Market Forces Vs Product Performance



August 2009

I had three interesting interactions recently on FRP products and their market prices. One of the new users of composites told me that he received four quotations from four FRP suppliers and the prices quoted by them were so varying that he could not decide which quotation is correct. How can there be such wide variations in price? Answer is simple.

Another case is that of pipes and vessels that are in constant contact with water. When such products, designed for 50 years life, is made with the cheapest general purpose resins in the market, how one can say that they will last for 50 years. Similarly, if the wall thickness is reduced from what is required to make the product safe and durable, how can it give the required reliability? On enquiry, I was told that they had to do it to remain competitive.

A raw materials dealer told me that he has good customers and 'bad customers and he caters to them accordingly with good and bad materials. He pleases both and gets his share of profit.

Theses are typical problems prevalent in composites industry. Similar problems do exist in other industries too and also in composites industries world over. The reason quoted in all these cases is that the market wants it or the market forces me to do it. In a market, the user is the one to really exert force. A user may like to get the product cheap, but may not force to reduce product quality. The force therefore is coming from within the industry itself. It is the “mad-mad-mad” rush to grab the limited order offering the lowest cost even cutting the quality. In a growing industry, it is in a way equivalent to cutting the branch on which one sits.

In mechanics, we say that there should be a reaction to every force for bringing equilibrium. It applies to industry also. The reaction forces in industry can come from law enforcement, customers' reaction and from forces within the industry itself. Customers' adverse reaction will be to avoid such products and it can kill the industry. Law enforcement has its own limitations.

Ultimately, the resistance to market forces has to come from within the industry itself. For a body force in mechanics, it is ideal to have reaction built up in every element. Otherwise, distortions can occur within the body creating stresses and strains. Similarly, each industry has to have its own resistance to the market forces built up within. That will avoid the stresses and strains within the industry as a whole.

If this is done, there is no need for adverse user reactions or even law enforcement. Can it happen?

   
Dr. N.G. NAIR
Honorary Editor