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The customer, the customer and the customer

Quality can be defined by specifications set out by the customer, or defined by legal standards; minimum quality standards laid out in the laws of the country.

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Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for.

Peter Drucker

There are a variety of perspectives that can be taken in defining quality. One view of quality is that it is defined entirely by the customer or end user, and is based upon that person's evaluation of his or her entire customer experience. So quality is a about the 'whole package' not just the product itself, starting with the first encounter with the firm, and extending to the delivery of the product and then to after purchase communications and service.

A more recent definition of quality deriving from Joseph Juran's 'fitness for intended use' says that quality is 'meeting or exceeding customer expectations'.

One measure of quality is the achievement of an ISO standard. The International Standards Organisation (ISO), a non-governmental organisation, is a federation of standards setting bodies with members representing some 163 countries. The ISO 9000 family of standards refers to quality management systems designed to help organisations ensure they meet the needs of customers and other stakeholders. The first principle of its quality management standards identifies a key focus on customers:

Principle 1: Customer focus

Organizations depend on their customers and therefore should understand current and future customer needs, should meet customer requirements and strive to exceed customer expectations.

Key benefits:

  1. Increased revenue and market share obtained through flexible and fast responses to market opportunities.
  2. Increased effectiveness in the use of the organization's resources to enhance customer satisfaction.
  3. Improved customer loyalty leading to repeat business.

W Edward Deming, who we look at in greater detail later in this section, wrote that 'quality is defined by the customer'. Deming states that the customer's definition of quality is the only one that matters. The customer experience is defined as the aggregate of all the interactions that customers has with the organisation. However, this requires the firm to identify its customers. As we will see when we discuss the concept of Total Quality Management (TQM), there are, in fact two groupings of customers:

  • External customers usually come to mind first. These are the people outside the organisation who receive goods and services. However, even this requires some clarification. If a firm sells products to a wholesaler, are they the only customer; what about the retailer and the ultimate consumer?
  • Internal customers are often forgotten or taken for granted. In an assembly line operation, the next station downstream is an internal customer. Similarly, the production manager who receives a control report from the financial manager is the financial department's internal customer.

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Rolls Royce, probably the most iconic luxury car manufacturer in the world, was founded on the basis of the utmost quality in all of its operations.

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"Strive for perfection in everything you do. Take the best that exists and make it better. When it does not exist, design it." Sir Henry Royce

The modern Rolls Royce is no longer a car manufacturer, having sold its licence to the car brand to BMW, but the Rolls Royce web site shows the value of their brand. Central to their business is their continuing emphasis on quality in all aspects of its business.

This mission is reflected in this statement on their website:

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'To be Trusted to Deliver Excellence' is our central organising thought. It is what we aspire to become. It is the embodiment of the promise we make to our customers. In today's competitive environment, it is not enough to build great products: our customers are looking to us to deliver the best in service solutions. When we do, we build enduring relationships with our customers, partners and other stakeholders.

There is little doubt that quality is a major ingredient in the purchasing decision, especially in highly competitive markets, where firms are looking to meet and possibly exceed the quality of their rival's products and services.

It is quite common for firms to attempt to differentiate their business by emphasising the importance of quality in its offering, but this is becoming increasingly difficult as more firms recognise its importance to the success of their business. A greater guarantee of success, however, is putting the commitment to quality as expressed in all marketing and corporate literature into practice at the point of delivery to customers; at this point, however, the reality can be somewhat removed from the idealised version expressed by senior management as we will see on the next page.