selling on ‘price’ differentiation

A TV company branded ‘SS’ established in 80’s was selling its brand based on ‘price’ differentiation. With several MNC entering the market, SS started facing stiff competition. The owner Mr. Nattan felt if he focuses his company’s image as a quality company then he can beat the competition. Hence he shifted the company’s focus from ‘price’ differentiation to ‘service’. He started concentrating in finding what the customer wants. Prior to quality introduction, the performance measures were in terms of number of new clients, total billing etc. While meeting the customer, the sales talk was on ‘high service delivery’ without any regard to customer’s needed level of service or on the satisfaction as in the minds of the customer. There was hence a possibility of not meeting their own stated level of service delivery which led to disappointment among customers. Quality goals were now established which were felt to be the indicators of quality – assuring the company in terms of tangible success.
Satisfaction of customer is indicated through
· Bills paid on time
· Retaining customer return at 70%
· Accounts receivable days outstanding is improved by 30% within the next 6 months
· Customer satisfaction survey will indicate customer satisfaction to be above 90%
Satisfaction of employee is indicated by
· Turnover rate brought down by 3% in 6 months time
· Absenteeism is lowered by 10%
· Employee satisfaction survey indicating a level above 95%
Growth of the organization is indicated by
· Obtaining ISO certification
· Increase in share price by 30%
· Increase in number of customers
Discuss:
1. Do you agree with the methodology adopted by the company for becoming ‘quality organization’?
2. Evaluate the firm’s ‘indicators of quality’ which is expected to measure quality.
3. Identify a few quality indicators to measure quality effectiveness for a company gearing towards TQM

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