A Fresh and Important New Way to Understand Why We Buy
Why did the RAZR ultimately ruin Motorola? Why does Wal-Mart dominate rural and suburban areas but falter in large cities? Why did Starbucks stumble just when it seemed unstoppable?
The answer lies in the ever-present tension between fidelity (the quality of a consumer’s experience) and convenience (the ease of getting and paying for a product). In Trade-Off, Kevin Maney shows how these conflicting forces determine the success, or failure, of new products and services in the marketplace. He shows that almost every decision we make as consumers involves a trade-off between fidelity and convenience–between the products we love and the products we need. Rock stars sell out concerts because the experience is high in fidelity-–it can’t be replicated in any other way, and because of that, we are willing to suffer inconvenience for the experience. In contrast, a downloaded MP3 of a song is low in fidelity, but consumers buy music online because it’s superconvenient. Products that are at one extreme or the other–those that are high in fidelity or high in convenience–-tend to be successful. The things that fall into the middle-–products or services that have moderate fidelity and convenience-–fail to win an enthusiastic audience. Using examples from Amazon and Disney to People Express and the invention of the ATM, Maney demonstrates that the most successful companies skew their offerings to either one extreme or the other-–fidelity or convenience-–in shaping products and building brands.
From the Hardcover edition.
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|Title of Business & Economics eBook: Trade-Off|
|Release Date: 09-15-2009|
|Allowed Countries (hover)|
|Publisher: Broadway Books|
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The Fidelity Swap
We constantly, in our everyday lives, make trade-offs between the fidelity of an experience and its convenience. It happens when we decide to watch a baseball game on TV instead of going to the park, make a phone call instead of meeting face-to-face, eat fast food at McDonald's instead of a nice meal at a restaurant, or buy $300 noise-canceling Bose headsets instead of using the inexpensive earbuds that come with the music player. Businesses, nonprofits, and governments make the same kinds of trade-offs in their buying decisions.
The way those trade-offs work and play out in the marketplace is the key to countless business successes and failures. This is the fidelity swap.
This fidelity swap has been going on since humans invented commerce. But the role of technology today accelerates the whole process.
There are five key concepts behind the fidelity swap:
Fidelity versus convenience. Fidelity is the total experience of something. At a rock concert, for instance, it's not just the quality of the sound—which often isn't as good as listening to a CD on a home stereo—but also everything else going on. That includes visually seeing the band, the lights and effects, the crowd around you, even the fact that you can later tell people you went to a particular concert and saw The Who, or Coldplay, live. It's all part of what makes up fidelity.
Convenience is how easy or hard it is to get what you want. That includes whether it's readily available, whether it's easy to do or use, and how much it costs. If something is less expensive, it's naturally more convenient because it's easier for more people to get it. In music, a downloaded song f...