Thursday, August 17, 2023

The Triumph of Marketing

 The Triumph of Marketing?

Perhaps it's a case of getting old? Is it just Zio Lorenzo who sees marketing prowess overcoming pretty much everything else when it comes to selling consumer products?

Is Apple stuff really superior to the competitors? I-this and I-that have cult followings with premium prices paid for stuff that's made in the same Asian factories as the competitors. VHS killed Betamax not because of superior technology, but because the VHS folks managed to get more stuff to watch on their technically inferior format than was available on Beta.

In the world of cycling, this is playing out all over, perhaps the best example is SRAM. Zio was reminded of this when a popular and respected online video maker said, "SRAM is evil" the other day. Another listed SRAM's mechanical "Double-Tap" mechanical shifting as one of his most hated products as a pro mechanic. Zio has had little experience with it, notably when a CycleItalia client showed up with it on his personal bicycle.

The client bragged about these components from an "American" company, seemingly oblivious to the fact the stuff is actually made in low-wage Asian factories. Zio clicked through the gears on the workstand and then rode with the client a time or two. The quality (or lack) of the shifting on the workstand combined with the clunky noises it made had him wondering how long this company would remain in business? In his opinion it was junk!

The same kind of junk he remembered from his early bike shop days. SRAM (a made-up name that some say should have been SCAM) began with cheap, plastic "Grip-shift" shifters. You can read their history here.

These cheap shifters came on low-priced MTB's in the late 1980's. Their plastic teeth sort of/kind of made index shifting work on these "department-store" quality bicycles, none of which were sold at the shop Zio worked in. The shop owner shared his low opinion of these parts, which was reinforced whenever we tried to work on them.

It became clear that bicycle company product-managers spec'd these parts for one reason - they were cheap. They could spec a Shimano rear derailleur and then slap "Shimano-equipped" stickers on the bike without being accused of fraud, even if that rear derailleur was the only Shimano part on the bike. But using Grip-shift instead of Shimano's much more expensive shift/brake levers these cheap plastic shifters could be combined with really cheap, low-quality brake (Chang-star anyone?) components and save the bike companies a ton of money! And since so few of these bikes were likely to be ridden much, the terrible quality of the parts would never be noticed. But some did get ridden only to fail and be rolled into our shop for repairs. It wasn't long before we not only didn't sell bikes like these, we also stopped working on them. "Trying to make chicken soup out of chicken s__t" wasn't worth it.

The part in the photo at the top of this post retails for barely $10 in 2023! How much can it cost to make? But if you sell millions of them to equip all the department-store MTB's in the world, you're talking some real profits and saving the bike makers a boatload of money! Profits flowed-in. SRAM soon set their sights on replacing those Shimano rear derailleurs too. Again the bike makers saved a ton of dough and SRAM made a ton of money,

Soon the buying started - why develop your own stuff if you can just buy other companies and slap your name on their stuff? Sachs components and Sedis chains were soon acquired and their products re-branded. Did quality improve? Most mechanics Zio knew said no. Same for Rockshox and later Zipp, in these cases quality went way down, perhaps due to having the stuff made in low-cost Asian factories?

SRAM also bought a brake company called AVID which many bike shop wrenches Zio knew described as needing an "O" after the "V". Soon SRAM was offering complete component groups. With all or most of it made in Asia it was perfect to slap onto all the bicycles made there, undercutting Shimano. Sales soared.

Quality however, didn't. Bike shop techs Zio would talk to hated this stuff! They said it took way too much fiddling around to set-up and wouldn't stay adjusted for long. Hydro brakes that worked OK after fiddling in the shop squeaked or rubbed if the customer took a wheel off or left the bike in a hot car for a few hours. Cheaply molded parts simply broke.

But when the parts failed SRAM replaced 'em with a no-questions-asked warranty, shipping-out replacement parts overnight! With the cost of these low-quality parts vs the retail price they could afford it! They could also afford to pay (bribe?) pro teams to use their components. With endorsements like this, it was clear marketing was driving the entire enterprise rather than engineering or manufacturing excellence.

This was crystal clear in the tech seminars Zio attended over the years. He'd love to have back the hours wasted in SRAM's conference rooms listening to sales flacks pretending to be engineers extolling the virtues of poorly-made, poorly engineered "designed-to-sell" components. The more he "learned" the less he thought of SRAM and their products.

Zio notes when SRAM cut back on sponsoring pro teams awhile ago the ones no longer getting paid switched to other suppliers even if they had to buy the parts out of their own budget. Recently they've ramped-up the spending again, becoming supplier to Jumbo-Visma. You might remember the scenes of Sepp Kuss swapping dead batteries while on his bike in the race or Primoz Roglic's chain falling off this season?

But marketing (aided by bribery) triumphs over all it seems. Campagnolo used to pay teams to use his products back-in-the-day, before they became the world-standard used by almost everyone. Shimano copied (and improved upon) them, but had to pay to get teams to use their stuff too until it replaced their Italian rival to become the current world-standard. But unlike SRAM these components were generally well-engineered and high-quality.

Zio bets as soon as SRAM stops writing the fat checks teams will return to Shimano but we could see another VHS killing Betamax if SRAM's marketing prowess reigns supreme. Will marketing triumph or not?

HERE's an example of not so swift marketing.

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