Faster, Better But Above All Cheaper
By Doug Stephens
I came across this article today, examining the debate over whether Apple should create a line of cheap iPhones. It seems Bank of America/Merrill Lynch authored a report that comes down soundly in favor of such a move. Apple they say, should make cheaper iPhones for “emerging markets and budget-conscious consumers”.
Once I got past the irony of Merrill Lynch (a name carrying the lingering odor of bankruptcy) advising Apple (who has more cash than the U.S. government) on building a successful product strategy, it occurred to me that this same scenario has been played out hundreds of times in virtually every category. A manufacturer sets 
incredibly high design and build standards and in so doing creates a brand that appeals very deeply to a select segment of the market. Their uniqueness, efficacy and attention to detail commands a significant premium for their products, which their chosen segment pays quite willingly, happy to be part of a brand that clearly understands them. Life is good.
But then…
The moment the brand’s astonishing growth slows – even slightly – the market (analysts, consumers and investors alike) do the same thing. Rather than have faith that the values that got the brand to its soaring heights will carry them through the rough patch they instead pressure the company to lower its standards – the same standards it built its success on, to appeal to a wider, more shallow segment of the market. To reach customers for whom the brand was never intended in the first place. They recklessly suggest the company broaden its segmentation, while risking disenfranchising the very customers that make up the beating heart of loyalty at the core of the brand.
The lesson here is simple
No matter what you do or what you sell, the market will ask you to do it faster, better but above all, cheaper. Wall Street will pressure exclusive brands to be more inclusive. Analysts will coerce you into dumbing down your design principles. In short, in an effort to make a quick dollar, investors will push you closer and closer to the deadly middle of the market. The place where brands go to die. To forfeit your company’s soul.
And it doesn’t matter if you’re Apple, Mercedes, Coach or the small retailer down the street. My emphatic advice to you will be the same.
Don’t do it.
Look for my book, The Retail Revival, in stores February 28th.