Quality vs Value vs Utility
I could have written about this at length but I don't have time and I'm feeling the time to say something is now.
I've argued often that the best example of Quality as a differentiator is the mobile industry. Quality: low, price: high, usage growth: exponential!
If you ask the Comms manager what they want from a mobile operator, they'll put quality high up on the list, but it's a red herring. They want quality of service so they get less complaints, in the end they will choose the cheapest option with the most utility (not necessarily equal to features)
You could equate this to low-cost airlines where a businessman will fly the cheaper option if the times suit approximately and it doesn't dump them in a hangar in the middle of nowhere (and they get some credit for choosing the cheaper option!).
Quality only has an impact if all other factors are equal, especially cost, or if utility is severely impacted by a lack of quality. E.g. 6 hour flight delay followed by cancellation and abandonment (n.b. this has happened to me only on 'quality' airlines!)
In services, if Quality >= sufficient then Price/quality -> 0 as quality increases. i.e. doubling the quality will not double the price paid.
The quality of mobile calls shows how low the bar can be in terms of sufficient quality (though perhaps living in thailand where mobile completion rates hovver substantially below 50% might have polluted my memories of mobile use in Europe)
Lack of quality can quickly reduce the price to zero too, if quality is not sufficient. So quality, value and utility are a balancing act, with the only safe way to increase the price paid being to add utility.
Not exactly rocket science, is it?