HTRN wrote: ↑
Fri Dec 27, 2019 12:03 pm
Cost. When costs go up, the manufacturer has 3 options - cheapen the product, reduce the volume at the same price point, or increase prices. Price has a major psychological effect, and considering how much the cost of many things has gone up due to people monkeying with the economy, options 1 and 2 are the most common solutions.
Well said. (Insert the thread-jack smiley here).
I use a related example in my classes when we're discussing the (product) category life cycle. Company (let's call 'em Engulf & Devour) introduces a differentiated product, say a lawnmower. It's objectively and demonstrably different and better than competing products in ways that matter to customers, so those willing and able to do so pay more for it.
Alas, there is no physical product that will not be imitated successfully given enough time. The product's margin of superiority shrinks and Engulf & Devour's product starts to face price pressure from them nasssty competitors, we hates them precious we does. In the effort to preserve margin, E&D might substitute a cheaper component somewhere (alternatively, a supplier stops supplying for whatever reason). Now the first time you do that the overall quality of the product might not suffer. Maybe not the second either, but the third? The fourth?
And that's how you get a phenomenon like this: Say you shear a rear axle pin on your 14-year-old E&D lawnmower along about 2012, so you look up a local E&D authorized dealer and go get an axle pin and a couple of rear wheels while you're at it. Counterman, who's obviously been there and done that, asks you what model you have, and how old it is.
You provide the model and tell him it's 14 years old, and he says, "Hang on to it. The old ones are better."
That's how and why it happens. (We did hang on to it, until 2016 when we moved away -- it was a Honda mower, and when we bought a house back here near Lake Erie and needed a mower in the spring of '18 we bought a mower with a Honda motor -- Briggs & Stratton still build good motors, but I've had better experience with Honda).