What do we mean by quality?

• A product or service is of good quality if it meets the needs and expectations of the customer

Measures of quality:

• Tangible:

  • Reliability

  • Functions and features

  • Support levels and standards

  • Cost of ownership (e.g. repairs

• Intangible:

  • Brand image

  • Exclusiveness

  • Market reputation

Why quality is so important in business:

• Markets are highly competitive:

  customers are more

  • Knowledgeable and demanding

  • Prepared to complain about poor quality

  • Able to share information about poor quality (e.g via email or social networking)

• If a business can develop a reputation for high quality, then it may be able to create an advantage over its competitors

Business benefits of greater quality:

• Customer satisfaction

• Repeat purchase

• Customer recommendation

• Lower marketing costs

• Higher customer loyalty

Quality and competitiveness:

• Fewer businesses are competing solely on price

• At a similar price, the higher-quality product is likely to win

• Quality can enable a business to differentiate its product from the competition

Businesses using Quality as a source of Competitive Advantage:

• Apple

• Starbucks

• BMW

• Disney

• Waitrose

Quality is not just about the product- it includes the whole customer experience:

• Buying process

• Product reliability

• Cost of Ownership

• After-sales service

Businesses competing using both low price and high quality:

• Premier Inn

• Ikea

• Aldi

• Nando’s

• Kia