improving-quality as

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Exam code:7131

The importance of quality

Quality products are those whose characteristics and features satisfy the needs of customers
Customers may consider products or services to be of good quality if they:
- look good and are sold by a reputable business or brand
- are reliable and durable
- are safe and fit for purpose
- receive good customer service, including after-sales service

Many businesses set quality targets to focus staff and resources on meeting customer expectations
- Pizza chain Domino’s sets targets for home deliveries completed within 30 minutes of customers placing an order
  - Customers are fully refunded if their pizza arrives after this time
The quality of a business’s products can provide a competitive advantage
- High levels of quality can be used in promotional activity and provide a unique selling point for businesses in competitive markets
- Successfully developing a USP for quality can ease expansion into new markets as a result of the positive reputation it creates
- Increased finance may be available to fund marketing activity to improve brand recognition and attract new customers
Quality is closely linked to price
- High-quality products can usually command a high price
- Lower-quality products may need to be sold at a discount to persuade customers to buy them

Quality control is a traditional method of checking quality at the end of the production process by using quality inspectors to find faults
It is not possible to achieve perfection in every production process
- E.g. there will always be some variation in terms of materials used, production skills applied or reliability of the finished product

Benefits	Drawbacks
Specialists in quality control check standards Little staff training is needed as inspectors check quality rather than the employees themselves It is an inexpensive and simple way to check that output is fit for purpose	Rejecting finished goods is a significant waste of resources The cause of defects is ignored, so problems may continue There are high costs of scrapping or reworking products

Quality assurance involves inspecting the quality of production throughout the process
- Workers check their own work and, sometimes, the work of others at various stages of production
Some business take a whole-business approach to quality assurance, with systems such as quality circles, benchmarking and total quality management (TQM)

Benefits	Drawbacks
Quality issues are identified early, so products may be reworked rather than rejected The cause of defects is the focus, so future quality issues may be prevented	Staff training and a skilled workforce is required, so labour costs may be increased Reworking may lengthen the production process

The quality of a business’s products can provide a competitive advantage
- Unit costs are likely to be low if a business effectively manages quality
  - Low costs may allow a business to reduce its selling price to better compete with or undercut its rivals
- High levels of quality can be used in promotional activity and provide a unique selling point for businesses in competitive markets
- Successfully developing a USP for quality can ease expansion into new markets as a result of the positive reputation it creates

Benefit	Explanation	Example
Happier, more loyal customers	Good‑quality products meet needs the first time, so buyers come back and recommend the brand	UK retailer John Lewis often tops customer satisfaction polls; shoppers keep coming back because they trust the store’s consistent product quality and service standards
Ability to charge premium prices	Strong quality justifies a business achieving higher profit margins	Apple’s high‑quality design keeps iPhone prices far above rivals yet sales stay strong
Lower long‑term costs	Fewer defects mean less scrap, reworking of products and returns	When General Electric introduced Six Sigma, it cut defects so much that the company saved billions of dollars on wasted materials, rework and warranty claims
Access to new markets	Quality certifications such as ISO 9001 mean businesses can apply for valuable contracts and export deals	GFM Holdings, an Essex‑based business, won a local council contract to manage public buildings when it achieved ISO 9001 certification
Competitive edge and brand reputation	Reliable quality helps a firm to stand out in crowded markets and build a reputation that is hard to copy	Toyota vehicles are well known for lasting a long time with few breakdowns, which means buyers choose its models over dozens of rival brands, even if the price is slightly higher

High up‑front and ongoing quality management costs
- Small firms often struggle to pay for staff training, better materials and certification fees
Staff or union resistance to new quality systems
- Changing routines and adding checks can meet resistance from workers, slowing down their introduction
Customer price sensitivity
- Better quality can push costs and, consequently, prices up
- Price‑sensitive shoppers may switch brands
Strain on resources
- If funds are scarce, pushing for higher quality can overstretch staff and cut service levels