Skip to main content
SpringerLink
Log in

Dynamics of Quality Perception

  • Chapter
  • First Online:
Quality Uncertainty and Perception

Part of the book series: Contributions to Management Science ((MANAGEMENT SC.))

  • 1091 Accesses

Abstract

This chapter provides framework, modeling, and analysis for quality perception by using system dynamics (SD). The role of the changing level of market-side enablers on quality perception is observed. To realize the impact of information asymmetry on quality perception, simulation runs are carried out for an Indian case. Enablers, such as advertising, word-of-mouth, rebate, warranty and guarantee, mitigate the effect of information asymmetry on quality perception and commensurately translate TQM to market value. Similarly, the position of high quality products (HQPs) is focused in SD modeling and analysis. Also, an attempt is made to unfold the prevailing parametric relationships in the market of developed and developing nations. Simulation runs are carried out to assess the impact of company reputation and advertising on market parameters. From using correlation analysis and analytic hierarchy approach, the policy measures to improve the HQP position in the market are revealed. The SD model has a practical relevance to implement quality perception enhancement by deciding on the policy mix.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 84.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 109.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 109.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  • Badri AM, Davis D (1995) A study of measuring the critical factors of quality management. Int J Qual Reliab Manage 12(2):36–53

    Article  Google Scholar 

  • Bass F (1969) A new product growth model for consumer durables. Manage Sci 15(5):215–227

    Article  Google Scholar 

  • Bass F, Krishnan T, Jain D (1994) Why the bass model fits without decision variables. Mark Sci 13(3):203–223

    Article  Google Scholar 

  • Davis JP, Bingham CB, Eisenhardt KM (2007) Developing theory through simulation methods. Acad Manage Rev 32(2):580–599

    Article  Google Scholar 

  • Dybvig PH, Spatt CS (1983) Does it pay to maintain a reputation? Consumer information and product quality. Yale University, Mimeo

    Google Scholar 

  • Fombrun CJ (1996) Reputation: realizing value from the corporate image. Harvard Business School Press, Boston, MA

    Google Scholar 

  • Forrester JW (1961) Industrial dynamics. MIT Press, Cambridge, MA

    Google Scholar 

  • Forrester JW (1968) Principles of systems. Pegasus Communications, Waltham, MA

    Google Scholar 

  • Forrester JW (1969) Urban dynamics. Pegasus Communications, Waltham, MA

    Google Scholar 

  • Forrester JW (1971) World dynamics. Pegasus Communications, Waltham, MA

    Google Scholar 

  • Fudenberg D, Kreps DM (1987) Reputation in the simultaneous play of multiple opponents. Rev Econ Stud 54(4):541–568

    Article  Google Scholar 

  • Fudenberg D, Levine D (1992) Maintaining a reputation when strategies are imperfectly observed. Rev Econ Stud 59(3):561–579

    Article  Google Scholar 

  • Gonzalez ME, Quesada G, Mueller R (2004) QFD strategy house: an innovative tool for linking marketing and manufacturing strategies. Mark Intell Plan 22(3):335–348

    Article  Google Scholar 

  • Horner J (1999) Reputation and competition. CARESS Working paper, 99–02

    Google Scholar 

  • Iyer G, Soberman D, Villas-Boas JM (2005) The targeting of advertising. Mark Sci 24(3):461–476

    Article  Google Scholar 

  • Jagadeesh R (1999) Total quality management in India – perspective and analysis. TQM Mag 11(5):321–327

    Article  Google Scholar 

  • Jermain E (1963) Problems in industrial dynamic. MIT Press, Cambridge, MA

    Google Scholar 

  • Joseph IN, Rajendran C, Kamalanabhan TJ (1999) An instrument for measuring total quality management implementation in manufacturing – based business units in India. Int J Prod Res 37(10):2201–2215

    Article  Google Scholar 

  • Khanna VK, Vrat P, Shankar R, Sahay BS (2004) Managing transition phases in the TQM journey: a system dynamics approach. Int J Qual Reliab Manage 21(5):518–544

    Article  Google Scholar 

  • Mitra D, Golder PN (2006) How does objective quality affect perceived quality? Short-term effects, long-term effects, and asymmetries. Mark Sci 25(3):230–247

    Article  Google Scholar 

  • Moorman C (1998) Market-level effects of information: competitive responses and consumer dynamics. J Mark Res 35(2):82–98

    Article  Google Scholar 

  • Moorman C (2005) The effect of standardized information on firm survival and marketing strategies. Mark Sci 24(2):263–274

    Article  Google Scholar 

  • Motwani J (2001) Critical factors and performance measures of TQM. TQM Mag 13(4):292–300

    Article  Google Scholar 

  • Park C-H, Kim Y-G (2003) A framework of dynamic CRM: linking marketing with information strategy. Bus Proc Manage J 9:652–671

    Article  Google Scholar 

  • Shapiro C (1982) Consumer information, product quality, and seller reputation. Bell J Econ 13(1):20–35

    Article  Google Scholar 

  • Shapiro C (1983) Premiums for high quality products as returns to reputation. Q J Econ 98(4):659–679

    Article  Google Scholar 

  • Sice P, Mosekilde E, Moscardini A, Lawler K, French I (2000) Using system dynamics to analyze interactions in duopoly competition. Syst Dyn Rev 16(2):113–133

    Article  Google Scholar 

  • Sterman JD (2000) Business dynamics: systems thinking and modeling for a complex world. Irwin/McGraw-Hill, New York, NY

    Google Scholar 

  • Tellis GJ, Fornell C (1988) The relationship between advertising and product quality over the product life cycle: a contingency theory. J Mark Res 25(1):64–71

    Article  Google Scholar 

  • Tellis GJ (1988) Advertising exposure, loyalty, and brand purchase: a two-stage model of choice. J Mark Res 25(2):134–144

    Article  Google Scholar 

  • Tellis GJ (1989) The impact of corporate size and strategy on competitive pricing. Strateg Manage J 10(6):569–585

    Article  Google Scholar 

  • Tellis GJ, Prabhu J (2000) Do consumers ever learn? Analysis of segment behavior in experimental markets. J Behav Decis Mak 3(1):19–34

    Google Scholar 

  • Tellis GJ, Chandy RK, MacInnis D, Thaivanich P (2005) Modeling the microeffects of television advertising, which ad works, when, where, for how long, and why? Mark Sci 24(3):351–366

    Article  Google Scholar 

  • Vojtko V, Mildeova S, Trojasek J, Nemecova I (2006) Market dynamics for decision support in marketing. 24th international conference of the system dynamics society, System Dynamics Society, Nijmejen, Netherlands

    Google Scholar 

  • Weick KE (1989) Theory construction as disciplined imagination. Acad Manage Rev 14(4):516–531

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. SGGS Institute of Engineering & Technology Dept. Production Engineering, 431606, Vishnupuri, Nanded, Maharashtra, India

    Lalit Wankhade & Prof. Dr. Balaji Dabade

Authors
  1. Lalit Wankhade
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Prof. Dr. Balaji Dabade
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Lalit Wankhade .

Appendix C

Appendix C

6.1.1 Worksheets 5 and 6

6.1.1.1 Using Worksheet 5

Worksheet 5 refers to the first part of the system dynamics modeling and analysis of quality perception. It helps develop causal loop and boundary chart for the modeling. Entries in worksheet 5 are as follows:

  1. 1.

    Imagine the basic sectors – company, market, information to customers, etc. Ponder over the TQM efforts the company has been investing in. Also, imagine the marketing strategies the company has been developing and the current scenario of all these. Now draw a possible causal loop diagram for quality perception.

  2. 2.

    The four sectors are identified in the column 1. These sectors are considered separately for simplicity and clarity. The socio-economic sector can be neglected if not required.

  3. 3.

    Make a list of the endogenous factors for all the sectors in the second column. These are the variables for system dynamics modeling that are internal parts of the system. The four sectors are the four subsystems for this system dynamics modeling.

  4. 4.

    Make a list of the exogenous factors for all the sectors in the third column. These are the variables that are external parts of the system. These influence the system from outside.

  5. 5.

    Make a list of the excluded factors for all the sectors in the third column. These are the variables that are least important from modeling viewpoint at the first iteration.

6.1.1.2 Using Worksheet 6

Worksheet 6 refers to the system dynamics modeling of quality perception. The modeling work has been broken down in the four submodels. These submodels should be appropriately connected to one another by using the shadow variables. Entries in worksheet 6 are as follows:

  1. 1.

    Draw a model for the industry or company sector in the first row. The efforts for improvement of product quality are modeled here. TQM implementation is a representation of the product quality. Hence, the critical factors should be modeled. The other important aspects should also be considered.

  2. 2.

    The second row should present the market position of the company. Reputation, market share, and other performance measures determine the modeling efforts in this row.

  3. 3.

    The modeling in the third row is a kernel of the modeling of quality perception. All the attempts by the company to increase information symmetry of product quality have to be incorporated in this model. Or this is a model where one can run the simulations and determine the amount of required marketing enablers for the desired quality perception.

  4. 4.

    The modeling in the fourth row largely depends on whether the company is placed in developed or developing nations and on the background of the company’s customers.

While developing the models lots of inputs are required for the second and the third models. Thus, a company team should do the research and develop these models, whereas the inputs are readily available with the company for the first model. Continuous research and iterations are essential for this modeling. The model developed on the quarter page should grow to a page size model after iterations.

6.1.2 Worksheet 5

Causal loop diagram

Boundary chart

Sector

Endogenous

Exogenous

Excluded

Company/industry

   

Market

   

Information

   

Socio-economic

   

6.1.3 Worksheet 6

Sector

Model

Company

This sector should incorporate TQM and other improvement activities at the company level

 

Market

This sector should position the company juxtaposed to the competitors. Reputation or market share is important

 

Information

Marketing strategies or enablers like advertising, warranty, word of mouth, etc. should become the kernel of this sector

 

Socio-economic

The impact of socio-economic and cultural factors on quality perception should be presented here

 

Rights and permissions

Reprints and permissions

Copyright information

© 2010 Springer-Verlag Berlin Heidelberg

About this chapter

Cite this chapter

Wankhade, L., Dabade, B. (2010). Dynamics of Quality Perception. In: Quality Uncertainty and Perception. Contributions to Management Science. Physica, Heidelberg. https://doi.org/10.1007/978-3-7908-2195-6_6

Download citation

Publish with us

Policies and ethics

Search

Navigation