20 Quality: Various Definitions and Importance

Vikas Singla

20.1 OBJECTIVES

This chapter would help students to understand:

Meaning of quality
Importance of defining quality from customer perspective
Various dimensions of quality

20.2 INTRODUCTION

Businesses world over strive very hard to provide quality products and services to consumers. A good quality product is considered as granted by the consumer. Success of a business depends on reading and understanding consumers’ perception regarding quality of product or service provided by the company. The aim of the company is to bridge any gap between expectations of consumer regarding quality of a product and its performance. The first step in bridging such a gap is to identify the factors on which quality is being measured. For instance, how does quality of a hospital is being measured? A hospital receives patients with different illnesses and financial positions. Should a hospital be considered as providing good quality of service if it is able to cure majority of patients but at high cost or should a hospital be considered good if it treats patients at lower cost without guarantying efficacy of treatment. Same problem is being faced by private and public hospitals. Government run public hospitals might be providing similar services and treatments as compared to private specialty hospitals but they do so at a fraction of a cost. Do patients consider them to be providing quality services or they consider private hospitals to be better in providing clinical services? Thus, emphasis should be to identify how a consumer measure quality of a product or a service. Similarly how does quality of a pen is measured. Should it be measured in terms of its longevity, its price or its performance? This chapter specifically discusses various consumer oriented definition of quality.

20.3 IMPORTANCE OF QUALITY

Manufacturing good quality products help businesses to achieve: low production cost and increased market share by having more satisfied customers. By applying good quality measures a company is able to produce products which conform to established quality standards and does not find need to rework or reproduce failed products. For instance, a burger manufacturer has established a quality standard regarding size of its potato patty. Now if all manufactured potato patties conform to established size because of strict quality procedures then company would get all patties of same size and does not have to remanufacture or reproduce again. Patties manufactured of irregular sizes would entail its reproduction increasing cost of raw material, labor and equipment. Also, it would have led to increased wastage. Thus, established quality standards would help in reduction of operation cost. Secondly, a quality product would help to satisfy needs of customers. A product or service satisfying the needs of customers would encourage them to buy or use them again. Such satisfied customers would also encourage other individuals to buy or use similar product or service. For instance, Maruti Alto customers who measure quality in terms of consistence performance and price would encourage other individuals to buy same car if all of them measure quality in those parameters. Similarly a luxury watch maker provides a quality watch in terms of luxury rather than on price. So, a company providing quality products would help in increasing their market share and in turn profits.

Quality is also used by companies as a strategic tool in beating their competition. A McDonald burger records higher sales than its competitor like KFC or Burger King might not be because of taste but because of price. McDonald has been able to identify that customers of a particular kind would like to have burger from an international outlet at a low price without giving very high importance to taste. Thus, in this case quality of a product is measured in terms of price and not on taste. Quality is predominantly measured in terms of design and consistent performance. To beat the competition a company adopts either of one of these measures of quality. Ready-made clothing, small cars, McDonald burgers are good examples of goods adopting consistent performance criteria of quality. Such criteria of quality is selected by companies providing one size fits all or standardized products. There is no variety and so manufacturer keeps on producing only a particular type of product or service. Such products are of very high quality in terms of their consistence performance as manufacturer in producing one type of product becomes an expert in such operation and produces them effectively at low cost. Thus, a company which has adopted a strategy to beat their competition by providing low cost product/service would provide products which perform consistently at measured level of performance. On the other hand a barber shop, clothes stitched from tailors, luxury cars etc. are good examples of quality measured in terms of design. Providing customized design products and services increases the cost but fulfills varied needs of customers. Most of the service firms such as banks and luxury product manufacturers tend to beat their competition by adopting such a strategy of enhancing design quality.

Thus, provision of quality and services is important for business in order to:

Reduce production costs
Increase market share and profits
Beating competition

As discussed the first step involved in achieving of these objectives is to identify dimensions on which quality is measured from customers’ perspective. This has been discussed in the following section.

20.4 DIMENSIONS OF QUALITY

In general quality is defined as conforming to defined standards. But most important question is to define these standards. Should a company define these standards from managements’ perspective or from the perspective of the user? An air conditioner should perform the function of cooling, providing clean air, consuming less electricity at reasonable cost. Now these dimensions were identified from managements’ perspective or does really customer would measure quality of an air conditioner on these dimensions. In case of services how for instance services of a telecom service provider is measured. Does a customer measures it in terms of price or consistent service i.e. in terms of uninterrupted calls? Thus, it becomes increasingly important for a product manufacturer or a service provider to firstly identify the dimensions on which quality of their product or service would be measured. Following are some such dimensions:

Performance: A customer may consider quality of a product or service in terms of its intended function. A pen’s function is to write, an air conditioner should cool, a printer must print etc. The fulfillment of purpose for which a product is purchased is the primary and most important dimension of quality. Failure of performing its intended function would make a product of bad quality and would have a negative effect on its sales. A printer advertised as able to print 100 prints in a minute should be able to perform this function effectively. A bank projecting itself as providing 24*7 services should perform such a function.

Psychological Impressions: Sometimes customers create some impressions regarding performance of a product or service. For instance, suppose a printer manufacturer advertised printing of 100 copies in a minute. Customers might also make an impression that printer would also provide 100 colored copies in a minute. This would hamper quality measurement of printer manufacturer. Thus, it is important to advertise or project accurate performance of a product. Quality of a product or service is sometimes also measured by aesthetics, physical environment and image of service provider. A shopping mall with its ambience attracts lot of customers but because of highly priced product does not convert that attraction into sales. A restaurant providing food services in neat, clean and hygiene fashion would be termed as providing better quality than otherwise.

Features: How does smart phones provided by Apple and Samsung are different? In addition to their core function of providing communication experience such phones’ quality is measured in terms of the features they provide. One providing extra features at similar cost might be considered as provider of better quality products. Service providers such as banks, restaurants etc. focus heavily on providing extra features. A restaurant in addition to providing food and seating facilities also provide space for conduct of parties. A vehicle repair service centre provides pick and drop facility for the vehicle. Features in addition to the core function of a product are sometimes considered as support or peripheral services attached to product. An insurance company advertise as providing a helpline customer care centre at free of cost in addition to insurance services. Such features add to measurement of quality when lot of companies is providing similar kind of products. In face of such intense competition customers are attracted by providing extra features. Sometimes then quality is measured in terms of these extra features. For instance, a digital cable service provider was providing quality broadcast services which were its core function. But its support service was found to be ineffective in solving a customers’ problem. So, customer criticized the service of that provider because of poor quality of peripheral or support services.

Reliability: Reliability is defined as provision of consistent performance over long period of time. A car would always run, a pen when bough would always write, a biscuit would have unbroken biscuits etc. are some examples of reliability of a product. A product providing variable service every time it is used is considered to be of bad quality. An air conditioner sometimes cools and sometimes does not would affect quality measurement. Reliability also indicates estimated time of failure of a product or service. A vehicle owner is provided information that after particular number of kilometers that vehicle should be serviced otherwise chances of failure increases. A CFL bulb is advertised as having less failure rate or more expected life that an incandescent lamp. Problem of reliability or consistent performance is quite apparent in case of services. Because of nature of services a service provider might provide different service every time. A teacher might deliver the same lecture to different classes in different ways. So, it becomes difficult to measure quality of service in terms of reliability. A service varying significantly from its established norm would be considered of poor quality. For instance, a drive through restaurant fulfills the order on an average of three minutes. But if it takes sometimes invariably long such as ten minutes and sometimes fulfills the order in less than a minute then its service cannot be considered as reliable.

Value: Consumers evaluate quality of products in terms of performance of a product or service in relation to price paid for it. Price of product is related with its quality. Generally higher the price more is the perceived quality and vice versa. For instance, an apparel bought from an unbranded retail store at low price if perform its intended purpose for a long period of time would be considered as of higher quality. Value assigned to a product or service depends on perceptions of customer. A road side eatery’s quality of food if measured in terms of price would be considered of higher value than of a restaurant. Value as a measure of quality becomes important in price- sensitive markets. In such markets consumers mostly evaluate quality of a product or service in terms of its performance of intended function with expectations of its price. This is one of the prime reasons that in developing countries most of the companies target consumers on the basis of price of product.

20.5 DIFFERENCE BETWEEN MEASUREMENT OF PRODUCT AND SERVICE QUALITY

Efforts in defining and measuring quality have come largely from the goods sector.
Some definitions of product quality are: “zero defects-doing it right the first time”. “conformance to requirements.” “counting the incidence of “internal”‘ failures and “external” failures.

Knowledge about goods quality, however, is insufficient to understand service quality.

20.4.1 Characteristics on which service quality differs from product quality

First, most services are intangible: Because they are performances rather than objects precise manufacturing specifications concerning uniform quality can rarely be set. Most services cannot be counted, measured, inventoried, tested, and verified in advance of sale to assure quality. Because of intangibility, the firm may find it difficult to understand how consumers perceive their services and evaluate service quality
Second, services, especially those with high labor content, are heterogeneous: their performance often varies from producer to producer, from customer to customer, and from day to day. Consistency of behavior from service personnel (i.e., uniform quality) is difficult to assure because what the firm intends to deliver may be entirely different from what the consumer receives.
Third, production and consumption of many services are inseparable. As a consequence, quality in services is not engineered at the manufacturing plant, and then delivered intact to the consumer. In labor intensive services, for example, quality occurs during service delivery, usually in an interaction between the client and the contact person from the service firm.
The service firm may also have less managerial control over quality in services where consumer participation is intense (e.g., haircuts, doctor’s visits) because the client affects the process. In these situations, the consumer’s input (description of how the haircut should look, description of symptoms becomes critical to the quality of service performance.

20.5 SERVICE QUALITY DETERMINANTS

Aspects of service quality can be categorized into the 10 service quality determinants and can be arrayed along a continuum ranging from easy to evaluate to difficult to evaluate.

Reliability: involves consistency of performance and dependability. It means that the firm performs the service right the first time. It also means that the firm honors its promises.
Responsiveness concerns the willingness or readiness of employees to provide service. It involves timeliness of service, mailing a transaction slip immediately, calling the customer back quickly, giving prompt service (e.g., setting up appointments quickly).
Competence means possession of the required skills and knowledge to perform the service. It involves: knowledge and skill of the contact personnel; knowledge and skill of operational support personnel; research capability of the organization, e.g., securities brokerage firm.
Access involves approachability and ease of contact. It means: the service is easily accessible by telephone; waiting time to receive service (e.g., at a bank) is not extensive; convenient hours of operation; convenient location of service facility.
Courtesy involves politeness, respect, consideration, and friendliness of contact personnel (including receptionists, telephone operators, etc.). It includes: consideration for the consumer’s property; clean and neat appearance of public contact personnel.
Communication means keeping customers informed in language they can understand and listening to them. It involves: explaining the service itself; explaining how much the service will cost; explaining the trade-offs between service and cost; assuring the consumer that a problem will be handled.
Credibility involves trustworthiness, believability, honesty. It involves having the customer’s best interests at heart.
Security is the freedom from danger, risk, or doubt. It involves: physical safety, financial security, confidentiality.
Understanding/Knowing the customer involves making the effort to understand the customer’s needs. It involves: learning the customer’s specific requirements; providing individualized attention; recognizing the regular customer.
Tangibles include the physical evidence of the service, physical facilities; appearance of personnel; tools or equipment used to provide the service; physical representations of the service, such as a plastic credit card or a bank statement; other customers in the service facility.

20.6 QUALITY MEASURES IN ONLINE SERVICES

These customer driven measures of quality are also used to evaluate or measure quality of online services. Online retail stores are growing exponentially and customer has to select one of the stores for buying purposes. Each store might be providing similar kind of products. So an online store would tend to provide better quality services to attract customers. Online services also use similar measures of quality as brick and mortar stores. Some of them have been discussed below:

Convenience of use: A web page which is difficult to navigate and take times to search, find and buy would be rated as of poor quality. A web page which is easy to use and navigate would be able to attract more customers. Also accessing information about a particular product should be easily available. For instance a web site selling mobile phones providing information about features of such a product would be considered as of higher quality. Product Availability: Online retail stores advertise to sell numerous products. By getting attracted towards buying from a particular online site a customer should be able to avail that product. If product is out of stock then customer might be unwilling to visit or buy from that store again.

Reliability: Reliability or consistency of operations is evaluated in terms of delivering products at designated time and offering of various payment options. Online stores promise to deliver at customers’ doorstep at designated time period. Customers will repeat purchase from a particular site if delivery of products is performed in a consistent manner. Also, customers can pay for purchase of products from online stores through credit card, debit card, net banking and cash on delivery. Such variety of payment options provided and executed in reliable manner helps in building trust towards services of such stores. Thus, delivering products on time and executing payment as promised helps in building a positive image of quality of such stores.

Serviceability: Online services lack personal contact with customers. A customer buying apparels, shoes etc. cannot feel the products. So, any queries or problems with buying process, information regarding features and performance of product should be resolved through telephone or email services. An online service should be able to reassure customers of their decision of buying online through such services to remove the bottleneck of lack of personal contact.

Value: Online retail stores try to shift customers’ buying pattern from brick and mortar stores to online stores by offering them similar kind of products at lower prices. Variety of products available at prices lower than offline stores enhances the value of offerings of such stores. Value proposition is a major aspect of evaluating quality of such stores.

20.7 SUMMARY

Quality of products and services used by customers is taken as granted. Every product or service purchased and used is considered to provide quality. But different customers define quality in different ways. Individuals can define quality in terms of price of product/service, availability, durability or extra features that it offers. Thus it becomes necessary for a company to understand the measures of quality. For instance, an online service focuses on providing good functional products at low prices whereas a luxury car manufacturer measures quality in terms of features, durability and comfort. Defining quality from customers’ perspective facilitates companies to manufacture or offer products according to those parameters and in turn retain or attract customers.

20.8 REFERENCES/ SUGGESTED READINGS

Chase, B.R., Shankar, R., Jacobs, F.R. and Aquilano, N.J., Operations & Supply Chain Management, 12th Edition, McGraw Hill.
Stevenson, W.J., Operations Management, 9th Edition, Tata McGraw Hill.
Lee J. Krajewski, Operations Management, Prentice-Hall of India, New Delhi, 8th Edition.

20.9 SHORT ANSWER QUESTIONS

1. Quality is defined as conformance to standards set by

(a) producer (b) consumer (c) both

Answer: b

2. Companies are motivated to emphasize on quality because:

(a) It helps to reduce production cost

(b) It helps in increasing market share by having more satisfied customers

(d) All of the above

Answer: d

3. Which of the following are important measures of quality from customer perspective?

(a) Value (b) Reliability (c) Performance (d) All of the above

Answer: d

4. Offline and online companies use similar measures to define quality

(a) True (b) False

Answer: a

20.10 MODEL QUESTIONS

Define quality and its significance for a company as a strategic tool.
Discuss dimensions of quality from customer perspective by taking example from both brick and mortar and online companies.
Why defining quality from customer perspective is so important for a company? Illustrate by taking an example of a bakery shop.