The Business Book

288

SEE HOW MUCH, NOT

HOW LIT T LE, YOU CAN

GIVE FOR A DOLLAR

MAXIMIZE CUSTOMER BENEFITS

H

enry Ford spotted a gap in

the market for a mass-

produced car that ordinary

Americans could afford. The Model

T Ford was launched in 1908 and

was still selling well nearly 20 years

later. During this period, Ford

regularly improved the car. For

example, the first version of the

Model T required the driver to crank

the engine by hand to start it, but

later models had an electric starter.

Ford did not opt to make customers

pay more for this better product. In

fact, he did the opposite. The price

of a Model T Ford fell every year

from 1909 until 1916. Ford saw the

importance of offering more for less.

When cost-savings were made on

the production line, they were

The customer expects...

But any extra features and benefits included

will help to maximize customer satisfaction.

...high-quality goods. ...value for money.

See how much, not how little,

you can give for a dollar.

IN CONTEXT

FOCUS

Raising quality

KEY DATES

1850 Consumer choice theory

is developed by UK economist

William Jevons—according to

this theory buyers seek out

products that offer the best

value for money.

1915 US businessman

Vincent Astor establishes

the first supermarket, in

Manhattan, NY.

1971 Businessman Rollin King

and lawyer Herb Kelleher set

up Southwest, the world’s first

low-cost airline, in Texas.

1995 The Liberal government

in Canada, under the leadership

of Jean Chrétien, manages

to cut public spending by

nearly 10 percent in their

attempt to provide taxpayers

with more for less.