Cheap: The Real Cost of the Global Trend for Bargains, Discounts & Consumer Choice [Hardcover]

David Bosshart (Author)

Book Description

Publication Date: March 2006

Manufactured goods have been getting cheaper, both in absolute terms and relative to services. Since the Consumer Prices Index was first launched in 1996, the prices of "goods" have fallen an average 2%; while the prices of services have risen 35%. The most talked about example has been in textiles: since 1996, the average price of clothes has fallen 36%. But it is not just clothes that have been falling in price: new cars are 1.5% cheaper than they were in 1996; household appliances are 24% cheaper; toys are 30% cheaper, and of course, in the audio-visual category, you'll find things are on average now 56% cheaper than they were nine years ago.

Editorial Reviews

Review

In this account of society's greedy over consumption we find the darker side of some of our favorite organizations. -- Conservation Foundation Magazine -- The Parish Pump

Touches on the long term consequences of Everyday low Pricing. -- The Grocery Trader

About the Author

David Bosshart is the CEO of the Gottlieb Duttweiler Institute for Economic and Social Studies [GDI], Switzerland's oldest and most independent think tank focusing on the area of consumption, trade and society for the last forty years. Bosshart is a trends analyst and also the author of Cult Marketing and The Future of the Consumer Society.

Product Details

• Hardcover: 256 pages
• Publisher: Kogan Page Business Books (March 2006)
• Language: English
• ISBN-10: 0749445343
• ISBN-13: 978-0749445348
• Product Dimensions: 8.5 x 5.7 x 1.2 inches
• Shipping Weight: 14.4 ounces
• Average Customer Review: 1.4 out of 5 stars  See all reviews (5 customer reviews)
• Amazon Best Sellers Rank: #2,695,688 in Books (See Top 100 in Books)

More About the Author

Discover books, learn about writers, read author blogs, and more.

Customer Reviews

Most Helpful Customer Reviews

9 of 9 people found the following review helpful:

2.0 out of 5 stars Poor Translation, Weak Argument, March 28, 2006

By 

Marsha Wood Wirtel (Philly's Western 'Burbs) - See all my reviews
(REAL NAME)   

This review is from: Cheap: The Real Cost of the Global Trend for Bargains, Discounts & Consumer Choice (Hardcover)

Many of the rhetorical lapses evident in "cheap" may well derive from a poor translation from the German. It seems as though no effort was made to avoid literal translation - much of the text is awkwardly phrased at best, completely non-sensical at worst. For example, immigrants who cross borders to take low-paying caregiving job such as nurses aid, nanny, etc. are described as being in the "love services", a phrase that has a distinctly different connotation in English than that which its author seems to have intended, judging from context anyway. "Love services" might well mean "caregiving" in the German vernacular, but the lack of proper translation certainly does lend credibility issues.

Aside from translation, I found the book repetitive, poorly organized and at times hysterical. (And this is from someone who agrees that "cheap" isn't necessarily a good thing in our current economy.) In this book, "Axis of Evil" means Wal-Mart, China and the Internet. Does the author really mean "evil" or is he being clever? We're never quite sure, although "evil" pops up in the text repeatedly, none of the context supplies any information that seems to warrant such a designation. Again, there may be a translation problem.

Bosshart is no fan of the Internet is seems, and regards the time that consumers spend seeking information and weighing choices using the Net to be unaccounted for costs. Well, maybe. But I, for one, fail to see how customer-empowerment is a problem that must be traced back to one of the "Axis of Evil" as defined in the book. We're never told why, precisely, it's a bad thing other than if people are using the Internet to explore purchasing options than they're not doing anything else. But what alternate activities might be preferable is never made clear.

As for the Vlasic issues, it's now apparent (in early 2006) that the company did, in fact, endanger itself to please Wal-Mart and nearly immolated itself on the altar of "low prices everyday". It's a shame and a situation that bears examination, but Cheap doesn't even try. It throws out the gherkin comment as an example of evil with little explanation and expects that readers will nod along in agreement.

And that's my primary complaint with the book - so much criticism is leveled at those (corporations and consumers alike) who would interact economically with a lack of critical thinking. Unfortunately, the book expects the same from a reader as Wal-Mart from a customer - Wal-Mart wants us to buy merchandise without thinking, and Bosshart wants us to buy his thesis without thinking. In the absence of any real value from either, I fail to see the point of engaging on either front.

11 of 13 people found the following review helpful:

2.0 out of 5 stars Cheap is not good, less expensive is better, and value creation is best, March 12, 2006

By 

Peter Lorenzi (Maryland, USA) - See all my reviews

This review is from: Cheap: The Real Cost of the Global Trend for Bargains, Discounts & Consumer Choice (Hardcover)

As fascinating as the thought might be and as seductive as the book's hype might also be, I found the entire premise and treatment lacking. Let me try to be specific, rather than take a few "cheap" shots. From the start, Bosshart takes up a style that is repetitive, rhetorical, and unsubstantiated. He asks three questions (p.4): "Would you like to earn more tomorrow than you do today? Would you prefer to see lower prices or higher prices when you go shopping? If you are one of those privileged enough to be able to put money aside, would you prefer a higher or lower return on your investment?" Then he "answers" his own poorly worded, biased, leading questions: "There is no need for further explanation here; the answers are clear and speak for themselves." You not likely to achieve the first or third aim, "but the second aim lies well within my grasp." NOTE: His shift between first- and third-person writing is at times confusing. Then he disparages cheap - really he means "inexpensive" but using it would ruin his thesis and hyper-marketing - food, clothing, computers, home improvement and furnishings, and travel. Reads like an old European grousing that middle-class people can afford luxuries, i.e., "Look at that white trash sitting in business class." He needs to look at his own sense of elitism, envy and low self-esteem.

He takes a side step (pp. 23-23) to assert that gambling is a trillion-dollar industry in the United States. Accepting his assertion for a moment, what does this really have to do with "cheap"? He claims, "The value of MBA is decreasing," (p. 24) and footnotes his claim. Only there is nothing there in the footnote to explain his claim and the regular, wide publication of rapidly increasing starting salaries of newly minted MBAs in Business Week seem to escape him. He cites the widespread adoption of "the 45th edition of Philip Kotler's views" (p. 24) or Michael Porter as examples of cheapening "the head start that knowledge once gave us", ignoring the fact that he first exaggerates and fails to note that a good idea is worth repeating. The information and knowledge is invaluable, not cheap. Has he paid MBA tuition recently? This isn't a weakness of "cheap," it is an example of its power and value. He cites $600 breast reconstruction surgery (p. 25) as an example of "cheap" costs for surgery even for the less-than-well off, who could not afford the surgery when they were $10,000 for the same surgery just ten years ago. Even accepting this 94% price reduction, he ignores the plethora of other health-related costs that have skyrocketed in that same period. Health care is not cheap. If you think gambling is big, look at health care. And is access to less expensive surgery a sign of the apocalypse, or that people have more discretionary income, even as prices for so many other things rise? Try other really big industries, like housing and automobiles. To buy the equivalent in 2006 of that $2,500 car you bought in 1971 will cost you $25,000. That $100,000 1971 home? Try $500,000 today. And, worse still, "reconstruction" surgery is misleading. For many, this term applies to fixing a post-mastectomy breast. But Bosshart is writing about elective cosmetic breast surgery, where he claims that even lower and middle class people are pressured to `look and feel good'. "Cheap" is not doing cosmetic surgery at all!

Here is an example of his tendency for over-the-top claims. He labels Chapter Two (pp. 39-57): The axis of evil in the economy: Wal-mart, China and the Internet. Moving on to a focus on Wal-mart (Chapter 3: Wal-martization), Bosshart claims (p.61) "many former MBA students are now among the losers in this expansion process: small independent retailers in the non-food and more and more frequently in the food sector..." Since when are these MBA industries? Bosshart claims (p. 64) that Wal-mart's California wage of $8.50 an hour puts annual income "around $14,000," and below the $15,060 poverty level for a family of three. But his math and logic don't fit, unless you assume that two-income families are only for the rich and that Americans work European-like 40 weeks a year. At his posted rate, two parents with one child working at Wal-mart would make about $34,000, more than double the poverty level, not below it. He cites Sam's Club selling cheap Vlasic pickles ("gherkins") by the gallon - and that no family can eat all they buy, they just throw much of them away -- and that both Wal-mart and Vlasic "earn next to nothing on this product." (p. 67) By his logic, there is no such thing as a loss leader and, even if there is, Vlasic will put itself out of business to please Wal-mart. Do you want to bet?

Let me stop now, lest I be accused of piling on. If there is a point to be made her, it is that knowledge is not cheap, even if information is cheaper than ever. And with less costly goods and less knowledgeable customers, we do get people able to "afford" bad - if less pricy -- choices, like gambling, smoking, snorting cocaine, watching bad movies, and reading bad books. Under globalization, people seek value for what they spend. If to create value they have to find lower prices, as Bosshart does point out, they now have the power to do that, as "the customer is king" in this market. In a world economy, with fewer trade barriers, rapid communication, and imaginative innovation, lower prices mean a better return on the dollar spent. Allowing people to afford things is not a crime; it is not even a bad idea. But I think that the basic thesis of this book is a flawed and to follow this line of thought would be expensive, costly, at whatever the price you pay for the book.

2 of 2 people found the following review helpful:

1.0 out of 5 stars Tripe, March 15, 2007

By 

Dan Bergevin (danbergevin dot com) - See all my reviews
(VINE VOICE)   

This review is from: Cheap: The Real Cost of the Global Trend for Bargains, Discounts & Consumer Choice (Hardcover)

I basically agree with the other two reviewers, but with one exception. No, I do not think that Wal-Mart is evil. And furthermore, who really cares if "Wal-Mart wants people to shop there without thinking?" People choose to shop there, period. If several hundred people choose to shop at the local Wal-Mart Supercenter and not at Joe's Market (the locally owned grocer) then who is at fault if Joe goes bankrupt? Wal-Mart may have low prices, but customers must choose if they want cheap stuff now or Joe's Market to still be around tomorrow. If you want Joe's Market to stay in business, buy Joe's stuff, even if it costs more. Wal-Mart then wouldn't have any money, and no one would feel sorry for "bullied" suppliers because the bully would have empty pockets.

That's the opposing argument, now here's reality: people buy cheap socks at Wal-Mart and expensive pants at Saks Fifth Avenue. People buy cheap cereal at Wal-Mart but expensive produce at health food stores. Not many people buy luxury-priced everything and not many people buy cheap-priced everything. I personally have never met anyone who falls into either category (not even homeless people, and yes I've known a few). Inexpensive and pricy are two sides of the same coin, not opposing forces locked in mortal combat.

It all boils down to what Steven Landburg wrote in The Armchair Economist- "people respond to incentives." If there's an incentive to look at Internet porn, or to buy a cheap shirt, or to buy a cheap book on marketing, then there will be people likely to do so. But other people (and sometimes the very same people) also have incentives to pay a premium for prostitutes, haute couture, and higher education. The incentive for one does not necessarily cancel the incentive for the other.

But, to the author's credit, he found someone who actually paid him to write this. He had an incentive to rant because he knew he'd make money by doing so. Nevermind the fact that he can't argue his way out of a wet paper bag.

In conclusion, I will make some recommendations for alternative purchases that are more interesting, better argued, and based on reality rather than a bizarre delusion.

Trading Up: Why Consumers Want New Luxury Goods... And How Companies Create Them by Michael Silverstein, Neil Fiske, and John Butman

Treasure Hunt: Inside the Mind of the New Consumer by Michael Silverstein

Economics in One Lesson by Henry Hazlitt