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Hacker News - Ask HN: Is anyone familiar with an anecdote about diluting product quality


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Years ago at a company meeting the regional director was talking about the strength of the brand and how if you cut corners in quality you'll lose customers in the long run. He gave an example (likely apocryphal) of a chocolate company (or maybe just candy) famous for high quality chocolate that was expensive to make. There were hard to find ingredients and lots of manual labor involved. A new CEO was hired and he wanted to increase profits. He started by researching cheaper ingredients. Replacing just one ingredient, he was able to increase the profit margin per chocolate bar, and customers didn't notice the difference in taste. So he tried it again. Again consumers didn't notice the difference in taste and profits went up.

Long story short, after several years of swapping out ingredients and replacing manual labor with assembly lines, profits were up, but suddenly customers stopped buying. A new chocolate brand touting high quality ingredients and handmade chocolate was now the market leader. I guess the moral of the story is that you can chip away at your product quality for a little while, but eventually customers will notice.

Has anyone heard this story and have a link to a version of it?

Comments URL: https://news.ycombinator.com/item?id=29859668

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