To what extent can improvements in productive flow and product quality Essay - 4

To what extent can improvements in productive flow and product quality lead to an increase in sales and profit - Essay Example product flow and quality, and determine how their association can be harnessed to promote sales as well as profits. Business organisations exist with a goal of maintaining continuous improvement and productivity; a goal that can only be achieved if high sales and profits are maintained. Enhanced sales and profits provide adequate opportunities and resources to the manufacturers that they apply for innovation and growth. Enhanced innovation enables manufacturers to provide superior and lean quality products that attract customers. Most companies strive to leverage operational improvements into strategies that transform the company (Williams, Haslam and Williams, 1992). Production flow defines the concept of mass production. It is the idea of producing large quantities that are manufactured through application of high standardised methods. Production flow is applied by many companies because it promotes the production process; it is easier and quicker. The introduction bit of the proce ss is cumbersome and difficult although it becomes easier once the production flow attains momentum. Owing to its emphasis on production of large quantities of commodities, production flow relies on the machinery for most of its roles. This implies that surmountable resources require to be allocated in the purchase, training and maintenance for the strategy to be efficient. Machines involved in this process should be selected and handled carefully to ensure that they are not vulnerable to wear and tear. This may lead to loss in terms of maintenance and replacement costs (Womack, Jones and Roos, 1990). According to Oulton (1987), mass production has its merits as well as demerits. Installation of the machinery required for production requires abundant financial resources. However, once the machinery has been installed, organisations save considerable financial resources, especially the money required in hiring and maintenance of human labour (Gilchrist, 1971). The work output is norm ally high. The accuracy levels are also high provided the machines are maintained in a superb working form. Machines are also capable of abiding to the set deadlines with no requirement for extensions. Abiding to the performance deadline is enhanced by the presence of assembly lines that allows continuous and consistent flow of manufactured products. This enhances output as well as the quality of the products produced in the long term, leading to increased sales and profits. Investing in production flow process benefits the manufacturer due to improved sales, leading to the increase in profits. Quality can be defined as the ability of a product or service to fulfil the client needs or expectations. Therefore, it can be measured depending on the level that the quality of a product satisfies the expectations of a consumer. High quality products have superior features that satisfy the consumer needs while the features of low quality products do not correspond to the needs of the consum er. For instance, the features that determine the quality of mechanical products include appearance, safety and reliability. Product quality improvement should consider the customer’s needs and expectations, extent of fulfilment of both national and international regulations and the competitiveness of the product (Williams, Haslam and Williams, 1993). Improving the product quality will not only satisfy the consumer needs; more customers will be attracted leading to increa To what extent can improvements in productive flow and product quality Essay - 1 To what extent can improvements in productive flow and product quality lead to an increase in sales and profit - Essay Example Additionally, there is product price, product quality, customer preference, and economic stability of a market. Product quality and productive flow are also factors that affect sales and profit. They have various ways through which they affect sales and profit (Shaharudin, Mansor, Hassan, Omar & Harun, 2011, p. 8163; Shetty & Buehler, 1991, p. 8). The extent, through which product quality and productive flow can increase sales and profit, can only be shown through explaining the effect of these two factors on sales and profit. How improving these factors can lead to increased sales and profit, will clearly be produced in the explanations given about their effects. The essay is, therefore, divided into two main sections: The effects of product quality on sales and profit, and the effect of productive flow on sales and profit. These will show the relationship between product quality and productive flow to sales and profit hence; help in understanding how improving the two factors can l ead to increased sales and profit. Effect of Product Quality on Sales and Profit The main element that brings value to a customer in the market offering is the product. A product is more than a tangible object. It includes performance quality, service features, brand name, design and packaging. The quality of a product is very important since it affects the product performance and so is connected to customer satisfaction and value (Shaharudin, Mansor, Hassan, Omar & Harun, 2011, p. 8164). Consumers of today seek high quality products. The only problem is different perceptions held by customers about quality. Any company interested in selling its products should conduct thorough market research, depending on the type of product they have, to determine what their consumers perceive as high quality. Consumers in the United States, for example, rank quality based on reliability of a product, durability, easy maintenance, ease of use, brand name and the price. This is specifically on mot or cycle products (Shaharudin, Mansor, Hassan, Omar & Harun, 2011, p. 8164). Improving the quality of a product, therefore, increases the sales of a product. Sales depend on customer satisfaction and value, and product quality is one way of satisfying the customer and offering something of value depending on the customer. The extent to which product quality affects sales is great. This is because, for goods to be sold, customers have to want, need or prefer them. Preference is most common where there are a variety of products with different features, prices, brand names, quality and so on. Product quality is a determining factor in preference for a product, so affects sales. Customer satisfaction and value is vast. There are different customers with different tastes, needs, and economic capability. All these determine the preference hence the intent to purchase a product (Shaharudin, Mansor, Hassan, Omar & Harun, 2011, p. 8164). Product quality is the totality of a product or servic e characteristics that give the product or service the ability to satisfy given needs. If a product fulfils a customer’s expectations, the customer becomes satisfied and begins to build loyalty. Loyalty is developed through trust and positive relationship with the customer. Customer loyalty retains customers and contributes to the number of sales made in a given period of time. This clearly indicates one of the various ways through which product qua

Marketing Strategy at Tesco plc Essay Example | Topics and Well Written Essays - 1750 words

Marketing Strategy at Tesco plc - Essay Example Superior service quality leads to favourable behavioural intentions, customer retention, a constant revenue stream, increased spending, willingness to pay price premiums, and word-of-mouth advertising and customer capture. Verbalising good intentions is merely the first step in creating a positive attitude of satisfaction, but the second more important one is delivering on the good intentions. Kotler (1977) emphasised that a market-orientated business must focus not only on selling but on customer satisfaction but failed to emphasise the disconnection between the two. Zemke and Schaaf (1990, 53) argue that the really useful, specific, directly applicable information comes from talking to customers, constantly and often at length, to determine what the company is doing that makes them happy or not. Cronin and Taylor (1994) focus on performance measures of service quality rather than customer expectations. Piercy's (2002) customer relationship sliding scale (Fig. ... , specific, directly applicable information comes from talking to customers, constantly and often at length, to determine what the company is doing that makes them happy or not. Cronin and Taylor (1994) focus on performance measures of service quality rather than customer expectations. Customer Focus Piercy's (2002) customer relationship sliding scale (Fig. 7.1, p.344) is more complicated than the matrix used by Reinartz and Kumar (2000) to determine which types of customers are worth keeping and for whom the company must spend marketing resources to achieve retention. Its justification came from research that "it can cost five times more to get a new customer than to keep an existing one" (Weinstein et al., 1999, p. 119), following Reicheld (1994) who asserted that a 5 percent increase in loyalty can lead to a 25 to 85% increase in profitability. Pine (1993) talked of mass customisation and one-to-one marketing, echoing Hamel and Prahalad (1989) who warned of convergence of producers and customers with the Internet, which empower customers to become active co-creators of products, services, and value. Businesses have to show greater sensitivity to customer wants. Market Choices The simplified market choice diagram (Piercy, 2002, Fig. 8.1, p. 410) builds on the complex market analysis models proposed by academics such as the product-customer matrix (Piercy, 2002, Fig. 8.2, p. 412). These models build on studies made by management science academics as Freeman (1984) who proposed that the company must satisfy all of its stakeholders, quite an impossible task even for the best managers. Bartlett and Ghoshal (1994) argued for strategic choice, related to the purpose for the existence of the business. Hamel and Prahalad (1989, 75) suggested that businesses define