Customer

Classic Airlines and Marketing

The first purpose of marketing is to sell products or services by obtaining attention from potential or current customers. If an organization expects long-term profits and maintains their customers based on loyalty, an organization should understand that marketing requires continuous customer management and understand their customers’ needs and wants to establish long-term customer relationship. This paper will discover the marketing challenges, and corporate culture along with marketing concepts that a company can adapt to get over a situation the company may face.

Challenges and corporate culture

Classic Airlines has faced a negative business environment that has affected the company’s profits such as an increase of labor and fuel costs along with a decrease in stock price, and a number of Classic Airline rewards program showing customers’ loyalty (University of Phoenix, 2010, Week One Supplement).

The CEO and CFO of Classic Airlines believe that the company can overcome the negative situation by implementing a cost reduction program and price will be the top priority when customers choose the airline. However, the rest of management members believe that Classic Airlines should implement a customer-oriented marketing management program to re-establish company’s position in airline industry. The management groups have extremely different views to solve the problems for accomplishing the company’s goals. In this scenario, employees believe that top management has not listened to employees’ suggestions to solve the problems. The company does not share the same values and blames each other on issues that Classic Airlines is facing.

Marketing concept

Kotler and Keller (2006) stated, “Marketing concept holds that the key to achieving organizational goals consists of the company being more effective than competitors in creating, delivering, and communicating superior customer value to its chosen target markets” (p. 16). In this scenario, CMO and team strive to re-build the customer relationship by implementing a new strategy by listening customers’ demands and wants, and develop an effective customer relationship management program so the company can get back customers whom left to other competitors by satisfying their lost customers. To find out customers’ needs and wants, the customer service department conducts customer interviews with existing and former top-level frequent flyers (University of Phoenix, 2010, Week One Supplement).

Production Concept

The Classic Airlines scenario shows the production concept. Kotler and Keller (2006) stated, “Production concepts holds that consumers will prefer products that are widely available and inexpensive” (p. 15). The Classic Airlines had cut airfare in 2004; the company cannot lower the price further to survive in the severe price war to attract customers to Classic Airlines.

Product concept

Kolter and Keller (2006) stated, “Consumers will favor those products that offer the most quality, performance, or innovative feature” (p. 15). The CMO believe that a price is not the top priority when customers choose the airlines based on conversions with customers. When Classic Airlines provides satisfied service to customers, customers will choose the Classic Airlines.

Target Market, Positioning, and Segmentation

Classic Airlines shows target market, positioning, and segmentation marketing concepts.

Classic Airlines develops segmentation strategy to identify the needs and wants from different groups that are leisure and business travelers in this scenario. The segmentation strategy allows Classic Airlines to have a different targeting plan by analyzing demographics, behaviors, personalities, and lifestyles in their customer groups (University of Phoenix, 2010, Week One Supplement). Classic Airlines can provide a differentiated service to customers based on their needs and wants.

Relationship marketing

Kotler and Keller stated (2006), “Relationship marketing has the aim of building mutually satisfying long-term relationship with key parties – customer, supplies, distributors, and other marketing partners to earn and retain their business” (p. 18). CMO and team strive to make marketing alliances with other airplane partners to bring up the customer loyalty by providing convenience using a single network.

Conclusion

Marketing is the way to communicate with customers and provides an opportunity to analyze customers, competitors, and market trends. Marketing helps identify for the company what customers needs and wants are, understanding those needs and wants helps the company obtain customers’ satisfaction and in turn allow the company to be competitive and profitable for the long-term.

Reference

• University of Phoenix. (2010). Week One supplement: Exhibit A. Retrieved October 25, 2010, from University of Phoenix, Week One, MKT/571-Marketing Course Web site.
• Kolter, P., & Keller, K.L. (2006). Marketing management (12th ed.). New Jersey: Pearson-Prentice Hall

KONE is an elevator company with a new and innovative product to entering the market. This company is faced with the problem of what they want to charge and how they are going to position this newest product without cannibalizing their existing product lines. Another problem the company faces is how and to whom they should market this new elevator application. The company can rule out marketing to the high rise gearless traction market because their technology doesn’t apply to this market, as of now. Although they are not able to market to this group the benefits of gearless traction can be used in comparison to the geared and hydraulic elevator systems. One problem that was learned from the preliminary markets was that customers worried that KONE would be able to price gauge them since they were the only ones with this sort of technology. The existing products offer the customer a number of options. Depending on who is making the buying decision they can base the purchase on up-front costs, lifetime savings, or quality of the equipment.

Strengths:

No machine room that creates greater architectural freedom and more usable revenue-generating space

Compare to gearless technology: controlled speed, ride comfort, lower maintenance

Cost savings: energy efficient, less expensive electrical wiring and fused, and no oil is used

Lower overall construction time

Weaknesses:

 only can be used on 8 to 13 person elevator
used for 12 floors or less (if machine room is to be omitted)

Positioning of this product is very important. They could market it in-between the hydraulic and the geared traction or they could position it as top of the line. If they were to position the ecodisc just above the hydraulic elevator the customer would receive all the benefits listed. I think that they should keep the hydraulic as their low-end model. The reasoning behind this is that why give the customer all the added benefits of the ecodisc for a low-end price. If the product is to be positioned at this level I believe that they would cannibalize their existing geared traction line. Why wouldn?¦t a customer upgrade to the ecodisc from the hydraulic? They would stand to gain the most value of the purchase. This would only be defeating the purpose of the new technology. With the ecodisc being positioned above the gear traction the person in the market for a new elevator has one more option to consider depending on their needs. If they just want something to put in the building at the lowest price they have the option of the hydraulic elevator. Also, if this is the option they are choosing why would you recommend the ecodisc as an alternative.

They are just looking for the cheapest alternative, not the added benefits that the ecodisc can provide. Even though the German market consists of 60% hydraulic elevators I don?¦t think ecodisc is the next best alternative from the companies standpoint. This number could be attributed to the fact that the general contractor made the final elevator decision 50% of the time and they may have been looking for the cheapest option. You also have to consider that 40% of the customers are in the market for geared traction. The interesting thing to note is that about 26% of these are of the more expensive PU type. As of now only 2% of KONE’s German sales come from this more expensive elevator. (See table 1) This shows that not everyone is looking for the cheapest alternative or they may have design issues that KONE would be able to eliminate. Positioning the ecodisc as their top of line product seems to be where they should focus their attention. Besides that, like we talk about in class you really don?¦t want to be in the middle. Consumers usually want a product at the bottom or at the top. If this option is used it would also eliminate the concern of cannibalizing their existing product line because it gives the customer choices.

Table 1

Concerning pricing the company seems to be in the best position at showing the overall benefits of installing and running the ecodisc. They can approach this in a number of ways. They could show the construction company the money saved by not building the machine room. Also, they could appeal to the architect by giving them more creative freedom in designing a building without having the limitation of including a machine room. The next alternative would be to appeal to the property developer who is looking to resale the property. They would be interested in passing on value to the person that would be buying the building. With this being said I believe that the same approach could be used for both the property owners and the property developers. I think that KONE should market the ecodisc as an alternative to the existing geared traction elevators. Even though this is a smaller market I believe that some people will always be in the market for the lowest price alternative and why sell themselves short by offering it as an alternative to hydraulic systems. If the customer wants to upgrade to the next best alternative they are able to buy the geared traction. If they were to position it in the middle they would lose the sales of the geared traction.

If you price the geared traction higher you would completely lose this market. I mean why would someone buy a more expensive system when they can get all the benefits of the ecodisc for a lower price (quality, over-all costs, and lifetime costs). I believe this is why they did so well in the Netherlands. They offered ecodisc as a substitute to the hydraulic system. The ecodisc sales in the Netherlands show that the positioning and the pricing could have been better. This would also eliminate the worry that customers have regarding price gauging. If they are worried they still have other options and KONE will be able to supply the alternative. Regarding who to market to I believe they should market to the property developer that is looking to sell, the owner, and the architect. As you can see from Exhibit 1 this group seems to benefit from the ecodisc the most. This seems to the best approach because these groups of people stand to gain the most benefit form the installation of the ecodisc. The reason I have not chosen the construction company is because the savings don?¦t seem to outweigh the benefits. I don?¦t see them pushing to put in a better elevator to save 5% of construction costs. Also the learning points showed that the construction company wasn?¦t passing on the saving but instead charging a surcharge to customer. From this we learned that KONE could no longer show them the cost savings because this priced the product even higher.

Exhibit 1

With all this being said I would price the product higher than existing geared traction elevators to give more options depending on who was making the purchase. One advantage KONE has is that they are in the evoked set for elevator companies and 96% of purchases were customer initiated in the German market. They could use this to there advantage by presenting their product to people that are really interested. They don?¦t have to go out there and market themselves as a company but rather show the customer the features and benefits of each particular product they offer. Also, this would give them the opportunity to up sell the new technology from the previous alternatives. This would also help to overcome the sales people shortage that they seem to have in the German offices. The company would be able to focus more time and energy on what is important to the customer. One of the benefits I would focus on is the lifetime cost savings because this group is looking for a better alternative than the geared traction. One promotion I would consider would be to have energy companies offer rebates to the customer for a specific amount of time. Just like we do here in the US with energy saving appliances. First of all I would be appealing to the groups looking for overall costs and I would also be creating a pull strategy by these people.

This would enable me to by-pass the construction companies who don?¦t really see the cost savings. Another benefit to this approach is that I could focus on the overall benefits rather than the up-front costs. I would use the strategy that was used in the Netherlands by contacting clients and then presenting the material face to face. This seemed to be effective and questions could be answered right away. I would also continue to use the marketing kit. This has all the benefits in one convenient package. Some of the launch options I would use are the direct mail (to invite customers to presentations) and make use of the 25 architectural journals. Not only would this help to bring in business but it would also show that the product is in the market place. Even if someone were not in the market right now, when he or she was ready the ecodisc would come to mind.

The case briefly talks about modernization of existing equipment. If this consisted of replacing old and worn out equipment I think this could be an attractive market. You could market this to the building owner in a way that would seem appealing to him. Especially, since most of the cost savings are in the yearly up keep. These are owners had nothing to do with the up front cost and when it came to replacing old elevator equipment they are going to take into account the overall costs of running the machine. Also, when pricing the disc, KONE can now just take into account the disc price. They will not have to include the shaft and elevator since they are already in place. This could be a benefit to the building owner so they don?¦t have to come up with a large up-front cost. Another benefit to owner would be the added space without the machine room.

This is to propose Kone Aufzug to launch the new MonoSpace system as a strategic dominant of the low-rise residential elevator market. Considering recent trend of decreasing profit at Kone, we are going to market MonoSpace as many as possible with truly competitive price setting and appealing the technological advantages in order to benefit Kone. We do not expect increasing trend in constructing buildings equipped elevators, therefore we focus on profits not market share. We project the MonoSpace sells 98% of the low-rise residential, and 80% of all Kone Aufzug sales in 1997.

The successful MonoSpace launch in Germany is extremely important for us and for Kone, because Germany is the largest in the European market which attains the largest proportions in Kone business. The MonoSpace?fs technological advantages accompanied by low cost would enable us to win the race in the market and also we can surely make profitable service contract by selling the MonoSpace because of the unique technology which no other companies can not offer services on it. 

Learn also which statement correctly compares the two businesses?

The test market done in Netherlands, France, and UK suggests that MonoSpace would sell well if MonoSpace is priced slightly above current PT or PU, and PH is not much less expensive than the MonoSpace. According to our sales data in Germany where PH is dominant because of its relatively inexpensive price setting, customers are really cost conscious and price elasticity is high. If we set the price of the MonoSpace higher, customers would purchase PH as they do now. Therefore, we are going to set the positioning as any customer in low-rise residential market except for extremely initial cost conscious customers by the market penetration price setting. With the price of DM70,000, there is no reason for purchasing PT considering many advantages of the MonoSpace above PT, and considering substantial cost reduction in energy consumption (8,580DM in 6years) and specification advantages, we assume 98% of low-rise residential market customers purchase the MonoSpace and we expect the MonoSpace to counteractant to the market declination and project it would sell at least 1,400 units which is the number we sold in 1995.

Since we project large number of the MonoSpace units will be sold in German market because of the innovative technologies and competitive price, we are going to take large scale of launch events. We recognize this is the time to get brand awareness and contracts with this technologically advanced MonoSpace. Almost all decision making on what kind of elevator customer purchase is done by the general contractors or architects whom we are going to focus on. Our launch events consist of almost all kinds of options we have.

With those plans, we project we can sell at a profit of DM138,000 by launching MonoSpace in Germany market, even though we assume we might have to discount price down to DM65,500 due to the bidding competitions, competitors?f response of discounting prices of their units, or recent price dropping trend.

Futronics with its offices in Lexington, Massachusetts, was considering using outside source services and move from using the main office stores. Steve Hastell, who was the supply management manager, was given the responsibility of finding out which services could be efficiently outsourced. Previously the company had been making profits from the sales they made to customers of both products and services but due to competition they had to rethink their strategies.

Outsourcing is quite common in United States; companies are now outsourcing products and services in order to cut costs and make their products more popular. Futronics Inc. have to reduce the cost of office supplies so that they may make profit. (wables13, 2010). Relevant Facts (Data) The company experienced competition from the their business rivals, this in turn led to reduced sales of their products and reduced demand for their services, there was also a reduction on the profits that they had earlier been making. The supply management branch decided to take part in the cost cutting decision.

The main store and the tasks that they performed were reviewed after a proposal was received by the supply management department from two companies suggesting that futronic considers reviewing their operations, and adopt the outside company’s record keeping (futronics, PDF). The main stores were established when an investigation conducted discovered that the company could save a lot of money if they concentrated in buying of products in bulk and sales of stationeries and other supplies. These stores serviced forty-two area sites in Lexington from a warehouse.

The inventory was for $140,000, a list of the products that they had in stock was made after every six months, there were four people working at making sure that every thing was in order. Two people dealt with the products directly, one person worked at data entry of the orders that they were getting, while another person would wrap, label and put the products into the truck. The month of December is when they would have a lot of work but on the other months the work would not be as much, there was a high demand for calendars and other items (futronics, PDF).

Every year the personnel and the business location would cost the company $200,000, with catalogue of 500 products, the delivery of the products would be made everyday using a truck that also delivered letters and also was used to take people from one store to the other. The customer complaints about the delay in the delivery of the products that they had ordered were many; in addition, the stores would take too long to get new products for their customers.

The management had not at that point realized that the system that they had been using for such a long time was not working effectively and that there was need for a new system to be established. The managers had earlier on authorized all departments to find solutions in order for the company to make saving and get profit in the process, the departments were to make reports on the same. It was about the same period when the two companies made proposals to provide services to Futronics.

Some companies in Boston had been using outside services and in the process they had made considerable savings for their companies, Steve Hastell had also heard the same. When he received proposals in June from interested companies, he realized that they would be able to get the same products that they had earlier on been selling, at a cheaper cost and they would be able to make a 6% in savings, and he also realized that the catalogue had 600 products (futronics, PDF). The period that it would take for an order to be delivered would also reduce from about three weeks, which it would earlier take, to be not more than ten working days.

This was according to the proposals that Futronics had gotten. Steve and his partners were apprehensive about the whole issue, among their concerns was about the reduced control they would have, and also about whether or not the proposed system would effectively work. There was also the issue of the amount of money that the outside company would get from the deal. All the outside companies proposed a three year contract with possibility of its renewal after the expiry of the contract. There was also the possibility of the four people in the main stores losing their jobs (futronics, PDF).

Options and Analysis There are several ways that Futronics would be able to cut costs and ensure that they made more profit in the process. The table below offers some suggestions on how to cut cost and the benefits it would have on Futronics as a company. HOW TO REDUCE COST IDEAS AND BENEFITS The lowest purchase saving should be about $48,000 to $50,000 annually. ($900,000 x . 90 x . 06 = $48,600) By doing so, they would be able to make a saving of 6 percent from about 90 percent of products that they would buy. However these products have to be of good quality so that they may sell well in the market.

Do away with the stores operation, the carrying cost of the inventory was of about $42,000 annually ($140,000 x . 30 = $42,000 per year) By doing away with stores operations, the carrying cost would also be eliminated. Reduce the cost of operation including personnel and facilities cost. This would see a cost reduction of about $200,000 annually, provided that after the four people are laid off, their working space would be used for other useful businesses. Offer one of the outside companies a three year contract.

There would be a decrease in the amount of money that Futronics would use in the purchase cost. The customer would therefore be able to make more orders efficiently. Do away with supervision of operations. This would help as more time would be used for purchase work. Increase the number of operating sites when they give a contract to one of the supply house. With the increase of operation sites, the delivery of products to these sites would be expensive and taxing but the supply houses would be able to handle the situation effectively. Cost analysis table.

Outsourcing comments and Concerns There are benefits that come with outsourcing as the above table explains, but on the other hand, there are some concerns that Futronics should have in mind as they consider outsourcing. The table below gives a list of some of the disadvantages of outsourcing according to Fleming. CONCERNS Futronics was in danger of losing the control that they previously had over the products and the services that they offered their customers. Not unless some of their systems were incorporated in the new system, they would not be able to retain control.

The three year period in the contract would be a long time; Futronics therefore had to make sure that they chose the best supplier who would provide good services. Choosing to do away with the stores operation was a huge decision which had to be thought of effectively, the establishment of the same system if need be could be hard and therefore the right decision is vital. The informal records at the sites have to be efficiently monitored in order to ensure that they do not become uncontrollable by the management; Futronics has to therefore make sure that they keep a close eye on all the site records.

Concerns table. Steve Hastell and his team must consider whether the changes that they would implement and the decisions that they were to make would be beneficial for the future of the company. They should decide whether there will be need for different storage systems. Before a proposal from any supply house is accepted, the supplier must be aware of what is expected from his company in terms of how to perform work diligently.

Operating details and the work expectations should be included in the contract, there should also be a statement explaining the reason for an increase in prices, these details are to be put in place before Futronics signed any contract (Fleming). Steve Hastell had to decide the process he would use in assignment of the contract, he had to decide whether the companies would have to bid for the contract or whether he would choose two of the companies whom he felt would offer good service and then reach an agreement with the better of the two.

It would have been better if the four people were to be transferred to other offices if and when Futronics chose to close the stores operations. (Fleming). Conclusion The facts on outsourcing and its advantages far outweighs the disadvantages, by outsourcing, Futronics would realize better sales and profits. They would also be able to cut cost on the personnel and operation. Steve Hastell can therefore do a background check on the interested supply companies in order to ensure that he has chosen the best among the ones who were interested.

They could also decide to use a supply house only for certain products while remaining with the old system for the rest of the items. This will help Futronics to have an idea of how outsourcing works, and to decide whether or not it was effective. Outsourcing Issues In its scope of work the senior management should consider making sure that the supply house that they choose to work with are capable of maintaining Futronics work ethics. The supply house could try to merge their operations with the already existing system for the benefit of both companies.

The contract should also accommodate the both parties involved in order for them to be able to work well together; it should also not be ambiguous. Reference Fleming, E. L. Outsourcing & Make or Buy Decisions-Purchasing and material management http://polaris. umuc. edu/~bgoodale/Admn626w/mod6cp. html FUTRONICS, INC. http://highered. mcgraw-hill. com/sites/dl/free/0072290706/71352/futronics. pdf Wables13 (2010). Futronics http://www. oppapers. com/essays/Futronics/319286

Questions

• Consider the two categories of products that Timbuk2 makes and sells. For the custom messenger bag, what are the key competitive dimensions that are driving sales? Are their competitive priorities different for the new laptop bags sourced in China?

In the 2nd paragraph you can easily find ‘A quick click of the mouse and the bag is delivered directly to the customer in only two days’. It is the best answer for ‘what are the key competitive dimensions?’. Only need to do for customers are just clicking and wait for the bag which will be customized based on their order and design. And Timbuk2 delivers ‘the special bag’ to the customer within 2 days.

Customized good quality and quick delivery system are the Timbuk2’s key competitive dimensions. The main reason for manufacturing Tambuk2 laptop bags sourced in China is ‘the cheap labor costs’. With cheaper labor cost, Tambuk2 could hire the group of hardworking craftspeople. It means factory in China for Tambuk2 can have not only cheaper labor cost but also the group of hardworking crafts people. So Tambuk2 can fulfill the customers expectation of quality bag with better price.

• Compare the assembly line in China to that in San Francisco along the following dimensions: volume or rate of production, required skill of the workers, level of automation, and amount of raw materials and finished goods inventory.

Volume or rate of production

Factory in San Francisco – Customized bags depends on the orders from customers. Factory in San Francisco – Standardized products such as laptop bags and Accessories has stable orders. It means that factory in China has bigger rate of production.

Required skill of the workers

Factory in San Francisco – A small group with much experience and skills needed for producing the customized bags. Factory in China – A large group
members with low skills needed for producing the standardized bags.

Level of automation

Factory in San Francisco – Customized bags which is made by skillful employees are required less automation level. Factory in China – Laptop bags of Tambuk2 are standardized products from China. It means they don’t need much skillful employees, but they need more machines for mass production.

Amount of raw materials and finished goods inventory

Large amount of raw materials and finished goods inventory has to be maintained as customers can choose from any color, straps, pockets etc while ordering the products. Low stock of raw materials is required as all the materials can be sourced within an hour drive of the factory

• Draw two diagrams, one depicting the supply chain for those products sources in China and the other depicting the bags produced in San Francisco. Show all the major steps, including raw material, manufacturing, finished goods, distribution inventory, and transportation. Other than manufacturing cost, what other costs should Timbuk2 consider when making the sourcing decision?

1. Factory in San Francisco
2. Factory in China

Other Costs

• Costs related to a wide range of risks & Insurance
• Quality checking costs
• Resolving cultural and communications issues
• Marketing costs
• Sales commission and sales sala
• Shipping & Distribution costs

Part A 1. 0 Introduction of the organization: Jakel Silk House Jakel Silk House was established with the belief that are the catalysts to bring fashion in Malaysia from a medium to higher level with the support of the distinguished partners and clients. The firms are working together with the fashion industry to user in a new era of fashion, from a company of Malaysians for Malaysians. The focus of Jakel Silk House is to put one of Bumiputra on the Malaysian stage of fashion fabrics. The company realizes that it is a daunting task.

However, the company believes that in this endeavor comes opportunity. Mission or objective is very important to each business firm and the firm must have clear mission so that they can make good planning to achieve their objective. Jakel Silk House mission is to innovate, recreate and to rediscover the area of fashion fabrics. Other than that, Jakel Silk House has something for every woman, every home and every occasion. Choose from a spectrum of sub line creations ranging from high-end prices for limited edition pieces to the very affordable.

Fabrics from Jakel Silk House display an elegance aura of grandeur with the most saleable fabrics in expression of chiffon, crepe, satin and jacquard silk. Some of this rich range of silk are immaculately finished in embroidery of embellished with fine beads, sequins, machine-sewn of meticulously hand sewn. In addition, to a contemporary collection of crepe, georgette, tissue and silk in various colors, patterns and designs, Jakel Silk House also has wide range of fabrics for curtains and upholstery complete with matching trimmings.

Other than that, Jakel Silk House also provides a made-to-measure service where customers select the fabrics of their choice and Jakel Silk House will complete the task right up to installation. As a leading supplier of fabrics, Jakel Trading has been in the forefront bringing in the finest fabrics, silk and textiles products from all over the world including exclusive fabrics from Korea, France, Spain and Italy. The interesting thing about Jakel is their focus solely on high-end fabrics. Jakel are also extending their product line to cater to the mid-range market.

Because of their expertise in this industry, they are able to bring in more affordable products. Some of the more renowned brand names found at Jakel’s stores are Valentino, Pierre Cardin, Zegna, Armani, Lorenzo Riva, Ungaro and Solstiss. Part B 2. 0 Introduction to TQM (Total Quality Management) TQM is a set of management practices throughout the organization, functioning as to ensure the organization consistently meets or exceeds customer requirements. TQM places strong focus on process measurement and controls as means of continuous improvement.

TQM is a description of the culture, attitude and organization of a company that aims to provide, and continue to provide, its customers with products and services that satisfy their needs and demand. The culture requires quality in all aspects of the company’s operations, with things being done right first time, and defects and waste eradicated from operations. Important aspects of TQM include, customer-driven quality, top management leadership and commitment, continuous improvement, fast response, actions based on facts, employee participation etc.

Customer-driven quality is all about customer satisfaction and it is seen as the company’s highest priority. The company will only be successful if customers are satisfied. The TQM is sensitive to customer requirements and responds rapidly to them. In the TQM context, `being sensitive to customer requirements’ goes beyond defect and error reduction, and merely meeting specifications or reducing customer complaints. The concept of requirements is expanded to take in not only product and service attributes that meet basic requirements, but also those that enhance and differentiate them for competitive advantage.

Top management leadership need the TQM method to success and have the best commitment. It has to be introduced and led by top management. Attempts to implement TQM often fail because top management doesn’t lead and get committed. Instead it delegates and pays lip service. Commitment and personal involvement is required from top management in creating and deploying clear quality values and goals consistent with the objectives of the company, and in creating and deploying well defined systems, methods and performance measures for achieving those goals.

These systems and methods guide all quality activities and encourage participation by all employees. The development and use of performance indicators is linked, directly or indirectly, to customer requirements and satisfaction, and to management and employee remuneration. Base on our interview, Jakel Silk House had applied TQM on its marketing department as well and had achieve many sucess in the business. Table 1. Hierarchy of TQM principles by Deming No. TQM Principles 1Decision of management to attain the highest quality of work. 2Decision to satisfy requirements of the consumer Rendering of some functions and responsibility from the top level down 4Group influence on the individual in team work 5Regulation of system and processes inside the organization 6Definition of quality and the creation of the quality standards 7Quality measurement in chemistry laboratories 8Sustainable quality improvement in chemistry laboratories 9Comparison of experiences at other chemistry laboratories 10Perception of the whole process 11Improvement of employees qualifications and training 12Definition of problems in one’s organization 13Solution of problems in one’s organization 14Quality assurance in one’s organization 5Active management in chemistry laboratories-actions for avoiding problems 16Ensuring quality of material suppliers 17Communication inside the organization 18Recognition and inducement of employees, i. e. a reward system Part C 3. 0 Why/where (division/department/location) and how the issue topic/ method/ practice is implemented/applied in the organization 3. 1 Marketing Department Jakel Silk House implementing the Total Quality Management especially in their Marketing Department. This is because that marketing department is the one who were concerned or deal with defining the needs of the effectiveness and customers the most.

Therefore every aspect of marketing function needs to be completed with quality. Quality control at the production stages is as much the common concern of all divisions as it is the individual responsibility of the technology, production technology, purchasing, manufacturing, inspection, ditribution, customer service and the other divisions. The discussion here is focused on process analysis, process control, quality assurance, process improvement and quality control in purchasing, all of which are essential to mantaining and improving quality.

Jakel Silk House apply TQM to create constancy of purpose toward improvement of the product and service so as to become competitive, stay in business and provide jobs. Jakel also adopt the new philosophy. Because Jakel Silk House are in a new economic age. It’s no longer need live with commonly accepted levels of delay, mistake, defective material and defective workmanship. In cease dependence on mass inspection; require, instead, statistical evidence that quality is built in. Jakel need improve the quality of incoming barriers. End the practice of awarding business on the basis of a price alone.

Instead, depend on meaningful measures of quality, along with price. On the other hand to find the problems: constantly improve the system of production and service. There should be continual reduction of waste and continual improvement of quality in every activity so as to yield a continual rise in productivity and a decrease in costs. Institute modern methods of training and education for all. Modern methods of on-the-job training use control charts to determine whether a worker has been properly trained and is able to perform the job correctly.

Jakel used the modern methods of supervision. The emphasis of production supervisors to help people to do a better job. The Improvement of quality will automatically improve productivity. The Jakel Silk House management must prepare to take immediate action on response from supervisors concerning problems such as inherited defects, lack of maintenance of sales, poor tools or fuzzy operational definitions. Fear is a barrier to improvement so drive out fear by encouraging effective two-way communication and other mechanisms that will enable everybody to be part of change, and to belong to it.

Fear can often be found at all levels in an organization: fear of change, fear of the fact that it may be necessary to learn a better way of working and fear that their positions might be usurped frequently affect middle and higher management, whilst on the shop-floor, workers can also fear the effects of change on their jobs. There was a break down barriers between departments and staff areas. People in different areas such as research, design, sales, administration and production must work in teams to tackle problems that may be encountered with products or service.

They should eliminate the use of slogans, posters and exhortations for the workforce, demanding zero defects and new levels of productivity without providing methods. Such exhortations only create adversarial relationships. Eliminate work standards that prescribe numerical quotas for the workforce and numerical goals for people in management, substitute aids and helpful leadership also can be applied. Remove the barriers that rob hourly workers, and people in management, of their right to pride of workmanship. This implies, abolition of the annual merit rating (appraisal of performance) and of management by objectives.

Institute a vigorous program of education, and encourage self-improvement for everyone. What an organization needs is not just good people; it needs people that are improving with education. Top management’s in Jakel Silk House compay must permanent commitment to ever-improving quality and productivity must be clearly defined and a management structure created that will continuously take action to follow the points. Part D 4. 0 Issues/problems faced by the organization in implementing the topic/method (TQM) 4. 1 Commitment Commitment shown at the canopy of the tree shows the importance of this management team in the quality process.

Only a strong commitment towards the implementation of the standard can guarantee its successful completion and continuous improvement. Sometimes it is assumed that to appoint a quality consultant or to fill the quality representative position is the sole responsibility of the supreme authority. This assumption is totally wrong, only a strong and committed boss will drive its company on the way to TQM. The management representative is the head of an organization pursuing quality, and infects every member of that organization who is the least concerned with quality procedures.

The management representative is himself responsible for the smooth running of the system. Management is like a brain and all members act as the parts of body, if even a single part does not work properly it will affect the procedure of the whole system. The personnel at the conversion stage are the real factors of success of the system. So the commitment to quality should be enrooted deeply in the quality system organization. Motivation in this regard will help a lot to achieve the ultimate target (quality motivation).

Jakel Silk House company should have the high commitment to apply TQM on the business not only from the top management but also the workers. 4. 2 Strategies The next issues in pursuing the quality objective is to develop strategies. The most common procedure is to develop quality policies and quality plans. Well that’s exactly the right way to do the things, but remember only creating the quality policy and making quality plans is not enough. It will be effective only when this quality policy is communicated at every level of the organization.

The quality policy should be stated in the most simple way so that every individual can understand it. In case of organizations having employees from different linguistic levels, its suggested to translate the quality policy into their languages, this will help to communicate the concept deep in the organization. Quality plans are also of core value in a quality system, but it has been observed that for some individuals the term is confusing. Most often it is thought that separate planning should be done in order to carry out the process. The fact is that this assumption is wrong.

Planning can be categorized in many ways; there may be long-term planning, medium term planning, and short-term planning. Every level of planning should be considered separately in the quality system. The short term planning should always be in the view of long term planning, short-term plans may be daily plans or weekly plans or even monthly plans, but they do affect the long-term strategies of the organization. Jakel Silk House company must plan its strategies for the short term and long term to avoid the problem when implementing the TQM on the business. 4. 3 Teamwork The most significant part of the quality system is the teamwork.

The single individual cannot achieve the goal in its real sense. Quality teams and quality circles are two basic techniques used most often in quality management. Quality circle is synonymous to management by objectives (MBO) in management’s terminology. For example quality circles were first of all evolved in Japan as a productivity improvement technique, but now this term is used in a much more elaborate scope. People are grouped from the same organizational area and a leader is appointed in order to monitor the objectives, these teams are self motivated and thoroughly trained to achieve the specific objective.

In this way participation of every member is assured by assigning specific tasks. For example, one thing that might be important in teamwork is the rotation of the job, in order to ensure the smooth running of the process even in the absence of any member in the company. This is also the dilemma of many organizations that responsibilities are not rotated among coworkers, which might be the major cause of slow progress of organizations. So, all member in Jakel Silk House must trust each other so that they can create good teamwork and doing well in their business. . 4 Customer-driven quality TQM has a customer-first orientation. The customer, not internal activities and constraints, comes first. Customer satisfaction is seen as the company’s highest priority. The Jakel Silk House company believes it will only be successful if customers are satisfied. The TQM company is sensitive to customer requirements and responds rapidly to them. In the TQM context, `being sensitive to customer requirements’ goes beyond defect and error reduction, and merely meeting specifications or reducing customer complaints.

The concept of requirements is expanded to take in not only product and service attributes that meet basic requirements, but also those that enhance and differentiate them for competitive advantage. Each part of the Jakel Silk House company is involved in Total Quality, operating as a customer to some functions and as a supplier to others. The Marketing Department is a supplier to downstream functions such as Manufacturing and Field Service, and has to treat these internal customers with the same sensitivity and responsiveness as it would external customers. . 5 TQM leadership from top management TQM is a way of life for Jakel Silk House company. It has to be introduced and led by top management. Attempts to implement TQM often fail because top management doesn’t lead and get committed instead it delegates and pays lip service. Commitment and personal involvement is required from top management in creating and deploying clear quality values and goals consistent with the objectives of the company, and in creating and deploying well defined systems, methods and performance measures for achieving those goals.

These systems and methods guide all quality activities and encourage participation by all employees. The development and use of performance indicators is linked, directly or indirectly, to customer requirements and satisfaction, and to management and employee remuneration. 4. 6 Continuous improvement Continuous improvement of all operations and activities is at the heart of TQM. Once it is recognized that customer satisfaction can only be obtained by providing a high-quality product, continuous improvement of the quality of the product is seen as the only way to maintain a high level of customer satisfaction.

As well as recognizing the link between product quality and customer satisfaction, TQM also recognizes that product quality is the result of process quality. As a result, there is a focus on continuous improvement of the Jakel Silk House company’s processes. This will lead to an improvement in process quality. In turn this will lead to an improvement in product quality, and to an increase in customer satisfaction. Improvement cycles are encouraged for all the company’s activities such as product development, use of EDM/PDM, and the way customer relationships are managed.

This implies that all Jakel Silk House activities include measurement and monitoring of cycle time and reponsiveness as a basis for. Seeking responsiveness as a basis for seeking opportunities for improvement. Elimination of waste is a major component of the continuous improvement approach in this company. There is also a strong emphasis on prevention rather than detection, and an emphasis on quality at the design stage. The customer driven approach helps to prevent errors and achieve defect-free production.

When problems do occur within the product development process, they are generally discovered and resolved before they can get to the next internal customer. 4. 7 Fast response To achieve customer satisfaction, the Jakel Silk House company has to respond rapidly to customer needs. This implies short product and service introduction cycles. These can be achieved with customer-driven and process-oriented product development because the resulting simplicity and efficiency greatly reduce the time involved.

Simplicity is gained through concurrent product and process development. Efficiencies are realized from the elimination of non value adding effort such as redesign. The result is a dramatic improvement in the elapsed time from product concept to first shipment. 4. 8 Actions based on facts The statistical analysis of marketing and manufacturing facts is an important part of TQM. Facts and analysis provide the basis for planning, review and performance tracking, improvement of operations, and comparison of performance with competitors.

The TQM approach is based on the use of objective data, and provides a rational rather than an emotional basis for decision making. The statistical approach to process management in both marketing and manufacturing recognizes that most problems are system-related, and are not caused by particular employees. In practice, data is collected by Jakel company and put in the hands of the people who are in the best position to analyze it and then take the appropriate action to reduce costs and prevent non-conformance.

Usually these people are not managers but workers in the process. If the right information is not available, then the analysis, whether it be of shop floor data, or marketing test results, can’t take place, errors can’t be identified, and so errors can’t be corrected. 4. 9 Employee participation A successful TQM environment requires a committed and well trained work force that participates fully in quality improvement activities. Such participation is reinforced by reward and recognition systems which emphasize the achievement of quality objectives.

On going education and training of all employees supports the drive for quality. Employees in Jakel Silk House Company are encouraged to take more responsibility, communicate more effectively, act creatively, and innovate. As people behave the way they are measured and remunerated, TQM links remuneration to customer satisfaction metrics. 4. 10 A TQM culture It’s not easy to introduce TQM. An open, cooperative culture has to be created by Jakel Silk House management. Employees have to be made to feel that they are responsible for customer satisfaction.

They are not going to feel this if they are excluded from the development of visions, strategies, and plans. It’s important they participate in these activities. They are unlikely to behave in a responsible way if they see management behaving irresponsibly saying one thing and doing the opposite. 4. 11 Product development in a TQM environment Product development in a TQM environment is very different to product development in a non TQM environment. Without a TQM approach, product development is usually carried on in a conflictual atmosphere where each department acts independently.

Short term results drive behavior so scrap, changes, work-arounds, waste, and rework are normal practice. Management in Jakel Silk House should focuses on supervising individuals, and fire fighting is necessary and rewarded. Product development in a TQM environment is customer driven and focused on quality. Teams are process oriented, and interact with their internal customers to deliver the required results. Jakel Silk House management’s also must focus on controlling the overall process, and rewarding teamwork. Part E 5. 0 Conclusion

Focusing on quality, combined with increasing costs of materials, equipment, labor and advertising are driving the implementation of TQM as a competitive strategy in all types of organizations. These forces for change also provide an opportunity for an expanded role of marketing department management in making TQM succeed. Quality can no longer be viewed as the responsibility for one department. It is a companywide activity that permeates all departments, at all levels. The key element of any quality and productivity improvement program is the employee.

Consequently, employee commitment to a TQM program is essential. Because of its fundamental employee orientation, Jakel Silk House should seek the responsibility for implementing TQM programs rather than risk losing their influence over the key element of TQM that the employee. Organizations with a solid reputation for providing high customer satisfaction have a common viewpoint: consistently taking care of the smaller duties is just as important as the larger concerns. Just as they attempt to instill an overall quality philosophy across the company, Jakel can emphasize consistent quality in its own operations.

The day-to-day delivery can be just as important as developing strategic programs that may have higher visibility and supposedly greater long term consequences. As a manufacturing company Jakel Silk House is best able to take charge of these important functions as they relate to a TQM strategy. The full potential of the entire work force must be realized by encouraging commitment, participation, teamwork, and learning. Jakel Silk House is best suited to accomplishing this by modeling these qualities.

Leading by example, the marketing department in Jakel Silk House Company could then sustain the long term TQM process company wide. A byproduct of setting a TQM example can be the improved standing of the marketing department in the eyes of other, traditionally more influential departments. But, the primary end result can be total quality management as a successful competitive strategy for organizational survival. 6. 0 Reference 1. David L. Goetsch, Stanly Davis: Quality Management: Introduction to Total Quality Management for production, Processing, and Services, Prentice Hall Inc, New Jersey, 2000. . Robert W. Ingram,Thomas L. Albright, John W. Hill: Managerial Accounting, Information for Decision 3rd edition, South Western, Canada, 2003. 3. Gopal K. Kanji: Total quality management, Proceedngs of the first World Congress, First edition 1995, Printed in Great Britain by Hartnolls Ltd,Bodmin,Cornwall. 4. Garrison, Noreen, Brewer, Managerial accounting, Twelfth Edition, Printed in Singapore. 5. http://www. johnstark. com/fwtqm. html. 6. Interview with Jakel Silk House Company. 7. 0 Appendices 2 Jakel Silk House (Alamesra branch)

To a larger extent, advertisements use fallacies such as gift pitches, shills and testimonials. However, to a smaller extent, advertisements use other forms of psychological mechanisms that do not involve fallacies, such as persuasion psychology.

Gift pitches are used to attract customers with the prospect of receiving an additional free gift, making them feel that they are gaining from the purchase. For example, a Baygon advertisement claims that customers can win a hundred times of what they spend on Baygon, making readers feel that they gain rather than spend by buying this brand. It also encourages customers to start “winning” instead of “buying”, adding to the psychological effect that they are gaining from this promotion. However, the seller or manufacturer may not be in actual fact giving a free gift. He may have simply increased the selling price so that his profits can cover the cost of the “gift”. However, gift pitches are very attractive as they mislead customers into thinking that they are getting something for nothing.

Shills are used to assure a customer that the product is worth buying, since another customer has given feedback that he approves of it. For example, a tuition advertisement by BrainFit Studio states that a customer is satisfied with its services, and its effects include reducing the time to learn a subject from three days to two hours. The statement is written by a parent to satisfy other parents who want to send their children for the course. However, the “customer” may be a false customer, who has been paid to pose for the advertisement. Alternatively, the statement may be conjured up by the advertiser.

Testimonials are used to convince potential buyers by making fallacious appeals to authorities. Authorities can include celebrities who endorse the product, or scientific authority. For example, an advertisement by BEST selling laptops claim that a notebook or a tablet uses less than half the amount of electricity used by a desktop computer. This will lead potential buyers to believe that their product is more efficient that a computer, and thus buy it. However, the statement may not be scientifically accurate. Still, customers may accept it without any suspicions and buy the product.

However, not all advertisements use fallacies. They may use other forms of psychological mechanisms. Telemarketers contact customers to demonstrate a product’s effectiveness, hence persuading a customer to buy the product. However, the customer is able to judge for himself the effectiveness of a product and is not misled in any way.

Hence, to a larger extent, advertisements use fallacies to advertise products. However, not all advertisements mislead customers to sell their products. In such cases, customers can judge for themselves the effectiveness of the product, making a well-informed decision.

Customer satisfaction is a central objective of most service organizations. Support personnel strive to meet all wants presented by customers. Their goal is to quickly and effectively address any arising problem. Customers interact with technical support teams on a daily basis. The public builds their opinion of the company based on interactions with the support staff. Support staff is instrumental in tackling issues presented by the consumer. The composition of technology teams ought to be performed with a lot of soberness so as to ensure optimum efficiency.

Developing an appropriate team environment is crucial to effective team building. Clear goals, mission and objectives have to be established in order to establish clear responsibilities and roles. Proper handling and tackling of conflicts is essential to muster negotiation techniques and effectively handle conflict situations (Dorf, 1998, p. 24). Understanding the psychological and emotional composition of team members enables a team leader to comprehend the driving force behind each and every personality and hence devise appropriate incentives.

Response is one of the principles critical to strategic systems solutions. Upon a client’s request for support, communication becomes very important. Personnel immediately embrace every support request made. The analyst’s response informs the customer of: the fact that their request is being dealt with, the individual addressing it and the projected completion period. In case the analyst cannot furnish the customer with a quick completion time estimate, such an analyst is required to continuously update the customer of their request and provide an estimate as soon as it is available.

Customers evaluate a system based on the accuracy and speed of support staff’s responses. Polite and prompt response assures the client of the imminent fast tackling of their issues (Lowe, 2003, p. 35) A support analyst requires comprehension of the system and its immediate environment as well as ability to access resources and implements for investigating issues and solving dilemmas. These tools facilitate the analyst to effectively discharge their duties regarding information gathering, establishing priorities for requests and recording of data into the problems tracking process.

When an analyst encounters requests that are beyond their reach as regards abilities or mandates, they refer to pre-recorded escalation procedures to facilitate handling of such cases. An escalated request calls for the engagement of the original analyst in preparation for such scenarios so as to improve the individual’s knowledge. Consultation with a manager or colleague of higher experience is essential in such circumstances.

A firm resolve enables analysts to provide the client with a timely and effective solution that is at per with past estimates after successful determination and recording of the issue (Cleland, 2007, 17). Reporting is essential to the provision of support services. Initially, the problem is recorded. Emphasis is placed on the solution that accompanies the problem since such a problem is critical in handling future requests and in the provision of essential data for reports. Important reporting is developed and agreed on in conjunction with the Service Level Agreement.

This process aids in reporting on trends, patterns, common issues, proposals and causes. Such a process also estimates and reports on attained real support service levels to measure them against customers’ wishes. In instances where many support issues are existent, a section of analysts assumes the role of Client Liaison while the others become Problem Handlers. Client Liaison involves issuing of updates to users and handling of their projections on the progress and expected finish times.

Problem solving analysts analyze issue and develop solutions. Such kind of support can be offered in 80% time by merely three personnel. A single individual utilizes most of the time conversing on situations with clients at the expense of the real support function (Dorf, 1998, p. 61). Proactive support involves application monitoring, minor repairs on application software, transition arrangements for incoming or modified software, preventive repairs, reports on the status and any other client or team head- identified activities.

Clients and support staff benefits are usually substantial owing to the fact that this kind of activity is usually neglected as a result of frequent fire-fighting. The worldwide multi-time zone support is difficult and this complicates future effecting of accurate coverage and planning. Effective team building involves first determining the services to offer and the support that customers ought to expect. Emphasis then shifts to composition and support staffing of support teams. A solid team includes individuals who are self-motivated, flexible and highly motivated.

Team members ought to positively contribute to the team as well as enjoy in-job learning. Team-building capacity and effective communication among team members and with managers is essential. Team members ought to posses excellent written and verbal communication skills. Comprehension of certain procedures and technologies employed by the client are advantageous for the staff. Personnel ought to seek to better their services through analysis of problems and service betterment programs as they perform their daily support functions.

This proves beneficial to clients in that it integrates automation, system improvements and appropriate application monitoring software. Multiple pathways, exception processing and escalation concerns are existent at almost every point of the processing of an issue through a support request. A professional support system ought to be transparent to the client as well as the internal user base. Such a system is integrated into the clients firm with which it functions with in meeting the business needs.

An effective system provides the following services in line with this integration goal: it furnishes support analyst with customer telephone contacts and email addresses, facilitating the use of client equipments by the analysts and gaining access to appropriate customer systems (Cleland, 2007, p. 73). The process of reaching a consensus with clients on service delivery involves the support organization establishing the clients’ expectations and what the firm is required to do in order to satisfy the wishes.

The following aspects need to be thoroughly addressed in the proceeds of defining the requirements of service scopes, agreements and goals: extent of work, coverage levels and response, day-to day functioning of the team (work-flows, escalation, prioritization, administration), transition management, team management, target and objective evaluation, security and environment organization, client contact information, billing and personal details and team composition (Lowe, 2—3, p. 45).

Two personnel are ideal per shift so as to comfortably manage through lunch and comfort breaks, safety and health regulations and transport relapses. This translates to two to three individuals per shift based on how the client seriously considers risks. This numbers fall to mostly one individual owing to sickness, holidays and training impediments. Ideally, two analysts will be at work for half of the time, a single individual will work for a quarter of the time, the system is likely to be unmanned for 3 percent of the time and all staff will be working for only a third of the time.

References Cleland, D. I. (2007). Project manager’s handbook: applying best practices across global industries. New York, USA: McGraw-Hill Professional. Dorf, R (1998). The Technology Management Handbook. New York: CRC Press Lowe, P (2003). Management of Technology: Growth Through Business Innovation and Enterpreniuership. London: Emarald Group Publishing