One important dimension of quality is how well a product meets the specific needs of the buyer. When a product falls short of performance expectations, its poor quality is readily apparent. However, it is less apparent but nonetheless true that a product that exceeds performance expectations is also of poor quality. A product whose design exceeds the wants of the buyer’s intended use generally has a higher price, which reflects the extra capacity. Quality for many goods is assessed in terms of fulfilling specific expectations – no more and no less. Thus a product that produces 20,000 units per hour when the buyer needs one that produces only 5,000 units per hour is not a quality product, in that the extra capacity IS unnecessary to meet the buyer’s use expectations. Indeed, this is one of the key issues facing personal computer makers. Many business buyers are asking the question, do we really need the latest $1,000 PC for everyone? And more and more often the answer is no, the $500 machines will do just fine.
This price quality relationship is important factor marketing in developing economies, especially those in the first three stages off economic development described earlier. Standard quality requirements of industrial products sold in the US market that command commensurately higher prices may be completely out of line for the needs of the less developed markets of the world. Labor saving features are of little importance when time has limited value and labor is plentiful. Also, of lesser value is the ability of machinery to hold close tolerances where people are not quality control conscious, where large production runs do not exist and where the wages of skillful workers justify selective fits in assembly and repair work. Features that a buyer does not want or cannot effectively use do not enhance a product’s quality rating.
This does not mean quality is unimportant or that the latest technology is not sought in developing markets. Rather, it means that those markets require products designed to meet their specific needs, not products designed for different uses and expectations, especially if the additional features result in higher prices. This attitude was reflected in a study of purchasing behavior of Chinese import managers, who ranked product quality first, followed in importance by price. Timely delivery was third and product style / features ranked 11th out of 17 variables studied. Hence a product whose design reflects the needs and expectations of the buyer – no more no less – is a quality product.
The design of a product must be viewed from all aspects of use. Extreme variations in climate create problems in designing equipment that is universally operable. Products that function effectively in western Europe may require major design changes to operate as well in the hot, dry Sahara region or the humid, tropical rain forests of Latin America Trucks designed to travel the superhighways of the United States almost surely will experience operational difficulties in the mountainous regions of Latin America on roads that often barely resemble Jeep trails. Manufacturers must consider many variations in making products that will be functional in far flung markets.
In light of today’s competition a company must consider the nature of its market and the adequacy of the design of its products. Effective competition in global markets means that over engineered and over priced products must give way to products that meet the specifications of the customer at competitive prices. Success lies in offering products that fit a customer’s needs – technologically advanced for some and less sophisticated for others, but all of high quality. To be competitive in today’s global markets, the concept of total quality management (TQM) must be a part of all MNCs management strategy and TQM starts with talking to customers. Indeed more and more frequently industrial customers, including foreign ones, are directly involved in all aspects of the product development process, from generating new ideas to prototype testing.