What Is Quality?
What quality really means in business: meeting customer expectations for a good or a service, the damage that quality problems do to sales and reputation, and how the cost of keeping quality high is weighed against the benefits it brings.
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What do we mean by quality?
Quality means how well a good or service meets the expectations of the customer. A quality product does what it promises, is reliable and is well made, and a quality service is dependable and treats the customer well. Quality is not free: a business has to spend money to keep it high, through checks and training. This module looks at what customers expect, what happens when quality slips, and how a business weighs the cost of maintaining quality against the benefits it brings. It leaves the detailed methods and the problems of growth to the next module.
Quality words to know
Learn these before you weigh up any quality decision. The exam wants you to judge quality against customer expectations and against cost.
The cost against the benefit
Maintaining quality is a decision with two sides. A strong answer weighs the cost of keeping quality high against the benefit it brings for that business.
How to judge quality
To judge quality, start from the customer. Does the good or service meet what the customer expected? If it falls short, think through the consequences, such as lost sales, complaints and damage to reputation. Then weigh the cost of keeping quality high, such as inspection and training, against the benefit it brings for this particular business. Reach a decision rather than listing both sides, because quality is not always worth every cost.
Match the quality problem to its result
- a good breaks soon after it is bought
- a service is delivered late and carelessly
- a batch of products is found to be unsafe
- customers post many poor reviews online
- the customer returns it and asks for a refund
- the customer does not come back again
- the business must recall and replace the batch
- the reputation of the business falls
What does quality really mean?
Which statement best describes what quality means for a business?
- How well a good or service meets the expectations of the customer.
- Simply making the most expensive product possible.
- Making the largest number of products you can.
- Always using the cheapest materials available.
Benefits of maintaining quality
Select the TWO benefits a business gains from maintaining high quality.
- More loyal customers who return
- The ability to charge a higher price
- Quality checks that cost nothing
- A reputation that no longer matters
Work out the replacement cost
A shop replaces every faulty item free of charge. Each replacement costs the business 4 pounds. In one month 25 items are returned as faulty. Multiply the cost of one replacement by the number returned to find the total replacement cost in pounds. What is the answer?
Order how poor quality spreads
Put the steps by which one quality problem harms a business in order, earliest first.
- A faulty product reaches the customer
- The customer complains and asks for a refund
- Poor reviews spread to other customers
- Reputation falls and future sales drop
Complete the quality facts
Quality means how well a good or service meets customer _____. When quality falls short there are consequences, including lost sales and damage to the _____ of the business. Keeping quality high has a cost, such as inspection and staff _____. It also brings benefits, such as loyal customers and the ability to charge a higher _____.
Match the item to what it is
- paying staff to inspect finished goods
- customers returning again and again
- sending workers on a skills course
- a strong name that draws new buyers
- a cost of maintaining quality
- a benefit of loyalty from quality
- another cost of maintaining quality
- a benefit of reputation from quality
Spot the true quality facts
Tap the TWO statements that are true about quality in business.
- Quality means meeting customer expectations
- Maintaining quality has costs such as inspection and training
- Keeping quality high costs a business nothing
- Poor quality never affects reputation
Judge the quality decision
Read each case and choose the best judgement.
- A cafe known for careful, friendly service starts rushing orders to save time, and customers begin to complain. What is the most likely result?
- A small maker of handmade toys is deciding whether to pay for extra quality checks that cost money. How should it decide?
- A firm sells a product that keeps breaking. A manager says quality does not matter as long as the price is low. How should this claim be judged?
Explain the value of quality
Explain what quality means for a business and judge whether maintaining high quality is worth the cost.
- Explain what quality means in terms of customer expectations
- Explain two consequences a business faces if quality falls short
- Explain two costs of maintaining high quality
- Explain two benefits of maintaining high quality
- Finish with a judgement on whether the benefits outweigh the costs