Quality – introduction
What is quality?
Quality is important to businesses but can be quite hard to define. Customers want quality that is appropriate to the price that they are prepared to pay and the level of competition in the market.
Key aspects of quality for the customer include:
- Good design – looks and style
- Good functionality – it does the job well
- Reliable – acceptable level of breakdowns or failure
- Durable – lasts as long as it should
- Good after sales service
- Value for money
‘Value for money’ is especially important, because in most markets there is room for products of different overall levels of quality, and the customer must be satisfied that the price fairly reflects the quality. For example, the car maker Skoda is now part of the Volkswagen group which is well-known for quality cars, but prior to this, Skoda owners were amongst the most loyal because even though the cars fell short of most others in style, comfort and performance, they were tough, reliable and very good value for money.
Some products and services are marketed as ‘basic’, having none of the extra features and benefits of more expensive alternatives. Good examples would be Easyjet and George at Asda clothing ranges. Even though it may be ‘low quality’ in terms of style or features, these products still give good value for money for their overall level of quality.
For the firm, good design is fundamental, so that the product can be produced efficiently, reliably and at the lowest possible cost. Also see the revision note on Quality Improvement. If products are being made for other, large firms, then the quality standards may be dictated by the firm placing the order.
Why is quality important?
Quality helps determine a firm’s success in a number of ways:
- Customer loyalty – they return, make repeat purchases and recommend the product or service to others.
- Strong brand reputation for quality
- Retailers want to stock the product
- As the product is perceived to be better value for money, it may command a premium price and will become more price inelastic
- Fewer returns and replacements lead to reduced costs
- Attracting and retaining good staff
These points can each help support the marketing function in a business. However, firms have to work hard to maintain and improve their reputation for quality, which can easily be damaged by a news story about a quality failure. See the Tutor2U Business Blog story about Cadburys and salmonella. (LINK)
How is quality measured?
Aside from achievement of standards like BSI, firms can measure quality aspects such as:
- Failure or reject rates
- Level of product returns
- Customer complaints
- Customer satisfaction – usually measured by a survey
- Customer loyalty – evident from repeat purchases, or renewal rates
A detailed analysis of areas such as these would be an important part of Quality Improvement – see the separate revision note for more details
Some areas for evaluation
- Quality is subjective, it is a matter of personal opinion and what constitutes an acceptable level of quality will vary from one individual to another.
- Not all aspects of quality are tangible – for example the degree of assurance given by a firm’s name or reputation can be very important even though it is hard to measure.
- Quality is always evolving because of things like improved technology, better materials, new manufacturing techniques and fresh competitors. No firm can afford to stand still as far as quality is concerned.
- Whilst controlling quality has benefits to the firm, it can also be costly to do, so it is important that the benefits outweigh the costs in the long term.
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