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Economics Discuss Price and quality at the Political Forums; Has anyone ever noticed how little correlation--if any at all--there is between price and quality (and add features, in those ...

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Old 05-03-2020, 12:07 PM
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Default Price and quality

Has anyone ever noticed how little correlation--if any at all--there is between price and quality (and add features, in those instances in which that applies)?

As an example, the latest issue of Consumer Reports gives a slightly higher rating (92, vis-a-vis 90) to a single-dose dishwasher detergent that costs just 10 cents per load, versus one that costs 34 cents per load.

And no, cost is not taken into account when giving these ratings. Just quality.

By the way, this is not a one-off sort of thing. Just about every month, CR has something of the same sort.

Of course, if the comparison is within the same brand, this principle is probably not applicable.

Where competing brands are concerned, however, the old saw about "getting what you pay for" does not seem to be correct.

Thoughts?
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Old 05-03-2020, 01:56 PM
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Default Re: Price and quality

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Originally Posted by pjohns View Post

Thoughts?
The good stuff always costs more regardless of most any products.....

Good steaks, good fish, good produce etc....
Good cars, good trucks cost more....

Same with clothes and houses, you name it.....
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Old 05-04-2020, 07:02 AM
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Default Re: Price and quality

I recall an example of this a professor in one my marketing classes told. When Cadillac first introduced one of their models (the Eldorado I believe it was), it had very poor sales despite being priced to compete with other high end models from other manufacturers. Cadillac had put a lot of quality features in the car that should have appealed, but somehow did not.

After a year or so, Cadillac considered ending the production of the car but then decided to try one more thing. They RAISED the price significantly for the next model year. After that, they became one of their best selling models.

The point of this was to demonstrate that price does not always equate to quality. Sometimes price is simply a marketing gimmick.

Another example that I can tell from personal experience is in the food processing industry. One summer while at home from college, I took a job with a local egg processing plant. For those not familiar, these plants take in eggs from the egg farmers, clean them, check them for defects (a process known as candling) sort and package them. In the plant I was in, they did this all with 2 very large machines.

We would work off of an orders list. For example IGA my have orders so many cases of medium, large, extra large and so on all packaged in their IGA egg cartons. This was the case for all of the orders. So as the machine ran, my job was to keep track of how many cases of each "brand" was needed, and when to switch out the egg cartons to package eggs for the next customer.

There was a brand of egg that was marketed as a Low Calorie egg that sold for about twice what the store brand sold for. What they were selling was a egged sized as what we could consider a medium egg. The claim was that these eggs are only 40 calories. However, they were simply a medium egg just put into a different carton. There was NO extra processing or sorting or anything else. That same egg could have gone into an IGA medium carton just was well as this low calorie brand.

My point is, it is best to understand the differences in products with price being one of them. When you go to WalMart or Kroger or any other chain and you see their products sitting next to the name brands, ask yourself "Did WalMart actually grow, process and can this can of beans?" No, they bought them from the food processor just like Green Giant did. They just put a different wrapper on the can.
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Old 05-04-2020, 08:29 AM
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Default Re: Price and quality

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Originally Posted by GetAClue View Post
I recall an example of this a professor in one my marketing classes told. When Cadillac first introduced one of their models (the Eldorado I believe it was), it had very poor sales despite being priced to compete with other high end models from other manufacturers. Cadillac had put a lot of quality features in the car that should have appealed, but somehow did not.

After a year or so, Cadillac considered ending the production of the car but then decided to try one more thing. They RAISED the price significantly for the next model year. After that, they became one of their best selling models.

The point of this was to demonstrate that price does not always equate to quality. Sometimes price is simply a marketing gimmick.

Another example that I can tell from personal experience is in the food processing industry. One summer while at home from college, I took a job with a local egg processing plant. For those not familiar, these plants take in eggs from the egg farmers, clean them, check them for defects (a process known as candling) sort and package them. In the plant I was in, they did this all with 2 very large machines.

We would work off of an orders list. For example IGA my have orders so many cases of medium, large, extra large and so on all packaged in their IGA egg cartons. This was the case for all of the orders. So as the machine ran, my job was to keep track of how many cases of each "brand" was needed, and when to switch out the egg cartons to package eggs for the next customer.

There was a brand of egg that was marketed as a Low Calorie egg that sold for about twice what the store brand sold for. What they were selling was a egged sized as what we could consider a medium egg. The claim was that these eggs are only 40 calories. However, they were simply a medium egg just put into a different carton. There was NO extra processing or sorting or anything else. That same egg could have gone into an IGA medium carton just was well as this low calorie brand.

My point is, it is best to understand the differences in products with price being one of them. When you go to WalMart or Kroger or any other chain and you see their products sitting next to the name brands, ask yourself "Did WalMart actually grow, process and can this can of beans?" No, they bought them from the food processor just like Green Giant did. They just put a different wrapper on the can.
That's a 'not always' statement, though I agree with a majority of the rest of your post.

Some products are 'graded' based on size, color, ripeness, formation, etc. Some in-store brands will purchase the lower graded goods, and sell them under their brand label. The source may be the same, but it's like the difference between first sold press of olives for oil, and the second cold press.

I worked for a company waaaay back when, that purchased reject polyester spun yarns, normally trashed, and the created a process to re-spin those yarns into first quality. They made a killing in the market, until another company found a less stringent process to take reject yarn, and re-spin it into second, but usable quality. Manufacturers paid less than first quality to make material out of it, but the end user could still get higher prices for the finished product, and increase their bottom line, and the consumer would never know....
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Old 05-04-2020, 12:05 PM
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Default Re: Price and quality

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Originally Posted by GottaGo View Post
That's a 'not always' statement, though I agree with a majority of the rest of your post.

Some products are 'graded' based on size, color, ripeness, formation, etc. Some in-store brands will purchase the lower graded goods, and sell them under their brand label. The source may be the same, but it's like the difference between first sold press of olives for oil, and the second cold press.

I worked for a company waaaay back when, that purchased reject polyester spun yarns, normally trashed, and the created a process to re-spin those yarns into first quality. They made a killing in the market, until another company found a less stringent process to take reject yarn, and re-spin it into second, but usable quality. Manufacturers paid less than first quality to make material out of it, but the end user could still get higher prices for the finished product, and increase their bottom line, and the consumer would never know....
Yeah, I get that also. There is also different "recipes" used between brands as well. My point was that the ingredients all come from the same places.
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Old 05-04-2020, 12:47 PM
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Default Re: Price and quality

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Originally Posted by GetAClue View Post
We would work off of an orders list. For example IGA my have orders so many cases of medium, large, extra large and so on all packaged in their IGA egg cartons. This was the case for all of the orders. So as the machine ran, my job was to keep track of how many cases of each "brand" was needed, and when to switch out the egg cartons to package eggs for the next customer.
This is very similar to an experience I had, more than 50 years ago: I was working at a processing plant, for Manpower. That plant produced about 36 different "brands" of peanut butter. (I can remember only one brand's name: "Big Chief.")

But all the brands were identical; we simply ended a "run," and switched labels. (Yes, we did both a "chunky" run and a "creamy" run for each brand; but the chunky for one was identical to the chunky for another, whereas the creamy for one was identical to the creamy for another.)
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Old 05-04-2020, 07:55 PM
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Default Re: Price and quality

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Originally Posted by GetAClue View Post
Yeah, I get that also. There is also different "recipes" used between brands as well. My point was that the ingredients all come from the same places.
Not sure it's true all the ingredients come from the same places. The smaller brands use different farms from the corporate giants.

The big retailers contract with manufacturers to produce some of their house branded products.

https://hip2save.com/tips/store-bran...y-name-brands/

Not all house brands are as good as the name brands but they are almost always cheaper.
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Old 05-04-2020, 10:24 PM
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Default Re: Price and quality

Quality is a very relative term.

I'd like to see some definitions from all you guys who complain about "quality."

Is a Ford a lower quality vehicle than a Cadillac? In truth it depends on one's definition of quality. Or more precisely, one's perspective.

The best definition I ever heard was from Jack Taylor. Founder of Enterprise Leasing/Rental. In his opinion what you paid for the Ford verses what you paid for the Cadillac is key to the answer. And by his definition, neither the Ford or the Caddy is higher in "Quality."

The answer is, and I quote Jack, "the delivery of expectations."
You should get what you pay for. If you paid High, the quality should meet the expectations assumed for paying a high price. If you bought the cheapest item don't be disappointed. But in every case the customer finds the quality acceptable if they received the value they expected. No more, No less than that.

The price charged often has very little to do with the "value" of the product or service. However, it often has everything to do with one's expectations.
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Old 05-05-2020, 06:49 AM
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Default Re: Price and quality

~ “The Bitterness of Poor Quality Remains Long After the Sweetness of Low Price is Forgotten”
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Old 05-05-2020, 12:02 PM
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Default Re: Price and quality

I have had architects specify certain things, from certain companies that buy from my manufacturers, rebrand the item, than mark it up 400-500% The re-brand company was able to smooze the Architect into not allowing any other brand to be used, which in turn forces the owner to pay these stupid prices.

I don't play the game, I offer alternates for the exact same item, at a reasonable price. Sometimes they don't take it, and they force me to pay more, and charge them more.

Some people would RATHER pay 4 times more for the same item, I really don't know why.
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