When brands cut quality, they squander consumers’ trust

By Matthew Mohr

FARGO, N.D. – The idea of creating a lasting brand was established by such great corporations as Coca Cola, Ford Motor, IBM, McDonald’s and super marketers such as 3M and Procter & Gamble. Much of the value of branding came after World War II, when consumers were looking for consistent, reliable, quality products when uncertainty surrounded the market place.

Consumers and businesses were willing to pay for a product (brand) they could trust to meet their needs. Poor quality products failed and were not accepted.

But today’s consumers seem to have lost both their loyalty to brands and their insistence on quality. Younger buyers, especially millennials, seem to take more pride in getting a low price than in making sure the product actually works.

My formal training in marketing was as a brand seller, and my sales experience revolves around quality products that meet the customer’s needs. So, accepting poor quality and bad service is hard for me to tolerate.

The continued lowering of product quality will create more frustration for people as they try to use products that don’t perform. Individual consumers and businesses across the country are starting to abandon products that fail, causing the sellers caught with the lowquality products to continue to cut prices in hopes of reducing excess inventory.

A study of the agricultural-implement market provides fascinating insight to the rise and fall of products. Many innovative, brand-specific products have been popular at one time only to be acquired or fade away. But in the midst of this highly competitive and extremely diverse market, a few names continue to stand out as a result of their brand.

Two national retail chains learned a hard lesson about quality and brand. Both JC Penney and Sears established themselves as brands the consumer could trust to always work. For whatever misguided reasons, both cut quality and tried to become price leaders. Consumers quickly learned they were not getting the quality they expected.

Both of these great companies have faced turmoil and lost market share. The survival of JC Penney and Sears is in question today, mostly because each tried to respond to what it thought consumers wanted to pay, failing to understand what consumers valued.

Toyota Motors is a recognized quality product today. At one time, the company had products with a questionable reputation. I was told one Toyota dealer near Minneapolis only drove a domestic (United States) make vehicle for years because, as a dealer of the Toyota brand, he didn’t trust it to be reliable.

Toyota spent countless dollars and used exemplary marketing strategies, along with drastically improving its product, to establish a long-lasting sustainable positive business and product brand.

Only a fool or someone with little experience would introduce low quality and use price cutting to try to achieve long-term success in any market conditions. True branding involves building security with the product users. Failing to provide security of use and performance simply accelerates the brand’s demise. PB

Matthew Mohr CEO, DACOTAH PAPER CO. FARGO

Editor’s note: The following is a Q&A with Ben Schroeder, the 2018 president of the North Dakota Association of Realtors, and Amy Hullet, the association’s 2018 president-elect.

Schroeder is a Realtor with Park Co. Realtors in Fargo, N.D. He was licensed in 2009 and served as president of the Fargo-Moorhead Realtors Association in 2016.

Hullet is a Realtor with Century 21 Morrison Realty in Bismarck, N.D. She was licensed in 2003 and served as the 2016 president of the Bismarck-Mandan Realtors Association. The interview has been edited for clarity and length.