Quality or Quantity?

[cj]

Originally posted by PornoDoggy@Jan 27 2005, 02:08 AM
There is another factor in auto selection that I don't think you'll find in this industry - prestige. Cadillac could make a car every bit the equal of anyone - but it would not have the prestige of a Benz or BMW. With a car you're buying image.

This is a good point ... I was thinking today how this ties in - i was watching Oprah, and this woman had got herself into $92 000 debt buying brand label clothes ...

These companies produce their items in China, stick a tag on them and spend all their money on marketing to create the perception of quality. While the item is often a fairly average quality piece, the buyer thinks they are purchasing a lifestyle with their sweater/hat/car.

On these items, the price is almost what makes them 'prestige', and they market backwards from the price to the demographic who can (almost) afford it.

In reverse, JR's example of Wal-Mart - it is percieved as being really cheap, but people buy it because it is what it is ... moderate quality for a moderate price. I know many opranauts who shop at Ikea regularly ( recently I sorted my tool box and found 17 allen keys ).

I've been using the top fortune 500 companies as a test platform for my quality vs quantity theory 'a company can only do 1 well'.

This is last year's fortune 500 top 30 ....

1. Wal-Mart Stores Inc., Bentonville, Ark., 1, $258.681
2. Exxon Mobil Corp., Irving, Texas, 3, $213.199
3. General Motors Corp., Detroit, 2, $195.645
4. Ford Motor Co., Dearborn, Mich., 4, $164.496
5. General Electric Co., Fairfield, Conn., 5, $134.187
6. ChevronTexaco Corp., San Ramon, Calif., 7, $112.937
7. ConocoPhillips, Houston, 12, $99.468
8. Citigroup Inc., New York, 6, $94.713
9. International Business Machines Corp., Armonk, N.Y., 8, $89.131
10. American International Group, Inc., New York, 9, $81.300
11. Hewlett-Packard Co., Palo Alto, Calif., 14, $73.061
12. Verizon Communications Inc., New York, 10, $67.752
13. The Home Depot Inc., Atlanta, 13, $64.816
14. Berkshire Hathaway Inc., Omaha, 28, $63.859
15. Altria Group Inc., New York, 11, $60.704
16. McKesson Corp., San Francisco, 20, $57.129
17. Cardinal Health Inc., Dublin, Ohio, 19, $56.830
18. State Farm Insurance Cos., Bloomington, Ill., 21, $56.065
19. The Kroger Co., Cincinnati, 18, $53.791
20. Fannie Mae, Washington, D.C., 16, $53.767
21. The Boeing Co., Chicago, 15, $50.485
22. AmerisourceBergen Corp., Chesterbrook, Pa., 24, $49.657
23. Target Corp., Minneapolis, 25, $48.163
24. Bank of America Corp., Charlotte, N.C., 23, $48.065
25. Pfizer Inc., New York, 37, $45.950
26. J.P. Morgan Chase & Co., New York, 26, $44.363
27. Time Warner Inc., New York, 29, $43.877
28. The Procter & Gamble Co., Cincinnati, 31, $43.377
29. Costco Wholesale Corp., Issaquah, Wash., 33, $42.546
30. Johnson & Johnson, New Brunswick, N.J., 34, $41.862

Full List - http://www.usatoday.com/money/companies/20...-500-list_x.htm