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On Wednesday 16 March 2005 5:43 pm, John Chambers wrote: > I've seen the theory that there are two ways ?for ?a ?product ?to ?be > successful: ?1) ?high ?quality, ?2) ?a ?large ?marketing budget. ?The > important thing to realize is that there's no point to ?having ?both. > If you have either, the other won't increase your sales. It will only > increase your costs. Quality does not always translate into sales. In the mainframe days, IBM was known for their marketing excellence, but they also were known for the quality of their products, which were generally grossly overpriced and somewhat behind the competition in technology. We can debate their software (such as OS and DOS (mainframe)). They had the first successful virtual machine architecture, VM370. You could apply this analogy to automobiles when the very high quality Japanese cars started to hit the US market and the very low quality Chrysler, Ford and GM products started to lose a lot of market share. But, I don't think that quality and marketing budgets are necessarily more expensive and mutually exclusive. > This has been presented as the explanation behind the low quality ?of > market leaders in many fields, and computers are often the very first > example. ?Bill Gates leverages his IBM connections to get a ?huge ?ad > budget ?for ?his ?software. ? Given that budget, quality software was > pointless. Gates "leveraged" his contracts with IBM until Microsoft broke with IBM. But, we also must give Bill Gates a lot of credit in that he was one of the few people who believed in desktop computers in the 1970s when the MITS Altair was being developed. He and a few others also saw that shrinkwrapping software products and selling them essentially as groceries in volume was the future. His (Microsoft's) business practices once they became the market leader were by-the-book monopolistic. He looked at what John D. Rockefeller did with the oil industry and effectively did similar things. But, back to quality and marketing. The lack of quality is also expensive. In the short term, it increases support costs. In software, if a design flaw is caught early in development, then it can be corrected relatively inexpensively. If it ships and that flaw is discovered later on, the cost of fixing it might be very high. Additionally, poor quality products over a period of time will counteract that marketing budget as Detroit discovered. Remember the "planned obsolescence" of the 1960s and early 1970s. Today, it is very difficult to look at a car and determine what year model it is, and Detroit cars are of a much higher quality than they were. -- Jerry Feldman <gerald.feldman at hp.com> Partner Technology Access Center (contractor) (PTAC-MA) Hewlett-Packard Co. 550 King Street LKG2a-X2 Littleton, Ma. 01460 (978)506-5243
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