On 20 Apr 2016 at 21:22, Peter H Brenton wrote:

> [delurk] I believe we make cheap products more to target the market
> for a particular price point than for reasons of technological or
> fashion obsolescence.   Take a company that makes dishwashers, for
> example.  The marketing department determines from research that the
> best price to sell the dishwashers for is $400 per unit, and the
> accounting department says they need a margin of about 25%, so the
> target cost for the unit is $325 (25% of 320 = $80, $320 + 80 =
> $400).  More margin means better profit, so the engineers and
> designers, being superstars, trim the materials cost and shortcut a
> few component manufacturing processes to get the cost down even
> further.  They do this by using 8 years as a target lifetime.  That
> means the impeller in the pump can be made from cheap plastic instead
> of steel, the rotating sprayer is plastic instead of stainless steel,
> the bearing on the sprayer can be a simple nylon bushing since it´s
> pretty light now, etc.  The fact is, if they made the parts all from
> high end materials, then the thing would last 40 years, but would cost
> $2,000 and no one would buy it since there´s another model for $400
> on the market, and the company would go out of business (anyone ever
> have a Kirby Vacuum cleaner?  I still have my Mom´s bought in about
> 1978).

In this case, using the $400 model and replacing it every 8 years makes sense - it costs
the end user about the same, and they get a shiny new washer every 8 years. However,
it's not terribly uncommmon for the 40-year model to cost less than five times the
8-year model, in which case the cheap model only makes economic sense if the item in
question is still seeing significant performance improvements inside that 20 year
lifespan (as dishwashers have been). Once that's not the case, and that high-end model
will be just as good as a cheap one until it finally dies, the $1600 for 20-years model vs
$400 for 8-years is just another advantage of being wealthy (not so much with
dishwashers because of the tendency to periodically remodel kitchens, but with a lot of
other stuff).

This effect is really obvious with something like shoes - if you're struggling along, living
from paycheck to paycheck, you can find yourself only able to afford (barely) $40
shoes, and have to buy a new pair every few months, and they don't fit very well and
start leaking quickly so your feet are constantly cold and damp except in summer.
Meanwhile someone with more money buys $200 shoes when they need/want a new
pair, and their shoes fit well, don't leak, and last two or more years. The poor person
spends $120+ a year on bad shoes that ruin their feet and joints, the well-off person
spends $100/year on good shoes.