Wednesday, 23 April 2008

What ultimately pays is quality

Markets are full of competitions and a perpetual tug of war continues on who can have a better score in making their products more and more acceptable to customers to secure bigger profits. Normal strategy adopted by the dealers in this context is to fix up a bigger price tag with the idea that higher the cost higher the yield. This is something that sounds unrealistic.As current scenario reveals, modern age is not that much for cheaper rates, they are for a quality product. It doesn't construe that a dealer may fix a higher rate to earn more profits. This has actually to be in a reverse order in the sense that price tags are moderately worked out with quality of the product as a basic factor. It's not long back that some stock market tycoons had to suffer a big setback as they fixed up their newly launched IPO at an exhorbitant price. It was Ambani's Reliance Power. The launch was a tremendous success apparently due to company's reputation and goodwill in the market but no sooner it had a take off it flopped. The reason being too ambitious a price for the shares. They took drastic measures including reduction in price by offering bonus shares but till date it has failed to win the confidence of the share traders mainly including common share holders. IPOs that followed were priced moderately and they worked well. Quality angle is not a phenomenon to be measured in isolation ignoring the price aspect. Quality is a primary factor no doubt but it has tobe coupled with a moderate price tag. Raising the price tag without a matching quality hardly works for a product and takers are not receptive to it. True, present day generation of buyers is not that much concerned with the rates but they do care to compare it with the quality factor which dominates their decisions on buying. As against this, if the rates are much cheaper and there is no quality, consumers don't accept it all. Quality is foremost and it is measured well by the customers if supported with a reasonable price tag.

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