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There are quite a number of constructs of the idea of quality that are pertinent in various disciplines. This implies that there are descriptions by some scholars that might be pertinent in a given subject but not fully exhausted on another. These subjects may range from operations to market engineering to philosophy, non governmental to governmental and so on in regard to the principles that exists in that given field. In the course we are going to consider Garvin’s’ five approaches of quality from his teachings namely transcendent, product-based, manufacturing-based, consumer-based and value-based approaches and how they can be applicable to the coca cola company’s products and the most relevant approaches thereafter ( Russell et al., 2011).
The above mentioned approaches employed by the Coca Cola Company tend to guide in tracking and analyzing the Customer relationship management (CMR). Prior to getting into detail about the approach it’s necessary to define the term or concept of quality. According to Johns Oakland, it means meeting the customers’ requirements or conforming to requirements of the service and satisfying the customer. In addition to this, quality is the degree of consistency or reliability of the product. The Coca Cola Company has been in existence for centuries and is basically on of the best run companies in the globe. The following approaches however sheds light on the possible approaches to the quality it sells.
It is that approach through which quality is defined through the angle of morality, perception, philosophical or to some extent religious beliefs. In other words societies and communities have different customs and mentality systems and goods that abide by with the set norms or ethical standards are viewed as the most qualitative. Products that in actual sense possesses better value for money or quality in manufacturing but presented in a poor way either by poor marketing can be perceived as being of lower quality than those with the actual poor standards presented in a ‘good’ way (Oakland,2004). The Coca Cola Company therefore focuses on ensuring that information regarding their products are advertised and presented to the customer in a more appropriate manner. The company is also seeking to engage customers through online services as this enables them to interact with their clients like never before.
There are certain products that have the best manufacturing standards but are considered explicit or immoral in other societies and such a move may not ogre down well in the markets. Religion plays a major role in this approach as well as cultures that the customers’ posses. Hence it’s important that the qualities of products of company are presented in a more comprehensible and acceptable manner in globally.
For example, the coca cola company established a non alcoholic drink in the East African market, packaged in bottles and other materials that are similar to those of alcohol and surprisingly enough, this move was met with a lot of opposition. This was because the market group and customers were not considered appropriately. Such a move is usually a delicate because it affects the reputation of a company directly.
Product based approach
This is perhaps the most realistic measure of quality. Garvin observed that the product is of quality if it has the attributes that the customer finds not only likable but also worth the price. The most basic qualities of a quality product are the fitness for human consumption, reliability, product safety as well as the product reliability. These attributes determines whether a product is appropriate for use or not. It’s the avenue for criticism hence if not addressed well can give loophole for the competition to exploit thus driving the product out of business (Russell et al., 2011).
With the efforts of ensuring that customers are given the first priority, the Coca Cola Company has beaten the test of time and critics as its sodas are not only marketed and serviced well but also provide a gratifying and exceptional experience to its customers. Such an approach is distinctive to all long time companies which have existed for long time because it is fundamentally vital for customer retention let alone trustworthiness. The product being the baseline of all the organization’s existence should be given the most attention and error of operation should be eliminated completely.
Manufacturing based approach
This approach focuses on the set standards of a specific field of operation. This is a criterion that measures the technological and professionalism of the manufacturer of a given product. The spirit of such an approach is the protection of customers from substandard products. The attributes of products that are produced by Coca Cola Company are the reflection of the companies itself. For example, there are set standards of hygienic conditions or environmental friendliness which this organization has employed well and using as a way of gathering information from its clients. Through sales promotion such as advertisements, the company has been able to know what its clients suppose of them. It’s a common experience to hear people say that certain product from a given company is not or is of good quality. This is one way of getting feedback from customers of any given company. This means that they have a reputation of the raw materials and reliability in the use of such products.
There are various quality concepts employed by companies to be on top of the game. For instance, there is Total Quality Management (TQM) a situation of continuous improvements of the product on offer (Russell et al., 2011). There is also a worldwide certification called the International Standards of Operations (ISO) which ratify companies and organizations and grade their service liberation ability. The Coca Cola Company renews its machinery and employs the most sophisticated technology in the processing, handling and even packaging of its refreshment products. The use of unique coolants and refrigeration make the products able to sustain conditions for longer hence ensuring that the products give the best to the consumer who in turn have always in the forefront to providing feedback to the company.
The user based approach
Quality in this perspective is determined by the products utility to gratify its intended need. In this sense it’s the conformance to the customers’ expectations and promise that marketers talk of. Gone are the days when price was the only incentive of the product in the quest for customer approval. Manufacturers are able or willing to have an extra service for to their clients. Moreover, programs are set up by such companies to establish customer response in regards to a given product. These programs are aimed at product development whereby issues of customization and specifications of the product or service to the exact needs of the customer are taken care of (Oakland, 2004, pp 18). The extent to which the given product satisfies the customer is the level of measuring the quality. Coca Cola Company stress this point as it carries out promotions and advertisements all over the world to reach out to customers. Quality of the goods should also be managed, as it doesn’t happen on its own.
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The value based approach
The above mentioned measures the quality of a company through the value element of price and costs of goods. This organization’s products and services are priced at a particular level because of the accumulated cost of production. Nonetheless, the element of value for the money of such products is the basis of this approach (Russell et al., 2011, pp.5). The Coca-Cola company always sets its prices optimally for the lower target group but tends to position its prices for its more sophisticated water and soft drinks targeting the high end consumers to ensure a balance of quality and price while keeping the customers contented about the value they get.
In regards to value based approach the Coca-Cola Company is effectively the only party determining value, without soliciting input from the seller. It has seen the need to define agency opulence in terms of mark-ups, which is currently measured at a 33% maximum. Coca-Cola is taking a step backwards through treating their supplier-partners as contract labor “vendors.” In the event that agency profits effectively capped at 23%, and the client defining value on a mainly qualitative and subjective basis, agencies can expect to land, at best, of around 15-20% profitability range. It is the will of the Coca-Cola Company to essentially deploy a cost/fee reduction program that will enable the company to meet its potential augmentation (Russell et al., 2011).
It is clear that an even bigger dilemma for Coca-Cola’s agency community is that authentic reimbursement is not normally determined until the 13th month following yearly work having been initiated. In ensuring that this is in place it thus puts an undue hardship on agencies that must operate during the entire year without margin. Coca-Cola doesn’t have a cash flow quandary, but they’re creating one for their agencies by asking them to function as banks. Value based model could lead to efficiencies, yet may in fact have the inadvertent consequence of agencies trying to make a profit during the year by plummeting agency staffing levels on the account (Oakland, 2003, pp4).
Coca-Cola unquestionably has enough industry weight to enforce their will on agencies; however, it is not in fact a “model, model” for agency-client relationships. The company expects their value based approach to be embraced as an industry standard. This is because the company holds a belief that in so doing they would establish a dangerous standard in the marketplace and successfully eliminates small and mid-size resources from working on the brand. The company therefore looks forward to seeing what adjustments they make in the coming months and hearing more from the exaggerated bureau finance folks (Oakland, 2004, pp 66).
In their minds, you can’t “templatize” value-based reimbursement which is based on Excel spreadsheets. True value-based compensation requires a more customized dialogue that involves formalized inputs from the seller, which in turn leads to a “win-win” situation.
Product, manufacturing, and consumer quality approaches at this stage are the most recommended approaches among the five that the coca cola company must take into consideration. Product based approach should take center stage as it’s the products attributes that sell the company (Oakland, 2003, 5). By the presence of many counterfeits in the market it’s important that the customer loyalty is maintained through the consistent quality products that are presented in the market. The consumer quality based approach should also encompass quantitative analysis for the products.
Manufacturer based approach should also be based on determining the strategies that are important to both the company and the customers. This means that the manufacturer should improve on the quality of their operations. There should be high standards and uniqueness of the manufacturer while targeting the set international standards or conformances. I recommend the consumer based approach because it’s the choice of the consumer that is at stake here and more often than not the consumer makes the choice, is able to re use the product as well as recommend the product to others (Russell et al., 2011).
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Technically, the standards of Data Quality Framework could apply in principle to the entire master data, not only of products but also locations, among others. Nevertheless, currently the data Quality framework focuses heavily on product master data, so full applicability on other sectors has not been tested. The document might be enlarged in the future s it becomes relevant for the user society to be more specific to location master data, transactional data among others.
Nevertheless, according to the data above, Dr Alexander Fleming who is viewed as pioneer in the concept of quality management has various teachings and concepts on the issue of quality in regard to the costs originated from it. He asserts that quality refers to uniformity and reliability of a product over a long period of time while offering the best value for cash. When regarding this concept, he advocates it via given concept and criteria that monitors procedures. Deming teaches that costs are connected to the quality of products this is when putting into consideration that he was the origin of the idea of Total Quality Management. In addition, he says that productivity is increased by quality in that an increase in productivity results to a decrease in costs. This therefore implies that quality is inversely proportional to cost. I am therefore going to analyze means through which costs are reduced as well the arguments that are pro or against this concept according to the data above (Russell et al., 2011).
According to Russell et al., (2011), continuous improvement of all systems and departments ensures and fewer delays and snags are reported. There are set benchmarks in the companies that have total quality management as one of their core principles. If quality is compromised then the costs of indirect expenses rises meaning the inevitable happens i.e. the total costs raises to the final price. An efficient use of machines and appliances reduces costs too. This is a reflection of how quality is managed well. Poorly run machines and other technical wares increase the chance of tear and wear let alone maintenance costs that are more frequent. Worse still injuries and other work related accidents occur to an environment that is poorly maintained.
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Total quality management according to this scholar is effective in costs reduction because it works in a manner that is divided into three parts namely, the preventive stage of quality. The detective stage of quality and the implementing stage of quality. These stages of management of the organization assist in making sure that there is a smooth transition of the goods and services from the stages of manufacturing through to the final products with zero defects. But if such defect occurs unfortunately, there are mechanisms in place that help in sorting them out through recognized or workable manner (Oakland, 2003, pp.6).
All these operations only increase the initial costs of training and re-equipping the systems of a company reflecting an increase in short term costs but in the long term it’s the company that strands to gain with reduced costs. But what are the historical views that have existed regarding the issue of quality management versus costs? There have been various ways through which then issue of profit margin through increased quality falls into perspective. It was once believed that the higher the quality of products the additional the costs hence a reduced profit margin (Russell et al., 2011). This led to a quality guru called Juran to examine the economics of quality and price in relation to the benefits that follow suit. He discovered that the quality which is free far outweighs the costs that accompany the production.
Despite the fact that Juran came up with the concept of total quality control some conservative scholars also observe that the additional costs can’t be wished away because they are the direct contributions to the income statement of the companies in state. Increased expenditure on labor, material, design and other human resource management skills require financial investment meaning the costs also reflects on the bills. This belief is popular on manufacturers in china and other mass producing destinations in the world.
However modern day scholars have in their opinion that the cost of improving quality is less than the resultant savings. This is a modern theory that exists in the emerging markets and manufacturers who believe that the continuous improvement is better than putting all the amounts in the savings hence it’s more rewarding. Most of the people who believe this don’t look at the resultant costs as a relatively large factor because they are new in the market and invest quite a lot in the quality hence their reputation.
In contrast to all of those views some gurus believe in the fact that costs not only applies those applicable to the accounting systems namely the direct and indirect costs but also those identifiable such as the lost markets and customers, lost market share and other hidden costs like the delays and many more . Oakland (2003, pp.7) asserts that this can be reduced if quality management practices of continuous and relevant practices are adhered to. In a nutshell there has been a categorization of various quality costs that organization face inevitably. They include external and internal failure costs which are those that arise from defects from within and without the firm, inspection or appraisal costs as well as prevention costs.
The Relevance to the Coca Cola Company
The concept of total quality management in regard to the costs can be pertinent to coca-cola company in two facets. First, it’s essential in the preventive, implementation and detective quality stages through which error of operation is decreased to maintain quality. Secondly, is on the idea of quality against costs on the business’ income statement on the basis of short and long term.
The coca cola company is a company that has been capable of investing in various schemes and programs by all means owing to the financial muscle that it posses. The TQM aspect which involves incessant improvement and monitoring of numerous stages and procedures consists of prevention stages. This is a stage through which foolproof mechanisms’ aspects are implemented so as to facilitate production of a final product that is free from errors. This is achieved though counterchecking of the accurate stages within large technical procedure so as to avoid a variant of the entire process. That procedure is backed up by a detection mechanism whereby errors are noticed and trouble shot in the most suitable manner prior to the introduction of the final product to the main market.
It is correct that soft drinks have a higher income rate and quite a number of companies have ventured into market so as to outdo coca-cola. It’s almost inevitable for the company to invest cash into the forged protection mechanism whereby unlawful and substandard find their way into the market place to gain ad edge on these attempts.
On the other hand, the idea of cost against quality is very much appropriate to the company due to the industry’s nature. The soft drinks company is very much alike to the service industry whereby the most effectual mode of marketing is verbal and personalized marketing. This is due to the fact that services provided sell themselves though can be very volatile as well. The client loyalty is the moist essential means of earning the needed market share. The venture in quality systems and products goes along way in making the companies to decrease the quality costs in the long term (Russell et al., 2011)
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In a summary, the issue of quality management qualifies as one of the most misunderstood concept in all spectrums of business. It encompasses the aspect of understanding its foundations based on the models and frameworks that are tried and tested by time and experience. Quality is a subset of competitiveness of any company and all the frameworks concerning it are supposed to be managed properly. The Coca-Cola Company has the world famous Brand Management and Development department whereby all the issue of rights legal and quality assurance are ascertained in maintaining the positive image.
In the same breath, policy and strategy of any company Coca Cola included have to integrate the quality management as one of its factor to enhance performance and reduce wastage. As seen earlier a higher quality level produces a higher level of productivity which in turn reduces the costs that are believed to be inevitable both in the short and long term of any business. Another way through which management of this company to ensure quality is the involvement of all the employees at all stages so that everyone is feeling part of the process. A highly motivated worker has peace of mind and can work well and reduces the risk of malicious damages as well as potential substandard operation (Russell et al., 2011). In conclusion to this section, costs can be a topic that scares away any decision maker in any organizations because it posses a problem of profit reduction but that can be reduced significantly if and when the focus on total quality management is observed.