Is There a Word For...

[Glassman]

...when a company or organisation is competing against non-standard (cheaper) practises?

E.g., To supply and install a windscreen for a Toyota Power Ace van will require a trim to be renewed. This trim is manufactured specifically for this vehicle and is priced (quite expensively compared to others) between £25-72 + VAT depending on supplier and discounts etc. To price a replacement windscreen for this particular vehicle, the installer would have to factor-in the cost of a new trim... it is an unavoidable / essential part of the installation.

Compared to the cost of a Ford Transit trim: £3.50 + VAT.

But a Ford Transit trim is totally different (in appearance and performance / function) to the Toyota Power Ace trim and is only meant for a Ford; if used, this cross-use is very likely to cause problems.

But there are oufits that are using the Transit trim allowing them to charge a significantly cheaper price for the job.

In terms of saving money, it is understandable, but in terms of doing the job correctly and charging what is reasonable for such a replacement it is unacceptable. It seems that many vehicle owners are happy with a cheaper price ahead of industry standards.

Is there a word for this kind of competition / drop in standards?

(I can think of a phrase...)

[smartie]

Shoddy?

Edited by smartie on Wednesday 22 August 12:12

[Glassman]

smartie said:

Shoddy?

Yes, but a lot of people don't think beyond saving ££££s

[pugwash4x4]

wouldn't it be illegal?

[Eric Mc]

Predatory Pricing.
Undercutting.

[Glassman]

Eric Mc said:

Predatory Pricing.
Undercutting.

Undercutting

It also means for every slice off the price, there will invariably be a shortcut - or three.

With the Albanians, Chzecks, Latvians, Lithunanians, Poles and Romanians establishing themselves (and hungry for business) the undercutting will no doubt continue. I think the Govt call this GLOBALISATION.

[pugwash4x4]

surely this is actually illegal.

if i pay to have a fezza fixed and it was fitted with parts made for a focus, then that would be illegal no? you can't sell one thing and supply a different part altogether.

[Glassman]

pugwash4x4 said:

surely this is actually illegal.

if i pay to have a fezza fixed and it was fitted with parts made for a focus, then that would be illegal no? you can't sell one thing and supply a different part altogether.

Although that does happen (esp. with insurance companies / large national windscreen companies) this is not what I mean.

For example: you call Company A for a price for a Nissan Micra. They quote you say, 180-quid which will include new trims - the proper ones for that car.
Next you call Company B who quote you 120 and tell you that the price includes a new trim.
99% of punters go with Company B. You get a new windscreen for your Micra and everything will seem ok. Only... the 'new' trim could be for a Corsa which cost about £8.00. The proper Micra trims (two parts) cost the installer £40-odd a set.

To do the job properly only Micra trims can be used (if required). A Vauxhall Corsa trim is designed for erm, a Corsa. It does not do for a Micra what it does for a Corsa (channels rain water / lips over aperture / flush fitting etc - they are very different).
Yet, there are many companies that will continue to take a chance and fit non-standard parts to cars because they are cheaper and therefore enable them to get the work.
My company has come across many cars with non-standard trims fitted and quite a few of them have been done by the more well-known, household name companies. Quite often, the fitter will tell the car owner that the 'new' trim they have used is universal.

Edited by Glassman on Wednesday 22 August 21:03

[skeggysteve]

Glassman,

I understand where your coming from.

But I don't blame the companies I blame the consumer.

The consumer/customer always wants things cheaper and most of the time do not think about the quality.

Why don't you offer two prices and make the customer aware of the difference. Price one with the correct parts and price two with the cheapo parts?

BTW do the companies fitting the cheaper trim offer a warranty against leaks etc.

Steve

[roadsweeper]

I'd use the term, "sub-standard" to describe this I think.

I agree sacrificing factors such as total cost of ownership, safety, reliability, etc. on the altar of low pricing is all too common.

Edited by roadsweeper on Thursday 23 August 09:58

[AlexB]

You could argue that it is cross-selling in that the consumer probably believes they are buying a genuine part (or at the very least a generic copy of the genuine part) rather than a part from another vehicle which just happens to fit and do a similar, if not quite identical, job.

Alex

Edited by AlexB on Thursday 23 August 09:49

[Glassman]

AlexB said:

You could argue that it is cross-selling in that the consumer probably believes they are buying a genuine part (or at the very least a generic copy of the genuine part) rather than a part from another vehicle which just happens to fit and do a similar, if not quite identical, job.

I'm blue in the face.

The main point here is that the customer - especially the likes of fleet owners - is getting what should cost 'X' at a significantly reduced price. The only way this is attainable is by cross-use of much cheaper parts that are not designed for any other vehicle.

[emicen]

Bottom line, you feel you are losing out on business.

The solution is simple, two tier pricing. Tier 1 - proper job, brand specific parts, higher price. Tier 2 - "generic/universal" parts same as the rest, lower price.

Give the customer the 2 options, explain why they exist and what they get with both and that regardless of how it is worded they will be getting the cheap option with any company giving a tier 2-ish price.

There really is no point in getting exascerbated by such situations. You have to figure out how to beat them or join them. If you wish to protect your company's well earned name, rebrand one of the vans and create a spin-off that does the cheapy jobs only.

[Glassman]

emicen said:

Bottom line, you feel you are losing out on business.

The solution is simple, two tier pricing. Tier 1 - proper job, brand specific parts, higher price. Tier 2 - "generic/universal" parts same as the rest, lower price.

Give the customer the 2 options, explain why they exist and what they get with both and that regardless of how it is worded they will be getting the cheap option with any company giving a tier 2-ish price.

There really is no point in getting exascerbated by such situations. You have to figure out how to beat them or join them. If you wish to protect your company's well earned name, rebrand one of the vans and create a spin-off that does the cheapy jobs only.

Making good sense.

Creating a spin-off company is a good idea, but in this cureent climate, it'll probably do very well very quickly!

[Dave_ST220]

What trims are you talking about? Every car i've had has not required any trim when a new windscreen goes in. My bro works for a national windscreen fitting company, only time i've seen them use any trims is when the 'screen comes with them factory fitted. I know 100% they don't carry all kinds of trims but certainly have hundreds of windscreens.

[Glassman]

Dave_ST220 said:

What trims are you talking about? Every car i've had has not required any trim when a new windscreen goes in. My bro works for a national windscreen fitting company, only time i've seen them use any trims is when the 'screen comes with them factory fitted. I know 100% they don't carry all kinds of trims but certainly have hundreds of windscreens.

I used trims as an example because they are relevant to my trade. Most trims are re-used, however, there are some that cannot be salvaged.

This is not only about my trade, but all trades in general.

[Dave_ST220]

sorry-i see what u mean I thought i could help by seeing where they get there trims from.

[Stephanie Plum]

It is exasperating but part of doing business these days I'm in the printing industry, and I regularly quote against companies quoting a job for less than I can buy the paper. It isn't that we're bad at buying, it's just that they're desperate to keep their presses running so will do the job at virtually any price. I know they'll go bust as soon as they have a bad month and cashflow suffers, but a lot of customers don't care - they buy on price alone. Service and quality don't come into it.

We get round it in a number of ways. For example we try and find clients who buy direct and don't use print management companies or agencies for buying - they are to us what fleet companies are to you by the sound of it. We get very close to our customers in terms of service and try to build really good personal relationships with them - to try and make them feel guilty about buying elsewhere. We try never ever to get things wrong -and if we do we sort it, fast! We can be quite ruthless about not having our time wasted by people who are trying to use us as a quoting service to get the requisite number of prices in for audit purposes. We don't enter on line auctions or tenders which involve masses of work with only a slim chance of us winning anything worth having. I know some of these things probably aren't relevant to your business, but really I'm just trying to say it's not just you that's suffering.

We'll be very clear about what we're quoting and what the price is for - if there is an Option B on the price front we'll provide it and explain the difference.

Maybe there is some mileage in doing specialist windscreen replacement as opposed to trying to compete aginst the big boys? For example I recently needed a new windscreen for my Lotus Elise. No way would I have trusted Autoglass or similar with the job so I insisted my dealer did it. My insurance caved in and said OK but you have to pay a higher excess - something I was willing to do to ensure the job got done right. I always see posts on seloc for example about people wanting recommendations for windscreen replacement. Just a thought

I'll shut up now.

[emicen]

Stephanie Plum said:

Maybe there is some mileage in doing specialist windscreen replacement as opposed to trying to compete aginst the big boys? For example I recently needed a new windscreen for my Lotus Elise. No way would I have trusted Autoglass or similar with the job so I insisted my dealer did it. My insurance caved in and said OK but you have to pay a higher excess - something I was willing to do to ensure the job got done right. I always see posts on seloc for example about people wanting recommendations for windscreen replacement. Just a thought

Mate of mine needs a windscreen on his Exige. Thinks he shouldnt trust autoglass or RAC as theyre monkeys. Drops it off at his local dealer for some work to be done and mentions the cost of a replacement windscreen.

Later returns and dealer says it'll be ~£250 (I think that was the number). He thinks thats a touch steep so on the way home, calls in at Autowindscreens. "Thats the second time someones been asking about a windscreen for one of them today".

Turns out the dealer would have used them anyways and charged him £60 for the priviledge of them driving his car there and back from their dealership.

[mc_blue]

What you've mentioned here is similar to the car transportation and recovery market (although different we operate in both). Comparing some quotations is like apples and pears (with respect to service standards, state of transporter and employee's training) but usually I cannot offer a 'competitive' rate and the cheaper firm will have the business even if they are breaking the law or prove to be unreliable.

With respect to the breakdown recovery industry, other companies offer incentives to their employees to charge for 'specialist' equipment when it isn't necessary in order to dump a £300/400 bill on the motoring organisation when the equipment sometimes isn't even used. I can think of a word to describe this sort of activity - thieving.