Value and Relationship Quality
Consumers choose goods and services based on the assumption that they will be rewarded with value and satisfaction. Consumption is the process by which goods and services are used and assigned a level of value by the consumer.
Quality + Price + Customer Service = Value and Satisfaction
That level could be positive, if the customer was satisfied, or it could be negative if they did not find any value in their purchase. Marketers have to provide the right combination of quality, price and customer service in order to give customers positive value and satisfaction. That will in turn create happy, loyal customers. The formula looks like this:
If a product/service is provided that has low quality, and a high price, that does not create a happy, satisfied customer. At the same time, having a great product at the best possible price means nothing if the customer is treated badly, or not provided with the opportunity to return unwanted items.
So what is meant by 'Quality?'
Quality is a product or service's ability to meet the customers' need or want. Quality is difficult to define, and varies with each consumer, however we can take a look at some of the components of quality for products and services:
- Performance-The product does what it is supposed to do.
- Features-The product includes all the specifications that it says it has or that are required, this includes safety measures.
- Reliability-The product performs consistently.
- Durability-When the product is being used it has to last under the conditions of normal use.
- Serviceability-The product is easy to maintain or repair either by the consumer or by providing a warranty which says the company will provide repairs.
- Aesthetics-This is important to consumers, products have to look good, and this contributes to a brand equity and identity.
- Perception-Even if the product has good quality, if the customer does not think so, then it won't sell. The customer has to have positive feelings about the product, the company, the brand name and the employees.
- Responsiveness-Services are performed in a prompt manner.
- Reliability-The service is performed right, the first time, and all subsequent times.
- Assurance-Knowledgeable and friendly employees are essential as customers will equate employees behavior with the entire company. If a customer has a bad experience with an employee, they will be less likely to purchase from the entire company's offerings. Customers expect technical competence and professionalism from salespeople.
- Empathy-Providing individualized attention to customers will make them feel special and keep them coming back.
- Tangibles-Some services provide physical evidence that they occurred, for example a restaurant cooks (service) and provides the food (product).