I have a big question for all my friends out there in the digital signage business. When you are designing a new primary product, do you design for the lowest price or the best value? My answer to that question would always be the best value, however, I have found that more often the lowest price wins, especially in the large projects.
I have been designing and developing products for several decades now but I am still surprised when a large end user makes a decision based solely on price. Even if they know the cheapest product will end up costing them 10-20% more over the life of the product. I know there may be other things that enter into the decision at times but I am speaking in general terms if everything else is equal.
When I started my career I was an engineer and a cost estimator. I learned that all prices were based on cost. Later when I was working on a marketing degree I learned that was not always true. One huge example was in the liquor industry. I learned about a test someone did at one of the major brands. The liquor company sold three different price levels of whiskey. I don’t remember the exact price but they were something like $10, $15 and $20 per fifth. As it turned out all three brands were exactly the same but they sold more of the $20 brand than the other two. That was because of the promotions and the perception the more expensive brand tasted better.
Everyone knows if a company is going to be successful their products have to be competitive, but, is price everything? If you are investing in stocks do you stay away from expensive stocks like Apple and invest in the cheaper stocks? I know several people that have done very well with Apple stock. If you are an end user what are you telling your suppliers when they learn you buy the lowest price only?