By Delivering What Matters Most
By Patrick Barwise and Sean Meehan
Harvard Business School Press (www.hbpress.org)
240 pp.; $24.95
How often have you heard someone in the auto industry say, "Quality is the price of entry"? How many times have you read of still another product recall of hundreds of thousands of vehicles because of some flaw? Is there something disconnected here?
It almost seems as though there is the notion that by assuming "Quality is the price of entry," quality is a given. Yet that assumption is unwarranted in many cases. The consequence of this is that the companies often making proclamations that go beyond the table stakes are losing customers to those firms actually providing quality products. This is a fundamental point made by two professors, Barwise at the London Business School and Meehan at IMD in Lausanne, Switzerland, in Simply Better. Customers want the basics, the authors argue, in effect: "Contrary to much conventional wisdom, buyers rarely look for uniqueness. Price, availability, and familiarity often matter a lot." This is not to say that people don't want things that are superior. But they've found that some companies, in efforts to devise their "unique selling proposition," forsake what they call "generic category benefits." Like quality.
Want an example that drives the point home? "Although the brand leaves some 'gear-heads' cool, more than six million car buyers around the globe disagree." The brand in question is Toyota, which the authors use as an example of a company that does it simply better. Toyota is derided by some for creating appliances, what is the percentage of people who buy cars who aren't interested in quality, reliability and durability (QRD)? (And how many cars and trucks does a company sell when it has QRD systematized and then adds stylish design?)
But don't think that providing what customers really value is a simple thing to do: "Doing so is often harder work than adding a unique, trivial differentiator (e.g., making the toothpaste pink) but is usually the only way to create shareholder value through differentiation, as opposed to low price." The pink toothpaste or the fancy rear fascia may seem to be the thing, but what do you spend your money on: flash or substance?--GSV
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|Publication:||Automotive Design & Production|
|Article Type:||Book Review|
|Date:||Jan 1, 2005|
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