Low price or High Quality?

[DayTrader]

What would attract you and make you decide to buy a product, price or quality? Would you buy a product that is cheaper but obviously with lower quality OR a high quality product that is priced higher than your budget?

[KyleXY]

Price should never be an issue if the quality of the product is high enough. Apple iPhone is proof of this concept. Quality for me

[Dave89]

Quality. The statement "you get what you pay for" is soo true. If you purchase a product solely based on the price, not only is the quality inferior but it won't last you as long. In my opinion it's worth paying the extra bucks, going with the quality product which will provide an overall greater consumer experience.

Dave

[rogercbryan]

What would attract you and make you decide to buy a product, price or quality? Would you buy a product that is cheaper but obviously with lower quality OR a high quality product that is priced higher than your budget?

Terrible question... If you are launching a product or service your goal should be to offer the best possible quality at the lowest possible price. This is how I started my business. Now five years later I've raised my prices as my reputation in the industry has grown.

[nicolebeckett]

Yes, you do get what you pay for. However, if you're just now launching your product, you need to combine low price with high quality. Once you've established yourself and given people a reason to pay you more, you can raise your prices.

[JKansas]

Haha no, you don't get what you pay for! Look at all the marketing hype out there. You get the value you percieve for what you pay for!

Your job is to provide a value to your customer. Your price is where the customer percieves it. There are many ways to do this. Price alone is the worst... You have walmart and family dollar killing on that. A general rule of thumb for small entrepreneurs is to never compete on price alone!

While most people on here say quality... most people on here have a business mindset. The general public loves cheap or walmart wouldnt spend millions on it's "roll back prices" campaign. But, the general public is aware of value.

The best way to do this is by offering a mix of price, service, and quality that makes the percieved value of your product the greatest. Say you start a pizza company and your pizza is average, but you perform a concert when you deliver yours... the percieved value is higher (I know, bad analogy..... but.... have you eaten at Cold Stone Creamery?!)

Think hole in the wall diner that everyone loves! Crap atmostphere made up for with great food. Think sirius radio added to cars... free software on computers.... a million examples of ways to add value through service and quality. I'm not saying you can charge $1500 for a decent pizza, but I am saying you can charge $4 for a single serving ice cream experience (vs. four dollars for an entire quart at the store).

[KyleXY]

I can generally agree with your assessment JKansas but as you said, it's tough for small businesses to compete on price. Chances are the OP isn't a walmart type competitor. So why bother even arguing that. What good will that do for the OP...

Having said that, quality is also a perceived value on both end. You're assuming quality is a one definition only. What you may consider quality I may consider crap. You do your best to try to tackle delivering the best value and trying to delivery "quality" the best way you know how.

The specific question was "low price" OR "high quality". With all else being equal, without digging much further, I would argue for me price is irrelevant most of the time and therefore quality is more important. As you said, people are willing to spend more, if they perceive it as being worth more aka your ice cream example. If I had to choose order of focus between the two, quality first, price second.

[Southern_Lenders]

Yes, you do get what you pay for. However, if you're just now launching your product, you need to combine low price with high quality. Once you've established yourself and given people a reason to pay you more, you can raise your prices.

This doesn't make much sense. There is a reason why a KIA Forte is priced at 13.6 while a standard Mercedes C-Class starts at 33 grand. You will never see a new Benz selling for 13.6. Low price, high quality?... give me an example please, and I'll probably find a way to trump you.

[JKansas]

I can generally agree with your assessment JKansas but as you said, it's tough for small businesses to compete on price. Chances are the OP isn't a walmart type competitor. So why bother even arguing that. What good will that do for the OP...

Having said that, quality is also a perceived value on both end. You're assuming quality is a one definition only. What you may consider quality I may consider crap. You do your best to try to tackle delivering the best value and trying to delivery "quality" the best way you know how.

The specific question was "low price" OR "high quality". With all else being equal, without digging much further, I would argue for me price is irrelevant most of the time and therefore quality is more important. As you said, people are willing to spend more, if they perceive it as being worth more aka your ice cream example. If I had to choose order of focus between the two, quality first, price second.

I suppose I was quietly agreeing with RogercBryan... Terrible question if that black and white. I assumed he was making a mistake that a lot of people made when I reviewed business plans and i was trying to explain why. Price is not the best product strategy. I don't think it hurts anyone to read an explanation of an opinion vs the statement of an opinion. I repeated walmart because they are the biggest example. But there are big box stores across most markets. I also assumed with a question like this he had a target market. Target markets tend to have similar perceptions about quality. For instance, A car guy knows that Southern_Lender's comparison of a Mercedes C class to a Kia Forte.... is worthless at best. A better comparison would be the Hyundai Genesis Coupe to a Mercedes C class or the sedan to an E-class.

I dont see how it helps to read the question that black and white as the real world is not that black and white. In most markets you have low, mid, and high level products... and usually an elite niche market. Most people go for the mid market. Not all of us are that way and I would argue the market doesnt buy that way. They do however tend to buy the best valued product in that market. That is usually a combination of mid level price with percieved high quality. Not one or the other.

[JKansas]

This doesn't make much sense. There is a reason why a KIA Forte is priced at 13.6 while a standard Mercedes C-Class starts at 33 grand. You will never see a new Benz selling for 13.6. Low price, high quality?... give me an example please, and I'll probably find a way to trump you.

Where did your quote go about people with standards paying an extra penny and people without standards shopping with walmart?! In response, I disagree completely. What are you paying an extra penny for? Is it value? or because you can? I shop at three places for groceries. Once every couple of weeks I go to walmart, buy toiletries and common things. I don't need service or atmosphere to buy deoderant and toothpaste! Kashi is cheaper at walmart and the same box at dillons or whole foods. Once a week I buy produce and meats from dillons. I feel their quality is better and their organic/produce section is better. Once or twice a week I go to a whole foods market. I buy bulk things, almods, tea, etc... and whatever fresh foods look good. I eat well, and a lot more reasonably priced than people think. My mentioning of walmart is because they are the world leader in pricing and markets. Their logistics systems are amazing and ignoring that beacuse you're too good for Walmart is not very entrepreneurial.

P.S. In case you didnt read my response to kylexy, your car example is way off. I hope you didnt buy a c class soley because it's nicer than a kia forte...

[rogercbryan]

I see a lot of good points being made...

I guess what I was trying to say is that you need to strive for maximum quality in every regard if you are launching a new product or if you are buying a product (sorry I'm using supply side as it is easier for me to explain). The price however is not only correlated to the quality of your product. So the original question "Would you buy a product that is cheaper but obviously with lower quality OR a high quality product that is priced higher than your budget?" is a little vague. There are many variables that have to be considered to answer this question.

- What is the product? (If you are talking about a TV that is one thing... if you are talking about a car you have an entirely different price point)
- What is the reference point? (Two people standing next to each other may have different financial positions that will effect their decision)
- What is each persons level of perceived value? (Each person perceives value differently meaning that have different expectations)

From the supply side you would try to maximize value for your product and then place its price in accordance with competition and your financial needs. This makes price less relative to quality and more relative to your capabilities.

I hope this makes sense... If you were to ask a different question like "Would you buy a Sony 1080p for $999.95 or a Visio 1080p (of equal size) for $495.95?" Then we could answer your question.

I personally strive for highest value for my money. With that being said I have a Sony TV at home and a Visio in my office at work. I can't tell the difference between the two pictures...

[JKansas]

I personally strive for highest value for my money.

Exactly! Well said.

[Mark Atkinson]

Interesting topic.

At present, we are looking into manufacturing and marketing t shirts which have a very unique design. We are trying to match the quality of shirt we will provide to a price that people will be willing to pay for such a shirt.

I feel that there's a price level which is beyond what the majority of your target market will pay, regardless of how good the quality may be. It's important to understand the demand for your product and what people could expect to pay for it, and then provide as good a quality as you can to cater for customers in that price range.

[DerekS]

This doesn't make much sense. There is a reason why a KIA Forte is priced at 13.6 while a standard Mercedes C-Class starts at 33 grand. You will never see a new Benz selling for 13.6. Low price, high quality?... give me an example please, and I'll probably find a way to trump you.

A Mercedes Benz is a veblen good. People are willing to pay more because they PERCEIVE the quality to be higher (because of the name and the status associated with owning said vehicle.) German cars are, on average, the least reliable vehicles on the road. Of course, this introduces the semantics issue of what is considered the definition of "quality" and how that relates to the concept of value. Nonetheless, a Toyota Corolla could be considered "quality" at a low price, depending on the definition of the word. (Of course minus Toyota's "issues" as of late, which still only represent a minority of the Toyota produced vehicles on the road.)

[DayTrader]

Those are really good views about price and quality. Each has his own perception and preferences.

Not all high priced goods are of high quality. A lot of branded goods are priced very high, but their quality are the same as the unbranded ones. Like in clothing, a dress that is sold in flea market is cheap. But when that same dress is labeled and sold in stores, the price is automatically up.