Thoughts from altitude
On my flight back I was trying to avoid DBT, deep brain thrombosis, and thought back to my recent comments on Russian business practices opposed to western nations where you have ‘freedom of choice’ and the ability to ‘vote with your feet’ if you didn’t like a particular service or product. It is often expressed as such a simple and straightforward equation where the consumer is all powerful and competition a virtue in a free market economy. I may have been affected by a lack of oxygen and began to consider whether the free market is so pure and virtuous. Some practices seem to run counter intuitive to the rhetoric of freedom of choice and free markets. A few consumer models came quickly to mind.
Cajole the consumer
Choice is slavery. People it seem are suffering from consumer fatigue and don’t want more choices they often want less and testament to this is the huge popularity of multinational food outlets where menus are stripped back to a few variables. People view these places as safe havens in a world where even buying a toaster can require a three score choice. Look at the huge recent popularity of multinational coffee outlets. Most people know the Italians have been making superb coffee in Australia since the fifties and sixties yet the coffee phenomena of Gloria Jeans and Starbucks to name the two leading multinationals is not about coffee it is about a formulae. People like these places because they don’t require negotiation and the formulae is replicated from Pitt Street, a shopping mall in Albury to Tenth Avenue in New York. It is easy, safe and non confronting. You know the routine, you know where things are and you know how much it is all going to cost when you walk out. Many people it seems are happy to surrender more choice and run for the sanctuary of sameness. Freedom of choice can be intimidating.
Confound the consumer
Another interesting deviation from the free market is what I call the confound the consumer principle and perhaps the best example of this is comes from the communication carriers, particularly mobile phone companies. You see, what all these carriers avoid like the plague is for their costumers to actually know what there services costs are on a unit by unit basis. Presumably this makes it far too easy to judge one product against another. Imagine that, imagine being about to actually know on a unit by unit basis what one carrier costs against another. Unfortunately the actual price is an amalgam of the phone contract, the time of day, the day of the week, the carrier of the other person, what other services are bundled together and so on. It seems these carrier do everything they can to avoid the scrutiny of a true free market.
Capture the consumer
It seems most consumerables require period replacement of parts or servicing. Manufactures long ago realised they could make just as much out of after market sales as they could with new sales and if their product are not breaking down or wearing out fast enough they engage an engineer to ensure periodic failure and breakdown. Don’t laugh it’s true. These engineers probably went to university believing they were studying to design products but were really gaining the tools for deception. Some manufactures are worse than others. A pet hate of mine and a good example of this is the price of printer inks and bait marketing of the actual printers. Here’s an example, the Lexmark Z617 comes at a steal at just $44. Take it home and plug it in and before too long you’ll be heading back to the store for a cartridge refill at just, $53. Got you haven’t they! The manufacturers are so keen to pull you into their lucrative consumerables stream that even at the time of you walking out the store with the new printer tucked under your arm the cartridge installed in the printer is only filled to around 30% capacity.
I thought it was important to balance my criticism of the Russian costumer service principle of take it or leave it earlier expressed. The first is an ‘in your face’ approach and the later can be a stalking, sneak their hands in your pocket approach and not quite as pure as the driven snow. .
Cajole the consumer
Choice is slavery. People it seem are suffering from consumer fatigue and don’t want more choices they often want less and testament to this is the huge popularity of multinational food outlets where menus are stripped back to a few variables. People view these places as safe havens in a world where even buying a toaster can require a three score choice. Look at the huge recent popularity of multinational coffee outlets. Most people know the Italians have been making superb coffee in Australia since the fifties and sixties yet the coffee phenomena of Gloria Jeans and Starbucks to name the two leading multinationals is not about coffee it is about a formulae. People like these places because they don’t require negotiation and the formulae is replicated from Pitt Street, a shopping mall in Albury to Tenth Avenue in New York. It is easy, safe and non confronting. You know the routine, you know where things are and you know how much it is all going to cost when you walk out. Many people it seems are happy to surrender more choice and run for the sanctuary of sameness. Freedom of choice can be intimidating.
Confound the consumer
Another interesting deviation from the free market is what I call the confound the consumer principle and perhaps the best example of this is comes from the communication carriers, particularly mobile phone companies. You see, what all these carriers avoid like the plague is for their costumers to actually know what there services costs are on a unit by unit basis. Presumably this makes it far too easy to judge one product against another. Imagine that, imagine being about to actually know on a unit by unit basis what one carrier costs against another. Unfortunately the actual price is an amalgam of the phone contract, the time of day, the day of the week, the carrier of the other person, what other services are bundled together and so on. It seems these carrier do everything they can to avoid the scrutiny of a true free market.
Capture the consumer
It seems most consumerables require period replacement of parts or servicing. Manufactures long ago realised they could make just as much out of after market sales as they could with new sales and if their product are not breaking down or wearing out fast enough they engage an engineer to ensure periodic failure and breakdown. Don’t laugh it’s true. These engineers probably went to university believing they were studying to design products but were really gaining the tools for deception. Some manufactures are worse than others. A pet hate of mine and a good example of this is the price of printer inks and bait marketing of the actual printers. Here’s an example, the Lexmark Z617 comes at a steal at just $44. Take it home and plug it in and before too long you’ll be heading back to the store for a cartridge refill at just, $53. Got you haven’t they! The manufacturers are so keen to pull you into their lucrative consumerables stream that even at the time of you walking out the store with the new printer tucked under your arm the cartridge installed in the printer is only filled to around 30% capacity.
I thought it was important to balance my criticism of the Russian costumer service principle of take it or leave it earlier expressed. The first is an ‘in your face’ approach and the later can be a stalking, sneak their hands in your pocket approach and not quite as pure as the driven snow. .
posted by transavante | 2:34 p.m.
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