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?

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

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

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

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

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

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

2Marketing Campaigns

2.1Marketing

2.1.1Setting Marketing Objectives

2.1.2Customer Needs

2.1.3The Market

2.1.4Competition & The Market

2.1.5Consumer Behaviour

2.1.6Market Research

2.1.7Forms of Market Research

2.1.8Market Segmentation

2.1.9Cultural & Social Factors in Marketing

2.1.10Promotional Decisions 3

2.1.11Pricing Strategies

2.2Marketing Mix

2.2.1Marketing Mix

2.2.2Product Life Cycle

2.2.3Pricing Decisions & Price Skimming

2.2.4Pricing Decisions & Price Penetration

2.2.5Promotional Decisions

2.2.6Promotional Decisions 2

2.2.7Promotional Decisions 3

2.2.8Market Mapping

3Business Finance

3.1Sources of Finance

3.1.1Internal Finance

3.1.2External Finance

3.1.3External Finance 2

3.1.4Sources of Business Finance

3.2Financial Planning

3.2.1Revenue

3.2.2Costs

3.2.3Cash & Cash Flow

3.2.4Cash & Cash Flow 2

3.2.5Break-Even Analysis

3.2.6Profits

3.3Financial Statements

3.3.1Balance Sheets

3.3.2Income Statements

3.3.3Liquidity

4International Business

4.1Globalisation

4.1.1Growing Economies

4.1.2Specialisation & Trade

4.2International Business

4.2.1Internationalisation

4.2.2International Trade

4.2.3MNCS

4.2.4Conditions that Prompt Trade

4.2.5Assessment of a Country

4.3International Economic Environment

4.3.1Globalisation

4.3.2Factors Contributing to Globalisation

4.3.3Protectionism

4.3.4The EU & the WTO

4.3.5Trading Blocs

4.4Factors Affecting International Business

4.4.1Global Competitiveness

4.4.2Ethics of Global Business

4.4.3Controlling MNCs

4.4.4Cultural & Social Factors in Marketing

5Principles of Management

5.1Management & Leadership

5.1.1Managers

5.1.2Management Theories

5.1.3Managing Organisational Culture

5.1.4Management Style

5.2Theories of Motivation

5.2.1Motivating & Engaging Employees

5.2.2Taylor's Theory

5.2.3Mayo's Theory

5.2.4Maslow's Theory

5.2.5Herzberg's Theory

5.3Managing Change

5.3.1Change

5.3.2Key Factors in Change

5.3.3Scenario Planning

5.3.4Managing Change

5.3.5Managing Strategic Implementation

6Business Decision Making

6.1Business Principles & Practices

6.1.1Influences in External Environments

6.1.2Product Decisions

6.1.3Competitive Environment

6.1.4Corporate Strategy

6.1.5Quantitative Sales Forecasting

6.1.6Legislation

6.2Quality Management

6.2.1Importance of Quality

6.2.2Measuring Quality

6.2.3Total Quality Management

6.2.4Evaluating TQM

6.3Human Resources

6.3.1Contracts

6.3.2Recruitment

6.3.3Training a Workforce

6.4Documents & Business Decisions

6.4.1Sales Forecasts

6.4.2Managing Strategic Implementation

6.4.3Problems with Strategy

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