Perceived Quality vs. Actual Quality

Please read the following out loud in your best Howard Cosell impersonation, and then when your coworkers look at you as though you have lost your mind, tell them to visit this blog. Thank you for your cooperation.

Ladies and Gentlemen welcome to the knockout in New York City, the coup in Cupertino, the deathblow in Detroit, the smack-down in the Suburbs. Today we witness a battle of epic proportions between two contenders who have seemingly been going at it since before the dawn of time. They represent the endless struggle between logical facts and figures, and raw, unchecked human emotions. And now without further ado, we take you ringside for the introductions.

In this corner of the ring, weighing in with the entire worldwide force of the marketing, advertising, and branding industries combined, sporting a dominating record of only a handful of losses to several million wins, featuring significant victories in the clothing, auto, and caffeinated beverage industries, the master of mind-games; Percieeeeeved Qualityyyyyy!!

And in this corner, the challenger, weighing in at over 32 trillion lbs; the combined weight of every last piece of manufacturing, testing, and shipping equipment ever made, with less than 10 wins to its credit, coming mostly in the grocery and medical industries, the dot on your ‘i’ and cross on your ‘t’; Actuaaaaal Qualityyyyyy!!

You can now stop reading as Howard Cosell, although you most certainly don’t have to.

The battle between perceived quality and actual quality truly is an epic struggle. Generally though, when we speak of this dichotomy, we aren’t talking about trying to convince consumers that a bad product is good, as it might seem at first glance. First of all, we have to own up to the reality that as much as we like to use such labels, no products are completely good or bad; rather they all exist in varying degrees of grey between the two. And second of all, no legitimate business with any long-term success has ever set out to make an intentionally terrible product with the goal of selling it on false merit, so banish any thoughts of evil corporations trying to trick you out of your money, because it doesn’t factor into our equation.

For the most part, companies worldwide are doing the best they can to create products that people want to buy. We may occasionally berate their massively misguided attempts at doing so (Pontiac Aztek, Microsoft Zune, any cell phone by LG, etc.) but if one were to step back and view these attempts objectively, even the worst products satisfy the most basic set of functions that is required of them (the Aztek could be driven, the Zune played MP3s if you could figure it out, and LG phones make calls most of the time). Typically, the quality of a mass-produced product falls somewhere between a C- and an A+, or in other words, very few companies are getting an F; spending the type of money necessary to launch something, only to find out that it doesn’t work at all.

If we continue the grading analogy, the curve is set fairly high for consumer products. It’s very difficult to be the star student when everyone else in your class is getting the same grades as you, and this is why the idea of perceived quality is so important.

The auto industry is one of the best examples of how perceived quality dominates actual quality. Despite the fact that all cars share 99% of the same technology, materials, and construction techniques, car companies move mountains to establish characteristics that are perceived as being unique to each nameplate. For decades, Toyota and Honda have been seen as the ultimate quality brands. Their cars outlast any other on the road, and are light-years ahead of any other manufacturer when it comes to dependability. Want to know who beat them in JD Power’s 2010 dependability rankings? Lincoln, Buick, and Mercury (in addition to the slightly less surprising Porsche, and Lexus; a division of Toyota). The interesting thing is not that Honda and Toyota have been beat at their own game, but that their brand positions, and in turn, their public perceptions remain unchanged.

Toyota and Honda place numbers 1 and 2, respectively, on ALG’s perceived quality rankings, despite the host of recalls both have endured over the past year, while Buick ranks 13th, Mercury falls to 20th, and Lincoln doesn’t even make the cut. Over the years, both Japanese brands’ claims of quality have been backed up by their customers’ real world experiences, and even now that they have lost a step and their competition has leapfrogged them, that perception persists. Not even uncontested data, and widely publicized problems within the two companies have made a dent in their brand armor.

But the word quality does not always have to mean the physical and functional integrity of an item. ‘Quality’ can be replaced with ‘qualities’ to mean something completely different. Within the same industry, each auto brand is trying to express a vastly different set of qualities to persuade customers to choose them over their competition. BMW is seen as one of the premier luxury brands, and its brand position as ‘the Ultimate Driving Machine’ cannot be rivaled by any competitor. Again, this is due to the fact that over several decades, sporty, stylish cars flowed out of Munich as though a spigot could not be turned off. However in recent years, the company’s prowess has been challenged not just by predictable competitors like Mercedes Benz, Audi, and even Jaguar, but by the most unlikely of sources; Hyundai.

The Hyundai Genesis is being quietly lauded by auto publications as being a real challenger to the BMW 5 series, Audi A6, Mercedes E Class, and Jaguar XF. It handles comparably, shares many of the same features, and does so for nearly $20,000 less. The challenge for Hyundai is that their perceived qualities do not live up to the standard set by their actual qualities. BMW, Audi, Mecedes Benz, and Jaguar all have brands that support their claims as being the top luxury carmaker in one way or another, while the vast majority of informed consumers would say that Hyundai simply doesn’t belong in the same comparison test, despite the data saying otherwise.

What many companies fail to realize is that perception is reality. If consumers think a product is made poorly, it doesn’t matter that it can be run over by an Abrahams Tank and survive. The purveyors of such goods often treat their customer bases with contempt, believing that they pulled the short straw and that they were simply the victims of a fickle populous needing someone to be at the bottom of the pile, but the reality is that brands all have the power to change the way that people think about the products they offer, and sometimes that change can be as simple as adjusting the context through which the product is showcased.

Recently I was on the hunt for white dress shirts. I didn’t need anything overly fancy or expensive, but I certainly didn’t want to buy something of poor quality. My first stop was at Macy’s, the traditional go-to department store for reasonably priced clothing, however when I got there, all of the shirts were in plastic bags, stacked on shelves in no particular order, and the salesman was being borderline rude through his so-thick-you-need-a-machete-to-get-through-it accent. I still have no idea whether or not the quality of the shirts was up to my rather lax standards, but the context through which they were offered just didn’t pass muster.

The plastic bags told me that that I wasn’t allowed to touch the shirts, which automatically made me suspicious of their quality, the disorganized shelves told me that the company took no pride in its customer experience, so I could not assume they took pride in their products either, and the unfriendly and unhelpful staff eliminated any remaining thread of trust I had that the company had my best interests in mind. Because of the environment through which I experienced the product, I was unable to give them the benefit of the doubt on any criteria that could not be determined on the spot. Instead, I went to Nordstrom and paid $20 more for the shirt, which I was more than happy to do because they were all stacked neatly on tables, by size, for me to touch, and the salesman spent a half hour with me, making sure that any questions I had were answered promptly and without any pressure to purchase.

The bottom line is that you could have presented the same exact shirt to me, or anyone else for that matter, with different labels and in those two different contexts, and 4 out of 5 times, people will be willing to pay the price difference for the emotional comfort of perceived quality.

The balance between perceived and actual quality is why a sports reporter on the local news is seen as unsophisticated and somewhat lame, while one saying the same things on Sportscenter is funny and cool. Or why Tide detergent is worth more than Costco’s Kirkland Signature even though under most circumstances, they will both get your clothes clean. Strong brands find universal truths about themselves, and build upon them until their customers begin to assume certain qualities about new products, services, or experiences offered by the company before ever getting their hands on them.

This is the ultimate goal of a brand; to develop assumptions about a company that promise a certain level of quality without the customer having to personally experience it to accept it as true. All companies live and die by their ability to create high quality goods, but if they can’t find a compelling way to make the promise of quality first, they may not ever get the chance to prove it.

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3 Responses to Perceived Quality vs. Actual Quality

  1. Seth Snyder says:

    Great article Andrew! I never thought of brand perception in this way, very eye opening. It made me wonder about a difference between your Hyundai vs. BMW example and the laundry detergent one. To me, the visual differences between the Hyundai and the BMW are becoming slimmer to the point of some people I know regularly confusing the Hyundai with an actual BMW or Lexus on the road. Whereas, I doubt anybody would pick up the Kirkland detergent thinking it was the Tide. I suppose this is more about “package” design than branding overall but I think that plays a big role in perceived quality while not necessarily having anything to do with actual quality. Package some shit in a nice box and it’s still shit, right?

    • Andrew says:

      Totally agree. Packaging plays an enormous role in the perception of quality. That’s why its so hard right now to get clients to move to more Eco-conscious solutions, because they still harbor the belief that glossy printed boxes are more appealing to consumers than recyclable cardboard and eco plastics regardless of the harm they do long-term.

  2. Pingback: Aura Brand Development

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