6.2.1
Importance of Quality
The Importance of Quality
The Importance of Quality
The two main aspects of a product or service that customers use to make decisions are price and quality. Quality is therefore important for a business that wants to be profitable and compete with rivals (competitors).


What determines quality?
What determines quality?
- Quality is determined by lots of of factors such as:
- The quality of the materials that are used.
- The quality of the production process.
- The style of a product.
- The durability, speed and quality of a service.


Customer expectations
Customer expectations
- When customers buy a product they have expectations about the quality of the product and service.
- For businesses that produce goods, the goods need to be of a certain quality. The product should not break after one use (unless it is a disposable item) and it should be fit for purpose.
- For businesses that provide a service, a customer will have expectations about the benefits of the service and the time it will take for it to be completed.


Customer service
Customer service
- For all businesses, it is important to have good quality customer service. If a business fails to deliver a good quality of customer service, customers may buy products and services from competitors instead.


Customer returns
Customer returns
- There are costs associated with returns:
- If a customer is unhappy with a good or service then they may be able to return it for a refund. This often means that a product is wasted and the costs of processing a return may be high.
- Businesses like Asos offer free 28 day returns for customers. This is likely to be one of Asos’ largest costs.
- In 2016, the Financial Times reported that it cost retailers £60bn each year to process customer returns.


Lost customers
Lost customers
- Customers who think a business does not deliver high quality products or services are less likely to purchase from that business again.


Product recalls
Product recalls
- A product may be found to be unsafe for use or may violate legal requirements. A business may be forced to recall all products like this.
- In 2015, Volkswagen was found to have cars that exceeded the legal limit for emissions. This meant they had to recall 11 million cars worldwide at a great cost to the business.
1Exploring Business
1.1Features of Business Organisations
1.2Organisation of Businesses
1.3Business Environment
1.3.1External Influences
1.3.2Political & Legal Change
1.3.3Economic Environment
1.3.4Social & Technological Environment
1.3.5Lifestyle & Technological Environment
1.3.6Corporate Social Responsibility
1.3.7The Competitive Environment
1.3.8Innovation
1.3.9Risk & Uncertainty
1.3.10Porter's Five Forces
1.3.11SWOT Analysis
2Marketing Campaigns
2.1Marketing
3Business Finance
3.1Sources of Finance
3.2Financial Planning
3.3Financial Statements
4International Business
4.1Globalisation
4.2International Business
4.3International Economic Environment
4.4Factors Affecting International Business
5Principles of Management
5.1Management & Leadership
5.2Theories of Motivation
6Business Decision Making
6.1Business Principles & Practices
6.2Quality Management
6.3Human Resources
6.4Documents & Business Decisions
Jump to other topics
1Exploring Business
1.1Features of Business Organisations
1.2Organisation of Businesses
1.3Business Environment
1.3.1External Influences
1.3.2Political & Legal Change
1.3.3Economic Environment
1.3.4Social & Technological Environment
1.3.5Lifestyle & Technological Environment
1.3.6Corporate Social Responsibility
1.3.7The Competitive Environment
1.3.8Innovation
1.3.9Risk & Uncertainty
1.3.10Porter's Five Forces
1.3.11SWOT Analysis
2Marketing Campaigns
2.1Marketing
3Business Finance
3.1Sources of Finance
3.2Financial Planning
3.3Financial Statements
4International Business
4.1Globalisation
4.2International Business
4.3International Economic Environment
4.4Factors Affecting International Business
5Principles of Management
5.1Management & Leadership
5.2Theories of Motivation
6Business Decision Making
6.1Business Principles & Practices
6.2Quality Management
6.3Human Resources
6.4Documents & Business Decisions
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