Importance of Quality
Business: Cambridge International GCSE (2027 Exams), topic 4.3.1
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 companies 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 companies 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 company 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.
Low quality is costly - 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.
Test yourself on Importance of Quality
What determines the quality of a product or service?
Which of the following is not usually a consequence of poor quality?
Why is quality important for businesses?