6.2.4
Evaluating TQM
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Benefits of Maintaining High Quality
High quality can lead to additional sales. If businesses compete on quality (as well as price) then keeping quality high could increase a business' sales. They may attract more new customers and existing customers may be more satisfied and buy the product again (becoming repeat customers).
Image/reputation
- When customers are satisfied with a product’s quality, they view the business and the brand as being a high quality brand.
- This positive reputation can win more customers and let the business charge a higher price.
Higher price
- Having a high quality product means that a business is able to charge customers more for the product.
- Customers are often willing to pay a premium for a good product. Consumers pay a lot of money for Apple products like the MacBook laptop computer and the iPhone because they are perceived as very high quality.
- Being able to charge a higher price means a business is able to earn more profit (providing the costs of TQM aren’t too much).
Avoid product recalls
- If a business has a high quality product, it is unlikely to have to recall it for quality or safety issues, like Volkswagen did with their cars in 2015.
Costs of Maintaining High Quality
There are some costs of maintaining higher quality products and services:
Inspection costs
- There are costs associated with inspecting and identifying quality problems throughout the production process.
Staff training
- It costs businesses money to train employees and get them to embrace a culture of quality (TQM).
Provision of services
- Providing services like customer service to ensure high quality will cost the business money.
1Exploring Business
1.1Features of Business Organisations
1.2Organisation of Businesses
1.3Business Environment
1.3.1External Influences1.3.2Political & Legal Change1.3.3Economic Environment1.3.4Social & Technological Environment1.3.5Lifestyle & Technological Environment1.3.6Corporate Social Responsibility1.3.7The Competitive Environment1.3.8Innovation1.3.9Risk & Uncertainty1.3.10Porter's Five Forces1.3.11SWOT 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 Influences1.3.2Political & Legal Change1.3.3Economic Environment1.3.4Social & Technological Environment1.3.5Lifestyle & Technological Environment1.3.6Corporate Social Responsibility1.3.7The Competitive Environment1.3.8Innovation1.3.9Risk & Uncertainty1.3.10Porter's Five Forces1.3.11SWOT 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
Practice questions on Evaluating TQM
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