Improving Quality (AQA A Level Business): Revision Note

The importance of quality

• Quality products are those whose characteristics and features satisfy the needs of customers

• Customers may consider products or services to be of good quality if they:

  • Look good and are sold by a reputable business or brand

  • Are reliable and durable

  • Are safe and fit for purpose

  • Receive good customer service, including after-sales service

Factors that influence quality perception

• Many businesses set quality targets to focus staff and resources on meeting customer expectations

  • Pizza chain Dominos sets targets for home deliveries completed within 30 minutes of customers placing an order

    • Customers are fully refunded if their pizza arrives after this time!

• The quality of a businesses products can provide a competitive advantage

  • High levels of quality can be used in promotional activity and provide a unique selling point for businesses in competitive markets

  • Successfully developing a USP for quality can ease expansion into new markets as a result of the positive reputation it creates

  • Increased finance may be available to fund marketing activity to improve brand recognition and attract new customers 

• Quality is closely linked to price

  • High quality products can usually command a high price

  • Lower quality products may need to be sold at a discount to persuade customers to buy them

Methods of improving quality

Quality control

• Quality control is a traditional method of checking quality at the end of the production process using quality inspectors to find faults

• It is not possible to achieve perfection in every production process

  • E.g. There will always be some variation in terms of materials used, production skills applied, reliability of the finished product

Benefits and drawbacks of quality control

Quality assurance

• Quality assurance involves inspecting the quality of production throughout the process

  • Workers check their own work and, sometimes, the work of others at various stages of production 

• Some business take a whole business approach to quality assurance with systems such as quality circles, benchmarking and Total Quality Management (TQM)

Benefits and drawbacks of quality assurance

Benefits and difficulties of improving quality

• The quality of a businesses products can provide a competitive advantage

  • Unit costs are likely to be low if a business effectively manages quality

    • Low costs may allow a business to reduce its selling price to better compete with or undercut its rivals

  • High levels of quality can be used in promotional activity and provide a unique selling point for businesses in competitive markets

  • Successfully developing a USP for quality can ease expansion into new markets as a result of the positive reputation it creates

Benefits of improving quality

Difficulties of improving quality

• High up‑front and ongoing quality management costs

  • Small firms often struggle to pay for staff training, better materials and certification fees

• Staff or union resistance to new quality systems

  • Changing routines and adding checks can meet resistance from workers, slowing down their introduction

• Customer price sensitivity

  • Better quality can push costs and, consequently, prices up

  • Price‑sensitive shoppers may switch brands

• Strain on resources

  • If funds are scarce, pushing for higher quality can overstretch staff and cut service levels

Consequences of poor quality

• Poor quality can cause a range of problems for a business

  1. Costly recalls and repairs

     • Faulty goods must be taken back, fixed or refunded, which can have a significant impact on cash flow and profit

  2. Heavy fines or legal payouts

     • Safety failures can end up in court, where fine, penalties and compensation bills are huge

  3. Damaged brand reputation and lost customers

     • News of defects spreads quickly, making buyers switch to rivals they trust more

  4. Sharp drop in sales and profits

     • Negative headlines can reduce sales and share price, and recovery can take years