The Economics of MOR Companies

James Surowieki looks at companies that cater to neither the high-end nor the budget conscious consumer.  Surprisingly, he finds those companies (like Sony, Dell, Ford) are being squeezed out in favor of companies that specialize in one end of the spectrum, whether they be an IKEA or an Apple. 

“At the same time, the global market has become so huge that you can occupy a high-end niche and still sell a lot of units,” he writes.  “Apple has just 2.2 per cent of the world cell-phone market, but that means it sold twenty-five million iPhones last year.” 

If you’re a mid-range or middle of the road company, you just have to market your product in a compelling way.  There’s nothing wrong with buying a Dell Computer or a Ford automobile, the problem is how they are perceived.  There’s nothing sexy or culture-pushing about MOR.

The companies need to figure out a way to convince middle class consumers their products might cost a little bit more than the value-class, but that they’ll get more use out of the product, or that it might last longer.

Not to try and sell a Dell computer, but I’ve had mine for about six years now.  It’s a dinosaur by any measurement.  Except that it works and works well.  Not always, but more often than not.  I’ve spilled everything from wine to water on the keyboard and it still works.  I’ve dropped and abused it in every manny possible.  And yet, I’ve had less issues with it than Lady Oyster has had with her three-year-old Macbook.

It could just be luck, but still.

My feeling is that if there is something I really, really want I’m going to go and buy a quality product regardless of the price.  I’ll do my research and then spend the money.  Otherwise, I’m just going to go cheap.  I’ll buy everyday things at a value, knowing they’ll just have to be replaced over time. 

But when I want something, I want it to last — whether that’s a computer, a chef’s knife, or a pair of shoes. [via]

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