Price Increases – Determining Quality vs Poor Quality Compenisation

When shopping for a new product or service (P/S) and unfamiliar with the various brands offering them, a higher price can mean higher quality, or it can represent a compensation for having a bad P/S.

By offering a bad P/S a company must stay in business by relying on customers willing to tolerate the poor quality and higher prices, which makes up for a lower volume of sales overall, yet nets to the same income a good quality company with lower prices can earn.

As a consumer, unless quality is obvious from first glance, the only way to determine which you’re dealing with is find feedback from previously existing customers.

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