Can you tell quality by the price?

While I was in Spain not long ago, I had some extra time on my hands so I went for a random walk.  Along the way I decided to go into a large department store, Cortes Ingles, just to see what people were buying.

As I wandered by way through the store, I saw a lot of designer labels that were familiar and many that weren’t.  In the men’s department I saw Hugo Boss and Ralph Lauren and Tommy Hilfinger (the denim collection).  But what about the brands that I didn’t recognize?  How would I know if they were good, if they were fashionable?  Would I have to rely on my own sense of style, the feel of the cloth, the quality of the stitching?  I don’t have confidence in my ability to judge those cues.  I looked for other cues, the designer brands on either side, the type of people who were looking through the clothes.  

Then I looked at the price tags.

It was a revelation.  

I felt more confident that I could spot the best clothes once I got a feeling for their pricing.  Consciously or not, I was taking price as my cue for quality and not the other way around.  Even if the quality was no better, the higher price made me feel more comfortable in judging the brands.  Like the old joke goes, “It better be good because it’s so goddam expensive.”

Is it a Value brand or just Cheap?

There’s a wonderful phrase in economics called the “Utility Curve”.  It’s how economists explain why you’ll pay extra to buy a diet coke at the corner deli when you could save fifty cents by walking two blocks to the Gristede’s supermarket.  The marginal utility of not walking 2 blocks is equal to the marginal utility of the closer soda.  Or some such mumbo-jumbo. 

Basically it’s a fancy term for making our irrational choices fit neatly into economic formulas.  One of my professors called it the Finagle Factor — the way to wiggle around the stuff you can’t figure out.

Well, those utility curves are on the march, in many cases downwards.  Our Utility is walking a bit further to save money.  We all want to be seen spending our dollars wisely.  And if you look at advertising, suddenly the word “Value” is cropping up everywhere.  Value brands.  Value stores.  Value segments.

I think we are all fooling ourselves into thinking value is somehow calculated in people’s minds with an equation related to quality and price.  Value means cheap. So why not just say it straight?  Cheap brands.  Cheap stores. Cheap segments In these days, being cheap is a good thing.  

The word cheap used to have a much more positive connotation.  It meant getting a great bargain.  It was a sign of being clever. There was even a best selling book called Cheaper By The Dozen back in the late 40s.  

I get the feeling that the people who are really most comfortable using phrases like “Value Brands” are the advertising agency folks.  Working on a “Cheap Brand” just doesn’t have the portfolio cachet of “Luxury Brands”.  Which would you rather have on your resume — Bergdorf’s or Walmart?

On the other hand, the vast majority of people in this country really just want to know the cheapest place they can buy what they need.  Because the Utility of convenience doesn’t mean much when your job has evaporated and you have all the time in the world.

The Utility Curve has shifted.  Now it’s time to shift the language.  Cheap is in.  Cheap is cool. Cheap is smart. We are entering the era of Cheap Chic! Just ask MTV.