Page 26 - MARKETING & PUBLIC RELATIONS EBOOK IC88

 One expects courtesy and attention in a hotel. If these are missing, there is
dissatisfaction. But there is no significant satisfaction, when ourtesy is noticed.
 The insurance business has plenty of oppurtunity for providing wow experiences,
particularly at the time of claim. An insurance manager, noticing from the obituary
column that one of his prominent policy holder had died in an accident.
 Wow comes essentially out of recognition, which is special, not routine. Further an
experience is wow only the first time. It is expected the second time and if not
received then, causes dissatisfaction.

D. Cost of quality

(a) Cutting costs create problems

 Concerns with productivity seek ways to reduce costs. These may result in the
process being modified and perhaps, some reduction in personnel, such efforts at
reduction in costs are invisible to the ultimate consumer in the manufacturing
business.
 Readjustment of work schedules and systems may cause stresses on employee for
many reasons, like unfamiliarity with new systems.
 In the case of manufacturing, when volumes of sales increase, there is reuction in
indirect cost per unit of production. In services, the major costs are indirect.
 Govt establishment suffer enormously in quality, because the standard formulae for
economy would seem to be to
 Regulate induction of new personnel, regardless of growth in business or number of
exits.
 Centralise purchases or withdraw powers, ostensibly to regulate waste.

It is assumed that when powers are withdrawn to higher levels, sanctins will be slow in
coming and lower levels will learn to manage with less. While this is true of govt and
private organisations are not free from this problem. Sharper focus on costs should not
blur focus on customers.

 The costs of achieving, sustaining, and improving quality are classified into 4 main
groups – prevention, appraisal, internal failure, external failure.
 Spending money on appraisals will not much help in service, unlike in manufactured
goods, because of the factor of in seperability.
 The policy in services has to be right first time. It takes more time and effort to
detect and correct an error than to avoid it.
 There is effective cost reduction if defects, accident, and breakdown come down to
zero. All cost initiatives should have direct impact on customer satisfaction.

(b) Measuring costs

Sashi Publications Pvt Ltd Call 8443808873/ 8232083010