525 - Big business vs. Small, Viva la difference

Readers have commented that our occasional criticism of the “competition” might be interpreted as being a trifle too convenient. The implication is that we bad mouth the big boys in order to toot our own horn. Perhaps there is a sliver of truth in what they say but we can’t help it. We feel that we’re the only source of truth and justice for our customers and readers and by golly we’re going to tell it like it is. About 10% of the public is savvy enough to fend for themselves and don’t need us, but the rest you are potential victims of the self-serving misinformation  campaigns spewed forth by the major players in consumer electronics.

Of all consumer electronics, those relating to computers, communication and the Internet are the least understood by the general public. Smart TVs, tablets, smart phones and PCs and all the related gadgets, geegaws, gimcracks and play-pretties are mysteries to most of us. We use them and we spend a lot of money on them but we really don’t understand them.  

So how do companies promote the virtues of their high tech product over those of the competition when the public doesn’t even understand the technology? The short answer is that you don’t even try. For the most part ads for consumer electronics products are aimed at “image building.” They appeal to your emotions, not your logic. If you buy Apple products you are young, hip, urban, unique, exciting and cool, PC users are trite and boring. Apple also spends millions making sure that its logo is on nearly all PCs that appear on TV shows and in movies leaving the impression that everyone uses Apple when in reality less than 10% actually do. Rob Lowe’s Direct TV ads, “don’t be like this me,” made it plain that Direct TV customers were suave and debonair while their competitor’s   customers were just plain creepy. These ads say nothing about the functionality or usefulness of the product; they simply leave you with the vague impression that using the advertiser’s products will make you smart and beautiful while the competition caters to doofus knuckle draggers.

Even when ads address some aspect of technology, it is typically superficial and non-technical in nature. They create a “buzz word” to identify a technology associated with their product and then hype the buzz word.  Apple hypes its “Retinal display” screens and “Face time” and “iSight” cameras yet these components are actually products made and sold to Apple by their arch enemies Samsung and Sony. It seems unlikely that Samsung and Sony sell Apple better screens and cameras than they use in their own products. Intel creates product esteem and demand for their CPUs through image advertising and repetition, not by comparing technology head to head with their only real competition AMD. Four ding-dongs and an “Intel Inside” slogan say nothing about product technology but the public perception of value that Intel creates through advertising enable Intel to charge a premium price for its CPUs over comparable AMD CPUs. Yet AMD beats Intel handily in price/performance competition. 

The point is that unless you really understand the technology and do the research, you’re buying decisions are likely a result of image advertising and/or misinformation. Lenovo, HP and Dell together sell over 50% of the World’s PCs. They all use the same components and they are all manufactured by the same company that manufactures Apple products, China based Foxxcon. Price, service and warranties are pretty much alike so your purchase decision won’t be based on price or competing technologies, it will be influenced by whichever company has the most favorable image in your mind. That’s what these companies spend billions to create.

In big business, management’s primary responsibility is to the bottom line and to the stockholders. It is naïve to believe that customer satisfaction will take care of the other two. Their customers are only pawns in a complex chess game of mergers acquisitions and competitive one-ups-manship where technology evolves rapidly and market leadership is fickle.  

For small businesses it is entirely different. Success in small business is based on face to face relationships. You can’t misrepresent your product or services and expect to stick around. You must provide a quality product every day. Unlike the big boys, you have to answer your customer’s questions directly and honestly, so you’d better know what you are talking about. 

For twenty years we managed very large operations for multinational corporations. This is our twentieth year running this small business, The Computer Factory. We like small a lot better.