Satisfaction will also depend on product and service quality. What exactly is quality? Various experts have defined it as â€œfitness for useâ€? conformance to requirements, â€œfreedom from variation and so on. We will use the American Society for Quality Controlâ€™s definition: Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.
This is clearly a customer centered definition. We can say that the seller has delivered quality whenever the sellerâ€™s product or service meets or exceeds the customersâ€™ expectations. A company that satisfies most of its customersâ€™ needs most of the time is called a quality company, but it is important to distinguish between conformance quality and performance quality (or grade). A Lexus provides higher performance quality than a Hyundai: The Lexus rides smoother, goes faster, and lasts longer. Yet both a Lexus and a Hyundai can be said to deliver the same conformance quality if all the nits deliver their respective promised quality.
Total quality is the key to value creation and customer satisfaction. Total quality is everyoneâ€™s job, just as marketing is everyoneâ€™s job.
Marketers who donâ€™t learn the language of quality improvement manufacturing, and operation will become as obsolete as buggy whips. The days of functional marketing are gone. We can no longer afford to think of ourselves as market researchers, advertising people, direct marketers, strategists — we have to think of ourselves as customer satisfiers — customer advocates focused on whole processes.
Marketing managers have two responsibilities in a quality-centered company. First, they must participate in formulating strategies and policies to help the company win through total quality excellence. Second, they must deliver marketing quality alongside production quality. Each marketing activity — marketing research, sales training, advertising, customer service, and so on — must be performed to high standards.
The quest to maximize customer satisfaction led some firms to adopt total quality management principles. Total quality management (TQM) is an organization-wide approach to continuously improving the quality of all the organizationâ€™s processes, products, and services.
According to GEâ€™s former chairman, John E Welch Jr., â€œQuality is our best assurance of customer allegiance, our strongest defense against foreign competition, and the only path to sustained growth and earnings. The drive to produce goods that are superior in world markets has led some countries and groups of countries to recognize or award prizes to companies that exemplify the best quality practices (e.g. the Deming Prize in Japan, the Malcolm Baldridge National Quality Award in the United States, and the European Quality Award).
Product and service quality, customer satisfaction, and company profitability are intimately connected. Higher levels of quality result in higher levels of customer satisfaction, which support higher prices and lower costs. Studies have shown a high correlation between relative product quality and company profitability.