QUALITY IS NO LONGER MARKETABLE
I know this may be unsettling for some, but the constant marketing of quality has become irrelevant.
Manufacturing has evolved over the years. In the 70’s America’s automotive industry was almost destroyed by their simple ignorance of what consumers wanted. Previously all the consumer wanted was a stylish, powerful mode of transportation. The hot rod culture was created. American’s were willing to buy expensive unreliable machines if they looked good and had large amounts of horse power.
Then it all changed in 1973. OAPEC placed an embargo on the U.S. oil supply and oil quadrupled in price. Lines at the gas stations formed. Incomes were diminished due to their cost of transportation. Mass transit boomed. The powerful, sleek machines were no longer affordable to drive. The American automotive business model failed.
The solution came in the form of small imported cars that offered better gas mileage. Enter Toyota, Datsun (aka. Nissan) and others. These smaller vehicles offered better gas mileage, allowing the American consumer a solution to their transportation needs, but also offered something else. Quality.
The imported machines were more reliable and cost effective. They were not able to provide the horsepower of previous American made machines but could offer a more reliable and economical transportation solution. The playing field changed.
The unusual quality that was provided did not originate in Japan. In fact, it originated with the American W. Edwards Deming an American engineer and statistician who when working with the post-World War 2 Japanese manufacturers created a quality-based business model. His goal was to improve the quality of all manufacturing worldwide. From this other quality concepts grew, including Total Quality Management (TQM), Just in Time Manufacturing (JIT), Six Sigma process monitoring (6S), and others. He was successful beyond anyone’s expectations. Japanese imported “junk” became the thing of legend. Honda, Toyota, Nissan and other foreign automobile manufacturers now dominate the market. General Motors went bankrupt. Ford is halting the production of most sedans. Chrysler is on the chopping block. It goes on and on.
Then another problem arose. The quality of American products also increased. The American manufacturers made “Quality job one” (FordTM). Not only in the automotive industry but all industries. Never in the history of man kind has the quality of products been so high. Companies that were once considered “mom and pop” operations are producing products with a quality level that excessed anything imaginable just a few decades ago. American manufacturing, as well as the rest of the world, learned their lesson.
Then they married the idea. The quality in products in the U.S. as well as other countries improved. Consumers no longer had to worry about their purchases providing long term value to their investment. Automobiles that were considered obsolete at 50k miles were expected to operate for another 200 thousand or more (I personally expect my cars to last at least 300k miles). Televisions were expected to operate for no less than ten years. Computers had to operate until their technology was obsolete by newer technologies and never fail. It became the norm.
“How do you assign prices in a world where quality is perfect?”
Hiroshi Yamauchi, Nintendo
However, businesses continue to market their quality instead of their most important asset. Innovation and timing. Innovation is key to many industries. Electronics, automation, medical industries are just a few. However, innovation is short lived. Your technology is being reversed engineered as you read this blog. This could be by American companies or foreign companies but relying on technology alone is expensive to defend (at best) and dangerous at worse. Quality is expected. If you are not delivering a quality product then you are not legitimate, and no one can recover the market except for your competitors.
OK. Quality is expected. Innovation is shorted lived. So how do you compete?
TIMING TO MARKET
If you have read any of my previous blogs, this point will seem familiar. In my opinion, timing to market is the most important trait of any American manufacturer. Every business is racing to produce the best product possible at the best price, however being the first to market has many more advantages.
Again, you must naturally produce a quality product, but you must be the first to market to capture the market segment.
Consider these questions:
1. Who invented the first fully functional commercial web search engine?
2. Who developed the pay per click marketing technology?
3. Who invented the web-based video playback system?
4. Who invented the first disc operating system (DOS)?
How confident are you in your answers? Let’s test your knowledge.
Did you think Google created the first fully functional web search engine? They didn’t. It was invented by Alan Emtage, a student at McGill University in Montreal in 1990. Don’t be surprised if you don’t recognize his name. Unfortunately, most geniuses are lost in the annals of time. Google repackaged and improved the concept for the masses and released their product to market FAST. That is why they dominate the industry. Even Microsoft with their juggernaut status is having a hard time catching up. Time to market wins.
Did Google invent the pay per click business model? No. The first PPC system was called Planet Oasis. It was developed by Ark Interface II, a division of Packard Bell NEC computers. If you don’t recognize the names again, don’t feel bad. Again, time to market wins.
OK, so who invented the web-based video playback business model? Netflix? YouTube? Google? No. GTE started the technology in 1990. Are you currently subscribing to a GTE video service? No, because they no longer exist.
Who invented the first disc operating system (DOS) for personal computers? It must be Microsoft, right? This is what they are known for! No. It was developed by Tim Paterson of Seattle Computer Products. Bill Gates purchased the product and, after several modifications, resold it to IBM. Microsoft was born.
Now does being the first to market guarantee success? No, it does not. If you are unable to meet demand, support your customers and continually improve the product you will be beaten out by competition. However, being the first to “punch” gives you a very strong start. Waiting on perfection only allows customers to buy from somewhere else.
Tesla is a good current example. Are their automobiles the best? No, they have issues that are being worked out. Are they the cheapest? No, there are other competitors offering a lower priced option. So, what is their marketing edge? They were the first to market in a major way. They released the best product that they had at the time as quickly as possible and now dominate the market. Yes, it is true that they are under pressure from competitors now, however their name is what we associated with electric automobiles. If they continue to improve their products and pricing they will be the leader for decades. This is a potential success story. Now how about a failure.
Have you ever heard of a company called Harley Davidson? They manufacture motorcycles. They have had their ups and downs over the years from terrible management decisions that sent their production overseas to good decisions to bring the company back to the US. They sell approximately $5 billion dollars in motorcycle and accessories every year. Where they the first to market? No, this goes to Edward Butler in 1884. OK, so my theory fails. I don’t think so. When you think of Harley Davidson you don’t think of motorcycles. You think of a subculture. You image leather bound riders riding free on the highways of America. Harley Davidson was the first to market their culture. Other motorcycle manufacturers have tried to break into this market. The most notable, in my opinion, was the rebirth of Excelsior Henderson (EH) in 1993. EH was a major player during the early years of motorcycle production and produced thousands of motorcycles for use during the early twentieth century. When they were resurrected they were manufacturing motorcycles that by many standards were better than Harley Davidson and were even sold by Harley Davidson dealers. Why wait to order a Harley when you could drive off with an Excelsior Henderson today? Harley Davidson wasn’t the firs to produce a motor cycle for the masses. The were the first to introduce the motorcycle culture. Excelsior Henderson closed December 21, 1999. First to market wins again.
Define your market. Is it a new product? A new technology? A new culture or subculture? ·
Be the first to get into the market and do it in a major way. Don’t hold back! ·
Continuously improve your products features. ·
Stay in front of your customers to remind them you were first. ·
Offer accessories and expansions for your products to create a more expansive purchasing experience for your customers while creating back end sales for you. · STOP MARKETING QUALITY!
If you don’t have it everyone already knows, and if you do you are just like everyone else. Quality is expected. What is special about your business?
Office: 501-314-0840 Fax: 501-859-8381 Email: firstname.lastname@example.org Web: cenarkcontrols.com
Greg Shultz is the Principal Engineer with CenArk Controls, LLC. He has over thirty years of hands on experience in the design and implementation of automatic and semi-automatic systems in the US, Mexico, Europe and Asia. He can be contacted by calling the CenArk offices at 501-314-0840 (US) or via email at: email@example.com.