Impact of Excellent Quality on Businesses Success

Research Proposal: How Will Having Excellent Quality In Goods And Services Drive Businesses To Success



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  1. Background
    • Context and purpose of investigation
    • Industry background


  1. Literature Review


  1. Research Objectives

3.1 Aims

3.2 Objectives


  1. Methodology

4.1 Sampling Plan

4.1.1 Population

4.1.2 Sampling Method

4.2 Data Acquisition Method

4.3 Analytical Method


  1. Project Planning

5.1 Timeline



  1. Background


1.1 Context and Purpose of Investigation


The importance of having good service quality and good product quality in a business lies in three essential factors involved. Service quality, customer relationship management (CRM) and new product development are the 3 crucial factors that ensure a successful business. This proposed study is to examine these 3 crucial factors that drive companies to success and to examine how companies use different methods and approaches to tackle these 3 factors. This is because all these 3 factors are closely linked to how much it will affect the market shares of the companies if not taken into account. This study will also look into the study and survey of public opinions on the service, products and quality to determine which one to place more emphasis on so as to achieve maximum profitability.

One of the main factors facing an organization in its efforts to improve its market share involves consumer devotion and the company must satisfy the needs of customers in ways that contribute to long-term loyalty (Gomez-Mejia et al 2005, p.8). This is where having good quality service will help business thrives in this fast-pace world of business evolution and growing globalization environment. Finding ways to improve customer satisfaction is a major key to boosting sales and profitability (Barker 2006, p.30). Hence in order to do so, companies must find their own ways to change their out-of-date traditional practices so as to create quality customer services. For example, by comparing expectations with performance, if the perceived service by the customers does not meet their expectations, the customers will be disappointed, arising in a gap. Only by understanding the GAP model will companies improve their service quality. The diagram below shows an example of a GAP model commonly used.

One of the major themes of research in the domain of research and development, innovation and product design over the past 50 years has been that of designing organizations to engage in the innovative activity (Shane & Ulrich 2004, p.134). Customers today are always looking for new and innovative products that can catch their attention. They like to have a variety of products that are continuously improving and upgrading. Hence there should be a substantial focus on satisfying this need of the customers with continuous value-added products.

Further, client relationships are now nurtured through more frequent contacts that help to better understand client needs and deliver them cost effectively (Global Investor 2005, p.1). This is where having excellent CRM comes in. In order to maintain the relationship with customers, demographic studies and a good understanding on customers’ preferences are important. This proposed study will further show how service, product and quality can lead to an organization success or failure depending on the amount of focus put into them.


1.2 Industry Background



This study will be focusing on General Motors (GM) as its loss of market shares is one of the more prevalent companies. The crisis for GM is like the wave, coming in one after the next and its market share is slowly being taken over by its Asian competitors. Rick Wagoner, chairman and chief executive of the company, is being forced to slash capacity to meet his firm’s falling sales, while simultaneously revitalizing product development so that GM can make new cars that customers might buy (The Economist 2006, p.73).For most of the 20th century, GM not only led in automotive innovations but also helped define the new breed of massive, bureaucratic multinational corporations that shaped the post-war economy. However, GM slowly offers less sales incentives than that of its competitors and also grew more distant from its customers, both in service and innovative designs of automobiles. It was the world’s largest carmaker from 1931 to 2008, when it was surpassed by Toyota. This shows the possible consequences that may happen to any other organizations regardless of its financial position in the economy that if one does not take into account the importance of recognizing consumer demand in service quality and new product development, the organization will have to bear the resulting consequences.

This study will examine all the aforementioned key elements to business success, the literature review on CRM, service quality and ways to improve product development. These will serve to explain the importance of goods and service quality in businesses of today.


  1. Literature Review


Ensuring customer satisfaction and maintaining a long-term relationship with customers have become the essentials keys in surviving among the competitive service industries. Most researchers and practitioners accept the notion that customer satisfaction is positively associated with desirable business outcomes (Keiningham et al 2005, p.173).For this reason, many companies are shifting away from traditional practices to adopting customer feedbacks and satisfying customers’ preferences. Customers are the core component in relationship management as the purchasing of products and services will provide the organizations income. Shifting the focus of service providers from a product- centric perspective to a customer-centric view while still expanding revenues and profit is one of the strategies in the services market today (Kim, Suh, & Hwang, 2003; Lin, Su, & Chien, 2006; Roh, Ahn, & Han, 2005)Many companies have improved their customer call center and taking proactive approaches in post sale contact for example, feedbacks on service or products and updates on further sales.

It is essential that companies take note to improve and integrate post sales contact and online access of information to the customers. With the fast pace of modern-day living, utilization of services has increased tremendously and marketing researchers, likewise, increased their activity momentum in this area of business (Liu 2005, p.426). If the companies do not maintain a significant level of customer service quality, it will cause dire consequences in the future. This can be an indication with General Motors who seems stuck in neutral when it comes to enhancing their post-sale customer relationships (De Felice 2006, p.13). This not only helps to increase the loyalty of customers towards the company but by placing importance on post sales contact with the customers, it shows positively towards the customers that the company is sincerely showing concern towards the quality of the product, service and also valuing customers’ opinions / feedback.

In order to maintain a high level of post sales contact with customers, a well established and high technology call center is needed. It is very important that the call center is effectively structured such that the information provided is recorded down without any parts missing. Each day, customer contact centers record loads of valuable customer information, but the manually intensive, time-consuming process of listening to even just a sample of calls is a daunting task. As a result, much of the information gets overlooked (Bailor 2006, p.26). Therefore it is particularly important to have a well equipped and an organized call center to take in the feedbacks of customers. Especially in industries that rely heavily on customer feedbacks

In customer relationship management (CRM) implementation, the improvement of customer satisfaction is crucial (Joo & Sohn, 2008). However, it is costly to implement or redesign customer-serving techniques and many companies will not be willing to invest money into it. Companies should look into the long-term prospect of CRM, as it will significantly improve the future of the companies’ prospects. The focus, therefore, is on both the long-term relationship and the short-term transaction (Gummesson, 1996; Lind- green, Palmer, Vanhame, &Wouters, 2006). The underlying philosophy of CRM is to sustain market competitiveness and long-term profitability by retaining established customers rather than relying on attracting new customers. Enhancing customer loyalty is therefore the main concerns of CRM (Gorst, Kanji, & Wallace, 1998; Lindgreen et al., 2006). It is important that firms understand what their customers wants and needs by using appropriate resources, efficient technology systems and effective knowledge management like customer data and customer segments. In CRM, the success of an enterprise is determined by its ability to enhance its relationships with its customers by fulfilling their present needs and anticipating their prospective needs and expectations (Chiu & Lin, 2004; Gale, 1990; Kandampully, 1998).

Constantly improving and updating the product line is crucial for any organization and failure to do so will results in loss of market shares and being overtaken by competitors. The company must continuously evolve with the demands of the customers and the market forces in order to remain competitive with their products. Basically, the new product development has eight stages as shown in the diagram below:

Stage 1: Idea Generation

New and innovative products ideas contributed from brainstorming and getting sources from market research, employees, consultants, competitors and customers.

Stage 2: Idea Screening

Picking out the best ideas from the ones generated above by selecting the most feasible one to develop.

Stage 3: Concept Development and Testing

Designing a want-satisfying product and understanding what drives a consumer to purchase it. Keep asking questions like, what do the customers think of the idea? Will it be practical? Will it offer the benefits that the company hope? Have the company overlook any issues?

Stage 4: Marketing Strategy and Development

A proposed marketing strategy with the marketing mix strategy of the product, segmentation and targeting of consumers, sales strategy and expected revenue.

Stage 5: Business Analysis

Whether the product is feasible and is financially worth the investment. This can be done by investigating the cashflow the product cold generate, what are the costs involve, the expected market shares, the product expected life and how much it will deteorriate in value.

Stage 6: Product Development

Product is produced and will run through a series of tests.

Stage 7: Test Marketing

Testing the product within a specific area in order to gain an understanding of whether the consumers will accept the product value prior to investing resources into mass-producing it.

Stage 8: Commercialization

Once the test marketing stage is successful, the product can be launch into the market. However, some factors have to be taken into account before the product launches.

Therefore, having an efficient product development system ensures that the product made satisfy customers’ demands and helps business to thrive. As mentioned, knowing your customers is the best opportunity in ensuring the financial goals and objectives of companies are met. And depending on your customers’ preferences, the company must invest significant time and money on research.

However, there are also companies that promote the services accompanying the products rather than the price in order to compete with big firms. The idea is that good service will enhance a relatively homogeneous product (Nickels et al 2005 p.452). This is saying that by having a good quality service that surrounds the product, it helps to increase the loyalty of customers towards the product brand. By marketing this service coupling the product, can prove to be effective in the competitive market today. Similar to advertising, service quality is one of the many variables – including pricing, advertising, efficiency, and image- that simultaneously influence profits (Ziethaml et al 1996, p.32). With proper marketing, it will help to promote to customers that the product is multi-dimensional with and comes with good service quality. This in turn, aid in the awareness of the product brand to the customers.

Having good service quality and good product development poses major challenge to companies that are declining as they not only have to manage their own companies issues yet simultaneously having to improve their quality of service and product. In a declining industry one has to manage, above all, for steady, systematic, purposeful cost reduction and for steady improvement in quality and service (Drucker 1999, p.58). The problem is due to the monetary involvement in research for product and service quality enhancements and whether the company has the capability and resources to execute it. In order to meet the consumers’ demands, the company must be able to work in a crisis environment and satisfy the consumers needs and wants despite the financial setbacks of the company. Therefore, a cost effective measures must be taken yet at the same time, continues to present the company’s brand to the public in a positive way. No matter what type of reason a company may have for making a poor product, poor service or in debts. If it cannot adapt to meet the customers’ demands for change, it will never be able to fight against other companies that can work well with these factors. Failure to do so will eventually lead to a loss in market share of the industry.

Today, many businesses are using the Internet in one way or the other to assist in selling or purchasing products, especially in the automobile insurance industry. This is due to the ease of ‘click and buy’ insurance policies, enables customers to compare prices with other websites and also making payment through online system like ‘pay pals’. Many companies are also providing live forums to enable customers to give feedbacks through hotline or ‘live help’, chatting directly with the customer service representatives. For businesses that primarily run on e-commerce, it is logical to say that it has very little resources to have direct contact with the consumer market. Hence, a 24 hours chat system must be established to ensure that the Internetsales run smoothly. Although it is expensive to maintain this chat system, but if we consider benefits on the long term where customers will feel more connected to the company due to the chat system, customers and sales will increase which outweighs the short-term financial burden of establishing the chat system.

This proposed study shouldexamine the methods used by organizations that are physically located as well as Internet based commercial operations and the impact on profits gain from e-commerce organizations.

  1. Research Objectives

3.1 Aims

The main aim of this study is to show the importance of the 3 concepts of service quality; customer relationship management and new product development are relevant and crucial in organizations.

3.2 Objectives

One important objective is to demonstrate the negative effect on an organization for failure to recognize the need to conduct business while keeping the 3 concepts of service quality; customer relationship management and new product development in mind.

Another significant objective is to show that businesses especially e-commerce operations need to realize the importance of establishing these concepts into their business frameworks.

Although these concepts individually are important in helping an organization to gain profits and increase market shares, by combining them together, business can be value added and increases consumer satisfaction.

  1. Methodology

Most of the information gathered for this proposed study will be from secondary research primarily from books, journals, Internet, newspaper articles and any available market analysis reports.

4.1 Sampling Plan

Surveys geared towards appropriate consumer market will be distributed in a geographical proximity too the researcher. This is to enhance the secondary research information by having an understanding of the impact on local consumer groups on their perception and opinions on particular brand or company.

4.1.1 Population

All of the primary data research will be in Singapore.

4.1.2 Sampling Method

Proposed objective of approximately 200 respondents, must receive at least 50 adequate responses from potential respondents.

4.2 Data Acquisition

The researcher will distribute self-administered survey forms to similar groups of people at his/her own discretion to find out on their opinions on the service and product quality on a specific company who have placed different importance on the three concepts. Furthermore, respondents will be asked to do a rank-order scale questionnaire on different products and services on their importance.

4.3 Analytical Approach

After all the primary research are gathered, all of the information can be quantified and statistically charted and graphed to show any potential patterns in consumer opinion. If the responses show no distinct pattern, the resulting data can also be coordinated into a graph for better illustration to show that the consumer preferences are widely varied and are difficult for organization to predict. If majority of the data response indicate service as their main preference when choosing the company’s product, the opinion can be highlighted and be used as reference for marketing research. This approach to analysis is the most effective as the data gathered can be easily formatted into graphical illustrations that can act as indicators to potential patterns in consumer expectations or business perceptions.


  1. Project Planning
Week 12-14
Week 24-26
Week 4-6
Week 0




Estimated timeline

Week 0 – Week 4-6:

– Collection of secondary data sources

Week 4-6 – Week 12-14:

-Compiling, analyzing, and charting primary data collected from survey      respondents

Week 12-14 – Week 24-26:

– Final dissertation of proposed study with supporting evidence to prove the study hypothesis.



Bailor, Coreen. Mar 2006. ‘Keeping Balance in the Center’, CustomerRelationship Management.Medford. Vol. 10, Iss.3, p.26.

Barker, Julie. Mar 2006. ‘Understand Customers, Gain Loyalty in Return’, Salesand Marketing Management. New York. Vol. 158, Iss.2, p.30.

Chiu, H.-C., & Lin, N.-P. (2004). A service quality measurement derived from the theory of needs. The ServiceIndustries Journal, 24(1), 187–204.

De Felice, Alexandra. Mar 2006. ‘Driving Relationships’, Customer RelationshipManagement. Medford. Vol. 10, Iss.3, p.13.

Drucker, Peter F. 1999.Management Challenges for the 21st Century. HarperBusiness Publishers.p.58.

Gale, T. B. (1990).The role of marketing in total quality management. In: QUIS-2 Quality in Services Confer- ence Proceedings, University of St. John’s. Minnesota, 5 November 1990.

Global Investor. May 2005. ‘Going Beyond Empty Slogans’. London. p.1.

Gummesson, E. (1996).Toward a Theoretical Framework of Relationship Marketing.In Proceedings of the 1996 International Conference on Relationship Marketing, Humbold University, Berlin, Germany.

Gorst, J., Kanji, G., & Wallace, W. (1998). Providing cus- tomer satisfaction. Total Quality Management, 9(4/5), s100–s103.

Gomez-Mejia, Luis R., Balkin, David B. & Cardy, Robert L. 2005.Management: People, Performance, Change. 2nd ed. McGraw-Hill Irwin.p.8.

Joo, Y. G., & Sohn, S. Y. (2008). Structural equation model for effective CRM of digital content industry. Expert Systems with Applications, 34(1), 63–71.

Kandampully, J. (1998). Service quality to service loyalty: A relationship which goes beyond customer services. Total Quality Management, 9(6), 431–443.

Keiningham, Timothy L., Perkins-Munn, Tiffany, Aksoy, Lerzan & Demitry Estrin. 2005. ‘Does Customer Satisfaction Lead to Profitability? The Mediating Role of Share-Of-Wallet’.Managing Service Quality. Bedford. Vol. 15, Iss. 2. p.173.

Kim, J., Suh, E., & Hwang, H. (2003). A model for eval- uating the effectiveness of CRM using the balanced scorecard. Journal of Interactive Marketing, 17(2), 5– 19.

Lin, Y., Su, H.-Y., & Chien, S. (2006). A knowledge- enabled procedure for customer relationship manage- ment. Industrial Marketing Management, 35(4), 446– 456.

Liu, Chu-Mei. Sep 2005. ‘The Multidimensional and Hierarchical Structure of Perceived Quality and Customer Satisfaction’, International Journal of Management.Poole. Vol. 22, Iss.3, p.426.

Lindgreen, A., Palmer, R., Vanhame, J., & Wouters, J. (2006). A relationship-management assessment tool: Questioning, identifying, and prioritizing critical as- pects of customer relationships. Industrial Marketing Management, 35(1), 57–71.

Nickels, William G., McHugh, James M. & McHugh, Susan M. 2005.Understanding Business. 7th ed. McGraw Hill-Irwin.p.2005.

Roh, T. H., Ahn, C. K., & Han, I. (2005). The priority fac- tor model for customer relationship management sys- tem success. Expert Systems with Applications, 28(4), 641–654.

Shane, Scott A. & Ulrich, Karl T. Feb 2004. ‘Technological Innovation, Product Development, and Entrepreneurship in Management Science’. Management Science. Linthicum. Vol. 50, Iss.2, p.134.

The Economist. Mar 11 2006. ‘Driving into Traffic; The Car Industry’.London Vol. 378, Iss. 8468. p. 73.

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