Could it ever be wrong to offer too much quality to your market?

It is. So if you’re a perfectionist and you insist on offering nothing but the best to your customers all the time, read on.

First of all, we’re not saying that you shouldn’t offer quality products and services! Far from it! In fact, kudos to you if you have a quality orientation!

But what we’re saying is that there comes a point when offering too much quality no longer makes business sense.

Case in point: Once upon a time, San Miguel’s Magnolia was the top fruit juice provider in the market. Their tetra-brick drinks dominated the juice market and they were happy.

One day, here comes a new entrant with an “inferior” (in San Miguel’s perspective) juice drink, named Zesto. At first, San Miguel scoffed because there simply can be no way that the market would forego the high quality Magnolia drinks — which had at least nine percent real fruit puree — in favor of something that was mostly water, sugar and food coloring.

Surprise. The market opened up and embraced Zesto and, before long, Zesto became the number one juice drink in the market (despite Magnolia’s protests when Zesto boasted this fact in the papers in the early 1990s).

What happened? Apparently, while there would be a loyal following for Magnolia’s juice drinks, the bigger chunk of the market didn’t care about stuff such as puree content. Instead, they were concerned with the balance between affordable price and “quality” in terms of taste. Zesto tasted like juice… therefore it must be juice. Despite what the ingredients say.

In this case, Magnolia was offering too much quality to the broad C and D markets. They couldn’t care less about fruits in their drinks. So Magnolia floundered on this demographic. Okay, the AB market perhaps still appreciated the Magnolia bricks, but even this market saw erosion as more and more people felt happy enough with the cheaper substitute.

Moral of the story? If you do want to pursue a purely quality orientation, then you will be better off focusing on an upscale market that can appreciate what you’re doing. And if some competitor starts offering a cheap substitute with inferior materials, you have no right to complain if the market opens up and a huge swarm of buyers flock to his door. Because by virtue of your insisting on a quality orientation, you are effectively saying that you do not intend to compete in the broader markets anyway.

Postscript: As you may know by now, San Miguel eventually gave up and launched its own lower-priced line of water-and-sugar fruit juices as well, under the Funchum brand. And today, this particular market is already swamped with brands from many different firms.