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Posted: June 01, 2009

Rundles wrap-up: Be wary of cheap

Businesses ought to resist trend of sacrificing quality in order to offer more quantity

Jeff Rundles

When I was in college at the University of Denver in the 1970s, my friends and I liked to enjoy a few beers. Then a few more. And a few more after that. But, being the college students we were, and on budgets and all, we had a “quantity versus quality” point of view.

At the time, a case of Coors could be had for $4.99, including tax, which sounds like a good price, but in reality was the equivalent of the $20-plus a case Rocky Mountain Spring Water goes for now. So to supplement our quantity, and to stretch our meager resources, we got a case of good Coors for round one, then bought a generic, awful beer called Buckhorn at about $2 a case to carry us through whatever event we were commemorating, like Friday, or Tuesday.

Whatever was left of the money we pooled would go to Jack in the Box or some other fast-food establishment that made up in quantity what it lacked in quality.

We didn’t think of it as “value;” we were being “cheap.” We had to.

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That’s why I am currently wondering about the explosion of “value” in our economically distressed society. There’s a burst of popularity of 99-cent meals at the weaker fast-food outlets, and value meals at the next level, like the $5 foot-long subs at Subway and the $4 torpedo sub at Quizno’s. Then I read a quote from the CEO of the new Smashburger chain that its typical $8 meal tab was being boosted by the people downsizing their restaurant budget from Chili’s and Applebee’s. 

Then I see where Americans are reporting that fewer will take vacations this year, and that of those who will travel, more will stay with friends and family, more will take shorter in-state trips, and that some are simply just going to spend more time in the backyard. In response the travel deals out there are amazing, especially the ones pitched by the marginal players.

I have also come across not a few people who are selling their homes, or rather attempting to sell them in this down economy, and the typical comment as to why is “downsizing.”  My guess is they are doing this so they can maintain the quantity of the other things in their lives. Like the increase in business travelers flying coach as opposed to business class or first class; maintaining quantity versus quality.

What strikes me about all this is an attitude to get more, or at least to stay level, out of less. There seems to be a pervasive attitude to maintain the quantity of the things in our lives at the expense of the quality. Do as much, have as much, get as much, reach out as much, but do it all, well, cheaper.

My advice to business people is to be wary of this movement. Everywhere I go, in almost every business scheme I see, there is a discount, a new packaged pricing mentality, all seemingly designed to maintain market share at the expense of profit for now. But it is quantity at the expense of quality. The brands I see, the brands I know, are lowering my expectations of them in an effort to maintain me as a customer for now.

I don’t think this will last very long. I think people right now are in panic mode, but they won’t feel like this forever. Soon, they will begin to chip away at the quantity of the things in their lives, and return to choosing quality in fewer things, and those businesses that opted out – those that cheapened their offerings to maintain numbers – will hurt their reputations and have difficulty climbing back up as the economy improves.

I heard someone say recently that ignorance is temporary while stupid is forever. My college drinking buddies and I weren’t stupid; we were ignorant. We moved on to a more reasoned way of living with much less imbibing of much finer stuff.

When this is over, will your brand be Buckhorn or Coors? 

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Jeff Rundles is a former editor of ColoradoBiz and a regular columnist. Email him at jrundles@cobizmag.com.

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Readers Respond

I agree with the general argument here. Although we're certainly in favour of advertising discount goods, I think it's important to remember that consumers want quality products at low prices. Cheap prices without the quality won't be successful. By Discount Vouchers on 2010 01 18
Dear Jeff, I have been in advertising and sale for over 30 years and I think there has been a profound change in our consumer society from this current recession. I think the new mind set is live below your means, no more debt, no more credit cards, if you don't have the cash, don't but It and always buy used rather than new. Consumers want value for there dollar, and would rather wait to buy something than put the purchase on a credit card. The bottom line is I see Whole Foood customers shopping Wal Mart. The change in consumer behavior has changed forever. My Deepest Thanks By allan jahnke on 2009 06 15

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