Why Quality is important
Quality
Quality means to produce a good or service which meets the needs and requirements of
its consumers.
Businesses usually find out about the needs and requirements of consumers through
market research.
Once they know what these needs are, the business can set the quality standards that are
expected by consumers.
The products should be free of faults or defects.
Quality standards
Quality standards refer to the minimum standard of production or service acceptable to
consumers.
Types of quality standards
Design standards: helps a business create the best possible product, which consumers find
more valuable than other products in the market.
Process standards: helps a business to produce its goods and services at the lowest
cost.
Combining design standards and process standards helps a business gain a competitive
advantage and gain market share.
The importance of quality to all businesses
Develop a strong brand image
CAMBRIDGE IGCSE BUSINESS STUDIES NOTES Page 1
, Keep customers and attracts new customers
Reduce costs, customer complaints and returns
Charge a premium price
Encourages wholesalers and retailers to stock the product
Lengthen product life cycle
Builds brand loyalty
Maintains good reputation
Increase sales
Attract new customers
Develop a strong brand image
Building a strong brand image based on quality makes it easier for a business to introduce
new products to the market.
Customers will know the reputation a business has for quality products and they will
assume that any new product is of the same quality.
Keep customers and attracts new ones
This is known as customer loyalty.
When a business has a reputation for producing quality products it is easier for it
to keep its existing customers and attract new ones.
The long term success for any business relies on getting customers to ‘repeat
purchase’ i.e. To keep coming back for more products.
Reduces costs, customer complaints and returns.
Products that do not meet the needs and expectations of customers will be
returned.
The product will have to be replaced or the customer may want the money they paid
for the item refunded.
Returns from customers increases costs and reduces profits. If a large number of
customer complaints and returns are made then this could damage the business reputation.
Existing customers will stop buying the firms products and the firm will also find it
difficult to attract new customers.
Charge a premium price
Many consumers are prepared to pay a higher price for a product that is seen as being of
better quality than similar products on the market.
If a business is able to charge a higher price for its products compared to that of the
competitors then this may increase its profitability.
E.g. apple computers
CAMBRIDGE IGCSE BUSINESS STUDIES NOTES Page 2
Quality
Quality means to produce a good or service which meets the needs and requirements of
its consumers.
Businesses usually find out about the needs and requirements of consumers through
market research.
Once they know what these needs are, the business can set the quality standards that are
expected by consumers.
The products should be free of faults or defects.
Quality standards
Quality standards refer to the minimum standard of production or service acceptable to
consumers.
Types of quality standards
Design standards: helps a business create the best possible product, which consumers find
more valuable than other products in the market.
Process standards: helps a business to produce its goods and services at the lowest
cost.
Combining design standards and process standards helps a business gain a competitive
advantage and gain market share.
The importance of quality to all businesses
Develop a strong brand image
CAMBRIDGE IGCSE BUSINESS STUDIES NOTES Page 1
, Keep customers and attracts new customers
Reduce costs, customer complaints and returns
Charge a premium price
Encourages wholesalers and retailers to stock the product
Lengthen product life cycle
Builds brand loyalty
Maintains good reputation
Increase sales
Attract new customers
Develop a strong brand image
Building a strong brand image based on quality makes it easier for a business to introduce
new products to the market.
Customers will know the reputation a business has for quality products and they will
assume that any new product is of the same quality.
Keep customers and attracts new ones
This is known as customer loyalty.
When a business has a reputation for producing quality products it is easier for it
to keep its existing customers and attract new ones.
The long term success for any business relies on getting customers to ‘repeat
purchase’ i.e. To keep coming back for more products.
Reduces costs, customer complaints and returns.
Products that do not meet the needs and expectations of customers will be
returned.
The product will have to be replaced or the customer may want the money they paid
for the item refunded.
Returns from customers increases costs and reduces profits. If a large number of
customer complaints and returns are made then this could damage the business reputation.
Existing customers will stop buying the firms products and the firm will also find it
difficult to attract new customers.
Charge a premium price
Many consumers are prepared to pay a higher price for a product that is seen as being of
better quality than similar products on the market.
If a business is able to charge a higher price for its products compared to that of the
competitors then this may increase its profitability.
E.g. apple computers
CAMBRIDGE IGCSE BUSINESS STUDIES NOTES Page 2
