America’s Purchasing Decisions

The Perception of Quality

America is blessed with the richest and most diverse marketplace in the world. From our grocery stores to our restaurants to our malls, no one has the options and choices that Americans do.

As we consume, we are generally guided by three basic principles: price, service and quality. Due to the level of competition within our marketplace, Americans spend less of our personal income (as a %) than any other developed nation on major items such as automobiles, food and clothing. Regarding service, if you have ever shopped at a European grocery store, one realizes very quickly how little your loyalty is appreciated. Often, sufficient parking isn’t available, the store hours are draconian and you have the pleasure of bagging your own groceries (you pay for the bag and have no help getting them to the car). In terms of quality, it’s often the most subjective process.

Consumers generally have very rigid guidelines when determining a product’s quality. The wine is better because of its fruit, the cheese is tastier because of its aroma, the pizza is more flavorful because of the sauce, etc. When it comes to major purchases especially those involving considerable technology, then we rely more on perception. For instance, for most consumers, an automobile is often judged by its reputation and certain assumptions. When we buy a car, one doesn’t study engineering diagrams to evaluate the car’s timing mechanisms. Our judgment is greatly influenced by experience, perception and personal biases. Since an automobile is normally the second largest purchase we make (next to our home), it’s extraordinary how perceptions and facts collide. Please note how American auto manufacturers compare to their European counterparts. This information is provided by JD Powers, 2019 Initial Quality Study. The industrial average is 93 problems per 100 cars. The higher the number, the poorer the quality.

As you can see, American manufacturers do quite well when compared to their European counterparts. Yet, ironically, market share for European cars has increased over the last decade. The bottom line is you are paying more and getting less. This is due to the perception gap.

During these unpredictable times, we can make a difference. By buying domestic products, we keep the dollars within our shores and impact the multiplier effect. Please consider this before you purchase any major item.