On Mon, 02 Jul 2007 12:24:27 -0500, dpb wrote:

Frank Boettcher wrote:
On Mon, 02 Jul 2007 09:14:47 -0500, dpb wrote:

Swingman wrote:
...

It's pretty simple in this age of corporate greed ...
I submit "corporate greed" is simply a reflection of the consumer
choosing price over quality in the most part...


I would respectfully disagree. In many, I would say most, cases
corporate greed is the driver to decisions that will reduce the
quality of the product when in fact there is perfectly good demand and
profit in the higher quality product. It is not the goal of the
corporation to reduce the quality, simply the outcome. The goal is to
make ten more points of profit margin because, you the consumer, don't
know any better anyway. In many cases, the consumer does not get a
choice or the higher end choice becomes harder and harder to find.

And the big retailers are partners in this effort. They tell the
manufacturer's brand managers, hey you get it from China at a dirt
cheap price or you will lose your shelf space, and we'll develop our
own store brand and get it from China ourselves.

It's true corporations are motivated to improve profit margins -- that's
their job.

Their job is to do the will of the owners. If the owners by weight
are investors who are mostly interested in reasonable growth, dividend
income, and long term continuity, then what they do by risking that
for quick profits is a legal crime. It is done because their personal
compensation is based stock appreciation in the short term.

As one who lived through the transition of a company from a
profitable, highly respected entity with products that were
considered benchmark in their industry to one that put all that at
risk in a mad dash to China, I can speak from experience.

Did they do the will of the owners? The stock, at the end of this
period, lost 50% of its value as a result of this strategy and the
company had to be sold at a significant discount.

Did the decision makers suffer from those decisions. Nope, they made
their money before the stock dropped by collecting grants, bonuses,
and exercising options that appreciated prior to the investing
community figuring out where it was going. All but one are gone, but
all left wealthy.

Frank




Unfortunately, the success of the mass retailers isn't owing to their
profit margin, it's that the customer has gone there and selected price
as their dominant factor in choice.

Small numbers of consumers (relatively, and I consider myself one of
them and can count on the fingers of one hand the numbers of time I have
been in the Super-Center in the last year) will select on the basis of
other reasons but, for the most part, there simply aren't enough of them
(high-end consumers) to support them (merchandisers).

Consider how often do you go to the Borg for a common item because it is
10 cents cheaper than the "real" lumber yard? Yet expect the yard to
have all the "good stuff" that the Borg doesn't carry? Just can't work
that way. (And that's not meant to be specifically "you personally",
but as an "editorial you" because you can certainly recognize the trait
as being widespread).