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Guru

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Increase Your Market Share by Making High Quality Product

07/07/2013 8:19 AM

Increase Your Market Share By Making High Quality Product

In today's competitive environment quality of the product plays major role in positioning your brand in the market. You can achieve zero defect in producing the components of the product but your product develops some kind of defects at the customer's end, then such achievement does not have any meaning. Your product should be able to satisfy customer's needs for which he has invested his money, to perform the task designated for the product.

If the product fails to perform customer's needs in the existing site conditions or the type of work which it is supposed to perform then either it was wrongly selected by the customer or no initial feasibility study was carried out by your Sales Engineer. Here is an example:-

Customer purchased an Electric Hoist for his foundry. He just specified the load carrying capacity of the hoist and height of lift. He purchased the hoist from the local dealer who was only a trader and not a qualified engineer. Dealer without ascertaining site conditions simply quoted the standard hoist which is good enough for general workshops. Hoist was procured and installed and put into operation by the customer. Within few days of use it started giving problems such as brake coil burning, motor heating up, wire rope wearing faster, rope guide getting damaged. Customer contacted the manufacturer and lodged strong complaint.

Senior Quality Control Engineer was deputed to site. He observed that it was wrong selection of product as hoist was not designed to work in hostile conditions of foundry. For such conditions special model is suitable which has higher duty, high insulation of the motor, sealed motor and panel enclosure, steel core wire rope, heavy duty D.C brake. Such hoist is expensive compared to standard hoist. To satisfy the customer, mfr. agreed to take back the std. hoist and replace it with special hoist suitable for foundry duty.

This was the case of ignorance on part of dealer and customer. It is very essential for mfr. to train the dealer's sales staff to properly understand the suitability of the product and offer product which will meet the site condions. Also customer should be educated about the technical suitability of the product. Before submitting the offer questionnaire should sent to customer so as to understand the various aspects of product suitability. Only after the questionnaire is received duly filled up by the customer, the offer should be submitted by the dealer.

Whenever complaint is received from the customers it should be recorded in "Customer Complaint" form with all necessary details such as S.No., Model, Date of Supply, nature of fault, any abnormal use by customer etc. Every month the 'Customer Complaint Summary", listing all the complaints should be registered. Also "Product wise Complaints" should be generated, from this report "Component Wise Report" can also be generated. This report will give us information about multiple failure of any components or sub assembly which needs to be redesigned or looked into details for further investigation.

Quality Circle meeting should be held every month/quarterly which is attended by Quality Controller, Design Engineer, Production Supdt., Marketing Manager. In these meetings customer complaints should be discussed in details and necessary steps either to redesign the component or changing the process or the vendor are taken. Objective should be to make the product complaint free.

The hoist mfr. referred above had adopted above system in order to minimize the customer's complaints and had established their product as top quality product. Even though their product was highly priced but it became the largest mfr. of the hoist in the country. They could achieve higher growth and higher profitability thus became the leader in the field.

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Guru

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#1

Re: Increse Your Market Share by Making high Quality Product

07/07/2013 8:42 AM

is there a question in that?

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Guru

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#7
In reply to #1

Re: Increse Your Market Share by Making high Quality Product

07/08/2013 6:09 AM

Good way to make score.

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#2

Re: Increse Your Market Share by Making high Quality Product

07/07/2013 9:24 AM

Maybe the hoist should have been spec'd correctly in the first place.........that's where the defect is, not in the hoist.

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#3

Re: Increse Your Market Share by Making high Quality Product

07/07/2013 9:29 AM

You might want to switch to decaf.

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#4

Re: Increse Your Market Share by Making high Quality Product

07/07/2013 10:39 AM

I think that is called "building what the customer actually wants, rather than what marketing thinks they should want."

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Guru

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#8
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Re: Increse Your Market Share by Making high Quality Product

07/08/2013 6:47 AM

Hero, you are right, product should be designed to meet customer's needs and marketing man should not dump standard product on the customer. May be you have to maintain large range of models but your product meets the customer's needs and customer is delighted to use your product.

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#10
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Re: Increse Your Market Share by Making high Quality Product

07/08/2013 7:06 AM

You have to find that sweet-spot where your sales numbers provide the best profit and you best meet the requirements of the customer.

There are many models that follow this road, but it is a dynamic market out there.

For instance, a typical market model is when a company builds a widget to a customer's exact specification, that widget will cost a significant amount. At some point a competing company offers a cheaper product that appeals to a wider segment of the market population, but does not meet the exact requirements of the customer buying from the first company.

That customer usually migrates to the new company because they are willing to trade some of their requirements away to gain a savings on cost.

A savvy company will continuously access and adjust their product line based on sound market analysis to appeal to the largest segment of the market they can and thus gain market share. This means that their products may not be all things to all people, but the advantage is greater profit for the company and lower cost for the consumer since that widget is now produced in greater numbers (economy of scale).

The root problem for many companies is poor marketing or in some cases, marketing taking a tyrannical role in the company. We saw that in the 1960s and 1970s with the auto industry in the US where car companies got away with telling the customer what they should drive. That changed when the Japanese started delivering product that was specifically customer market oriented (i.e., listening to what the customers wanted and continuously improving that goal) and permanently shifted the market away from the US manufactures. It took decades for US manufactures to retool their marketing and lines to catch back up, but they permanently lost market dominance.

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#12
In reply to #10

Re: Increse Your Market Share by Making high Quality Product

07/08/2013 7:34 AM

Well said Hero.Good points to learn from past experience.

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#5

Re: Increase Your Market Share by Making high Quality Product

07/07/2013 3:11 PM

There's another scenario:

Customer: "I need a xx ton crane for my foundry".

Salesman: " I've got just the crane for you. It's our FC265 crane." (FC= Foundry crane)

Cust: "How much?"

Sales: "6 million rupees."

Cust: "SIX MILLION RUPEES?????????????????????" Are you crazy? I can get one from Bill's used crane exchange for 1 million rupees. Don't you have anything cheaper?"

Sales: "Well, I suppose the CC150 might be OK. (CC= Crumby crane) It's on special for 999,999 rupees, today only".

Cust: "Fine, I'll take it".

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#9
In reply to #5

Re: Increase Your Market Share by Making high Quality Product

07/08/2013 6:50 AM

Lyn, good script for drama. You have good experience of our customers and sellers here in India. Any Indian connection?. or experience.

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#13
In reply to #9

Re: Increase Your Market Share by Making high Quality Product

07/08/2013 8:49 AM

No Indian connection.

It's universal.

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#6

Re: Increase Your Market Share by Making high Quality Product

07/07/2013 3:24 PM

The engineer writes the specification for the item which needs to be purchased. From there, it goes to the buyer/contracting department. There the buyer assembles a list of potential service providers who can meet the specification. A contract specialist writes the contract spelling out the price and specifications which must be met along with other things like time frame, warranty, etc. It all begins with the engineer. If he hasn't done his homework, then no one down the chain can be blamed at the outcome. Price competition, not market competition is the way business is done today. Many companies that had produced quality products have either cheapened their product (gone overseas), or went out of business. There is a need for quality, but it is a niche market only marketable to those who can afford it. Everyone wants quality (even in the U.S.), but not everyone can afford the price. Companies have learned that they can make more money selling to the masses than catering to the few who can afford.

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#11
In reply to #6

Re: Increase Your Market Share by Making high Quality Product

07/08/2013 7:09 AM

Ronseto, very good comments and observations. What ever you have described about procurement procedure, is followed by corporate sector during the initial stage of project implementation. But there are many purchases which are made by small/medium size units with very few persons involved in this activity. In corporate sector there is engineering consultant who makes a book (tender specs) giving all information about site condition, location of the product, technical and commercial terms and conditions.

But small units simply send one page enquiry and rarely give detailed technical requirements. My case study was pertaining to such customers. I just wanted to share my experience with fellow members assuming that many of us had faced similar situation and may be more knowledgeable than me.

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Anonymous Hero (2); Fredski (1); lyn (3); phoenix911 (1); ronseto (1); suresh sharma (5)

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