After reading this article you will learn about the concept of quality (QC) in regard to international marketing.
Introduction to Concept of Quality:
The concept of quality is highly relevant in the area of international marketing. Infect quality is the minimum standard the overseas customer would see before he makes up his mind to even see your products. This concept is not limited to manufacturing department only but is spread to all other activities that move the product from the manufacturing bay to the market place for final sale.
Quality of materials, testing, processing, assembling, packing, marketing, forwarding, branding, publicity, market exposure, pre & post market research, and after sale service etc., all are but part of the quality concept.
It is the overall impact that one generates through the products and services and with the pricing logistics enters the competitive market place for the final kill. If the homework has been done diligently and thoroughly, he will make the kill otherwise gets killed.
In the above figure the concept of quality is explained. A product is either made for the market or is placed in the market. The best results are obtained when a product is tailored for a market before placing it. The pre-market research will give data for the market expectations in terms of sales potential, competitors, quality levels, packing and labeling, distribution logistics, pricing etc.
Than the quality concept is applied to all internal functional areas (procurement, processing, testing and inspections, packing and labeling etc., to produce just the required product/service for the market specific. The quality concept has to be judiciously applied to the external functional areas that are included under the general marketing terms.
The post-sales market research will indicate whether all the functional areas were performing or not. After sales service activities is one such area (other than the research work) that indicates the market acceptance of the products/service. It is not enough to produce quality products, the quality in the external factors is also very important.
Poor after sales service, or sales promotion including positioning & placement, can kill a quality product. The most important question is not how to produce quality product but how to control and maintain the quality standards in all the functional areas.
Whenever we talk about quality we generally refer to the quality of the end product and measure it in terms of performance, safety, durability, and price.
In certain markets and products price might be the primary concern when it comes to the decision making situation but in the present highly competitive global markets the competition drives the performance, safety, and durability to near perfection levels and that leaves the price strategies/logistics as the final deciding factor.
That means we have two (basic) parameters that move the products/services in the competitive markets, first the quality (performance, safety, and durability) and second the price. Both these factors are influenced by the competitors. The first point of quality, is more directly related to in-house activities whereas the second point is more associated to the outside factors.
Quality in absolute terms has lesser validity at the market place because different people due to conceptual differences and expectations/anticipations associate it differently. Let us assume that the quality consciousness of the manufacturer is MQ and that of the customer as CQ. The manufacturer has two views one that he can produce (MQ1) and the one that he delivers (MQ2).
Similarly the customer also has two views one that he anticipates (CQ1) and the second that he gets (CQ2). For a given product/service the difference between MQ1 and MQ2 indicates the Quality Distortion (QD) that occurred during the in-house operations of the manufacturer. The difference between CQ1 and CQ2 indicates Confidence Loss (CL) in the customer.
QD is directly proportionate to CL and in a given market place they tend to remain in a suspended state of equilibrium. Higher QD will attract higher CL and that will be the de-motivating force driving not only your customers away from you but also letting your competitors chip in some of your market share.
How to avoid such situations? The answer is simple. Between MQ1 and MQ2 there must be a control mechanism that not only monitors the progress from MQ1 to MQ2 but also raises alarm when things go astray and also gives alternative corrective measures. This control mechanism is termed as the Quality Control or QC in short.
QC is a system of inspection analysis and action applied to a manufacturing operation so that by inspecting a small number portion of the product currently produced, an estimate of the overall quality of the product can be made to determine what if any change must be made in the operations sequence to achieve or maintain the required levels of quality.
QC is essentially a set of activities to ensure that the specifications of the finished product are fully satisfied. More general terms like quality assurance and Total Quality Control covers all the technical and management aspects of the product quality, and safety during the design, specifications, development, manufacturing, and usage stages.
Periodic review of the quality standards and operations are also undertaken to ensure that the product remains satisfactory to the consumer and competitive in the market place. This can involve comparative testing of competitive products and the undertaking of quality improvement programs.
Since most of the manufacturing organizations have profit motive as the prime objective, quality control performs its task with the objective of minimizing costs but retaining the quality aspect of the product.
This is done by objectively reducing the production time cycle of the product since any reduction in this cycle will be an exercise in cost cutting. The exercise consists of various inter-linked steps. Each step is assigned pre-determined filtering (acceptable and not acceptable) role to filter out in terms of specifications, dimensions, tolerances, sub- time cycles, etc.
Because of its progressive nature, it allows further movement only for what is acceptable. All that is not acceptable, at any stage, is either recycled or taken out of the production system for analytical studies and the results (corrective measures) are fed back into the QC. It is affected by both the internal activities in an organization as well as by the external activities directed towards the organization at the market place.
QC for a manufacturer is a progressive process flow diagram that links various manufacturing activities for achieving perfection in production performance efficiently. Similarly QC for a service organization is a progressive process flow diagram that links various service activities for achieving perfection in deliverance efficiently.
It represents the total quality culture of an organization and is amended, appended, and structured for the sole purpose of bringing perfection in quality performance with highest efficiency levels.
Measuring the Quality:
Unless proved on the contrary all goods are treated to be of good quality. No supplier would ever admit that his goods are inferior or lack in certain qualities. But the story changes when the customer comes back with complain. How we can accretion ourselves about the quality of the goods produced before they are put in the market place? How can we know what is being produced is of required quality?
The most universal method is called sampling. It can be for the whole of the production or part of it. The logic behind sampling technique is that a randomly selected item is a representative of the balance lot that has gone through similar processing environments.
Inspection and testing is the most popular industrial activity, which ensures that the manufactured goods, individual components, and multicomponent systems are adequate for their intended purpose. These programs cover evaluation of the product design prior to manufacturing, conformance during manufacturing, and durability during subsequent storage transport and usage.
Inspection and testing terms are used interchangeably and jointly to describe closely related activities. But strictly speaking inspection is the total activity dealing with: interpretation of the product specifications, measurements, and testing of characteristics described in the specifications, methods of sampling and statistical analysis of the results and decisions on the deposition of the product evaluation.
Deciding the Inspection:
Before we can start inspection procedure we have to decide what has to be inspected. Inspection is a cost additive element that ultimately gets reflected in the total cost of the product, and under competitive market situations even one percentage addition or reduction in costs can mean gained or lost business.
Therefore what has to be inspected and how it has to be inspected is very important. Here we assume that inspection is 100% effective and there are no errors of judgement on the part of the quality inspector, either in classifying a good item as defective or in classifying a defective item as good.
What has to be inspected?
Generally the material specifications (chemistry and the physical properties), dimensions of critical parts especially those areas that interfere directly and/or indirectly in the operational performance of the product, tolerances, surface finish, required outputs, surface finish, packing and labeling etc. are some of the areas that can be subjected to inspection to find out the quality level of the lots.
Once a decision has been made a final list of the items to be inspected are made out in the form of a table that indicates what is to be inspected and accepted and what is to be rejected, or in other words it indicates the acceptance and rejection standards for a specific product.
It must be noted one cannot produce 100% perfect items at all the times and under all the conditions, Therefore world over there is standard practice of indicating what are the minimum acceptable defects. (The most stringent level is 1 in 1 million in automotive parts.).
How it has to be inspected?
The inspection is done on sampling basis and there are several alternatives available like:
(a) Complete or 100% inspection,
(b) Acceptance sampling,
(c) Single sampling,
(d) Double sampling,
(e) Sequential sampling, and
(f) Rectifying schemes.
This choice for the available sampling schemes that would be best suited in terms of cost; ministrative convenience etc., is discussed here under:
Complete or 100% inspection:
The most stringent inspection method is the one where each and every item is subjected to inspection; this is the most expensive and time-consuming method. It involves inspecting each item that is produced to see if it meets the desired quality level.
This might seem to be the best procedure to meet quality targets but it cannot be used if inspection involves destructive testing and when the items involved are in bulk quantities, because in destructive testing 100% of the items have to be inspected.
In this case even if the item is good it will be destroyed meaning another item has to be produced which will be again subjected to same fate. Even under 100% inspection, defective items might still slip through unless the inspection it itself 100% effective. In inspection human element is involved and there are chances that a defective item may pass as a good item.
Therefore even if 100% inspection has to be carried out than at least destructive tests are not included. This form of inspection is required for items where the consequences of letting a defective item through are too sever and may result in deaths and/or huge financial liabilities.
Such situations occur in items required for the electronics guiding systems, these systems and components are rigorously tested for extended periods of time under adverse situations stretching the components to their operational limits so that whatever system bugs are present are identified and removed. After finishing all the tests the components and systems are again subjected to 100% performance tests.
When the 100% inspection is not viable then the alternative is to take a sample of a certain size from a batch (sometimes called lot) of items and operate 100% inspection on the sample. From the results of the sample we can decide whether to accept the entire batch or reject it.
If the proportions of defective items in the sample are below the “minimum acceptance standards” then the batch is accepted and if it is more than the batch is rejected.
In this scheme a single sample (of size to be determined) is taken from a batch and if the number of defectives found in the sample are below the acceptance the batch is accepted.
This is an extension of the single sample scheme where at first a small sample is taken and if this is mainly OK then the batch is accepted otherwise a further sample is taken to decide the fate of the batch. Under MIL inspection scheme similar method is used.
This is again an extension of double sampling whereby a number (> 2) of small samples is taken for inspection. The idea here is that after each sample testing, decision to accept the batch or continue sampling is made and if it continues till the last sample than the batch is rejected. This idea of multiple sampling leads to another form of sampling, i.e., the sequential sampling.
In a sequential sampling scheme testing continues on items from the batch and after each item is inspected a decision is made whether to accept or reject the batch, or to continue sampling.
Under this scheme, all rejected batches are subjected to 100% inspection and subjected to rectification – that is all the defective items in the batch are replaced with items that are Okay.
Avoiding Quality Problems:
For the international business it is always better to block not-good products because they not only cause loss of reputation and business but also causes financial burden in the form of replacement and repairs. Pre-shipment inspection (PSI) is one of the best methods in this direction.