggest the solution to the quality issue may arise through competition and innovation. Competition pushes companies to create better products and services in order to survive, but it may also tempt companies to allow commoditization and lower prices. Innovation creates “purchasing lust” within potential buyers. Innovation is the most viable alternative to cost cutting and quality reducing measures. It is the path traveled by diet fads, video games, Apple, JetBlue, and even by regional fast food chain Sonic Drive-Ins. As these price and quality wars rage, we’ll see if Tom Peters’ adage, “Innovate or die” is true. I have a feeling his proclamation will be the epitaph of many companies’ headstones.