Pursuing a Total Quality Marketing Strategy


Highlight 11.4

Hotel Sales And Marketing Strategies

Leica, now owned by the Swiss Anova company, invented the 35 mm camera and still makes cameras renowned for their beautifully engineered bodies with lenses giving razor-sharp pictures. At DM4,000 their M6 is still a great status symbol, but now nearly all professional photographers use Japanese-made Canon, Nikon, Minolta or the like. Leica now has a technology co-operation agreement with Minolta that has helped it produce the Leica Mini, which sells for about DM400.

The Japanese took early to TQM. In 1947 General Douglas MacArthur invited W. Edwards Deming to Japan to help assess their postwar industrial needs. Deming was no ordinary management consultant; he was the man who invented quality. To the Japanese he was a prophet whom they invited back many times to lecture on quality and statistical theory. Meanwhile the United States and Europe ignored him. In 1951 the Japanese created the Deming Prize, an award that symbolized Japanese industry's commitment to Deming's quality ideals. Honda, Nissan, Toyota, Nippondenso, Tanabe Seiyaku and Matsushita all won that prize more than 30 years ago. Consumers around the world flocked to buy high-quality Japanese products, leaving many American and European firms trying to catch up.

TQM recognizes the following premises:

1. Quality is in the eyes of the customer. Quality must begin with customer needs and end with customer perceptions. As Motorola's vice-president of quality suggests: 'Quality has to do something for the customer ... Beauty is in the eye of the beholder. If [a product] does not work the way that the user needs it to work, the defect is as big to the user as if it doesn't work the way the designer planned it. Our definition of a defect is, "if the customer doesn't like it, it's a defect".' Thus the fundamental aim of today's quality movement has now become 'total customer satisfaction'. Quality improvements are meaningful only when perceived by customers. British Telecom's first quality programme launched in the late 1980s became bogged down in its quality processes and bureaucracy. It failed to focus its efforts on customers.

2. Quality must reflect not just in the company's products, but in every company activity. 'Quality is a way of life,' declares Jan Timmer, president of Philips Electronics. 'Total quality is not a passing business fad but embedded in the permanent principles of human philosophy/ says Louis Schweitzer, president directeur general of Renault.

3. Quality requires total employee commitment. Quality comes only from companies whose employees commit to quality and who have the motivation and training to deliver it. Successful companies remove the barriers between departments. Their employees work as a team to carry out core business processes and to create desired outcomes. Employees work to satisfy their internal customers as well as external customers.

4. Quality requires high-quality partners. Quality comes only from companies whose value chain partners also deliver quality.

Therefore, a quality-driven company must find and align itself with high-quality suppliers and distributors. 'Unless suppliers are in tune with quality demands of their customers, they will not be able to meet their demands,'says Glive Capp of Howard UK.

5. A quality programme cannot save a poor product. The Pontiac Fiero launched a quality programme, but because the car didn't have a performance engine to support its performance image, the quality programme did not save the car. A quality drive cannot compensate for product deficiencies.

6. Quality can always improve. The best companies believe in the Japanese idea of femsen: continuous improvement of everything by everyone. The best way to improve quality is to benchmark the company's performance against the 'best-of-ckss' competitors or the best performers in other industries, striving to equal or even surpass them. For example, Alcoa measured the best-of-class competitors and then set a goal of closing the gap by 80 per eent within two years.

7. Quality improvement sometimes requires quantum leaps. Although the company should strive for continuous quality improvement, it must at times seek a quantum quality improvement. Companies can sometimes obtain small improvements by working harder. But large improvements call for fresh solutions and for working smarter. For example, John Young of Hewlett-Packard did not ask for a 10 per cent reduction in defects, he asked for a tenfold reduction and got it.

8. Quality does not cost more. Philip Crosby argues that 'quality is free'. Managers once argued that achieving more quality would cost more and slow down production. But improving quality involves learning ways to 'do things right the first time'. Quality is not •inspected in - it is designed in. Doing things right the first time reduces the costs of salvage, repair and redesign, not to mention losses in customer goodwill. Motorola claims that its quality drive has saved $700 million in manufacturing costs during the last five years.

9. Quality is necessary but may not be sufficient, Improving a company's quality is necessary to meet the needs of more demanding buyers. At the same time, higher quality may not ensure a winning advantage, especially as all competitors increase their quality to approximately the same extent. Fur example, Singapore Airlines enjoyed a reputation as the world's best airline. However, competing airlines have attracted larger shares of passengers recently by narrowing the perceived gap between their service quality and Singapore's service quality. 10. Quality needs Jong-eerm commitment. It is not a quick fix. A 'blitz approach' can lead to disaster, says quality consultant John Oakland. 'You raise employees' expectations but they are invariably not given the means of doing things differently ... People talk the language of quality, but the capability of the organization doesn't live up to the language; it's still using lousy systems and materials.'

In recent years, some European and US firms have struggled to close the quality gap between them and the Japanese. About ten years ago Motorola, Texas Instruments and Ilarley Davidson took up TQM. Rank Xerox, one of the earliest European adherents, started some years later. Many started their TQM programmes to compete on a global and domestic basis against the Japanese. Europe's acceptance of TQM remains well behind that of the United States and Japan. A survey by the Brussels-based European Foundation for Quality Management (EFQM) found that only 30 per cent of European companies claim to have adopted TQM compared with 55 per cent in the United States and 53 per cent in Asia.

The European Commission worries about this quality shortfall and its failure to reach some European countries, such as Germany, where it has made little impact. 'In Germany where quality has always been established, TQM is not as easily accepted as in many other countries,' says Geert de Raad, EFQM's general secretary. Such complacency is dangerous. An IBM-London Business School study shows that only 1 in 50 manufacturers in four European countries were world class, although three-quarters believed that they could compete with their best international rivals. The United Kingdom had the most 'punchbags' - weak on both practice and performance -while Finland had no world-class manufacturers at all. Germany had most (2.9 per cent) world-class manufacturers, but also large numbers that wrongly thought they were. Many had not realized that total quality and customer service are no longer a source of sustainable advantage, but merely a qualification for competing.

SOURCES: Quotes from Luis Therrien, "Motorola ami NEC: going for glory'. BusinGO-i Week, special issue on quality (1991), pp. 60-1; And Simon Ilolberton, 'An idea whose time has not only come but will prevail', Financial Times (20 March 1991), p. 10. See also David A. Garvin, 'Competing on eight dimensions of quality*. Harvard Kusincss Rt?viei.v (November-December 1987), p- 109; Robert Jacobson and David A. Aaker, 'The strategic role of product quality', Journal of Marketing (October 1987), pp. 31-44; Frank Rose, 'Now quality means service too', Fortune (22 April 1992). pp. 97-108; Frederick Stiidemann, 'Leiea develops a sharper focus'. The European (30 September-6 October 1994), p 32; Tom Lloyd, 'How Mr Quality made his mark', The European (11-17 February 1994), p. 20; The cracks in quality', The Ee-aitomist (18 April 1992), pp. 85-6; Vanessa Houlder, 'Satisfaction guaranteed' and "IVo steps forward, one step back", Financial Times (23 October 1994), p, 10; Jessica Berry, 'Scathing survey blames inertia for poor manufacturing performance'. The European (25 November-1 December 1994), p 28; Christopher LorenK, '"World-class" delusion of multinationals', Financial IVmt.s (2 December 1994), p. ]l;!BM,JWade in Europe (London: IBM UK, 1994),

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