Added: 11.05.2010 11:57
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Danger of loosing customers through lowered quality

If customers don’t meet quality they expect they will easily loose their faith into the company, and start to buy products of the competitor.

Mercedes Benz has been synonymous with luxury for over 100 years, and has always had a reputation of the high quality and endurance over time, but as all things do, they changed. So is the case of the Mercedes brand, with dramatically falling behind their competitors from being the number 1 car in J. D. Power’s test for problems occurred within three years of ownership in 1990 to the place 26 in 2003. (Alex Taylor III 2003)

The reasons are many, and they are still working on them, but the main problem is the customer dissatisfaction. Lets think a moment of investing 100.000 $ or more on a luxurious car, that promises you to fulfill all your needs of high technology and comforts, and end up with an dysfunctional car that after a short time can’t even fulfill it’s basic purpose, which is to move. The main reason for problems has been the lack of preparation and testing with the new models. The company rushed to introduce them into the market and that means lots of unseen problems. (Alex Taylor III 2003)

In 2005 there were 1.3 million recalls from models of 2002 to 2005. They had to change engines into some of the models, take some back and provide two-year-full-service-warranties to the car owners. (Autos: Can… 2005)

The future
It seems the company is going trough a rough patch, and is going to take a while after the public regain the confidence with Mercedes Benz to take it to the number 1 place again, but most likely it will be a reality in the not so far away future, the company started to check it’s procedures and changed its ways to get into the lost throne; other companies are filling the gaps left by Mercedes but with the conviction that wont be for long. (Autos: Can… 2005) Mercedes has started to regain back its reliability in resent tests made by J.D. Power (J.D. Power 2010), and it is to be seen when the company can regain peoples trust into its quality. (Autos: Can… 2005)

What?
In the modern world of high competition production costs needs to be optimised and new products needs to be brought to markets as fast as possible. While optimising and speeding up the production many companies give up part of the quality of the product. This sometimes leads into customers losing their trust into company.

Why?
When large sum of money is invested in some product people expect high quality. Reliability and durability is one factor of quality from consumers view point. If people have come to expect some level of quality from company’s products, even slight drop in it, might make company to lose part of the customers.

Who, When and Where?
Even though the example of quality problems coming up from rushing production comes from the Mercedes Benz, the danger of pushing products into markets when they are not tested enough or cutting the cost of quality should concern all companies of high quality, all the time and everywhere.

References:

Autos: Can Mercedes Be a Star Again?. 2005. Time: Business & Tech. [Online]. [Viitattu 18.4.2010], http://www.time.com/time/magazine/article/0,9171,1115672-1,00.html

Alex Taylor III. 2003. Mercedes Hits A Pothole Owner complaints are up. Resale values are down. And competitors are gaining ground. Is Mercedes-Benz losing its shine?. FORTUNE Magazine. [Online]. [Viitattu 18.4.2010], http://money.cnn.com/magazines/fortune/fortune_archive/2003/10/27/351665/index.htm

J.D. Power and Associates. 2010. Despite overall industry improvement in long-term dependability, some vehicle brands don’t receive the credit they’re due. Westlake Village, California.

Research question: Companies must keep up with customers expectations for quality, even when speeding production and cutting costs.

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