Quality Management Unit 4

Unit 4 Customer Focus

Structure:
4.1 Introduction
Objectives
4.2 Meaning of Customer and Customer Focus
Classification of customers
Customer Focus
4.3 Customer Perception of Quality
Factors affecting customer perception
4.4 Customer Requirements
4.5 Meeting Customer Needs and Expectations
4.6 Customer Satisfaction and Customer Delight
4.7 Handling Customer Complaints
4.8 Customer Relationship Management
4.9 Summary
4.10 Glossary
4.11 Terminal Questions
4.12 Answers

4.1 Introduction
In the previous unit, you learnt about strategic quality management. The
major objectives of strategic quality management are to beat competition
and to attract more customers. For this, the organisation should focus on the
customer. In this unit, you will learn more about importance of such
customer focus.
The customer is undoubtedly an important asset of any organisation. An
organisation’s success depends on how many customers it has, how much
they buy the company’s products, and how often they buy. Hence, there is
the popular saying - customer is king.
But this saying sounds misleading – it can be an attempt to cheat through
flattery. But some organisations are really concerned. The following
example demonstrates this:

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A famous management expert and author illustrates the concern of a

company towards its customers through an example:
“A person was travelling by Canadian Airlines to Canada. The airlines
unfortunately could not provide a vegetarian meal to him as he desired.
The airhostess tried hard to provide him some kind of a meal, but failed.
She was literally in tears because of her inability to provide a meal to her
customer, and she offered sincere apologies. The customer took the
incident sportingly and accepted the apologies with a smile. The matter
was over as far as he was concerned. To his amazement, he received an
apology email from none other than the president of the airlines, along
with free tickets to India and back! The customer is certainly the king as
far as Canadian Airlines is concerned.
If you look around carefully, you will find that many organisations are
actually serving their clients like their kings. This is in utter contrast to the
scenario two to three decades ago when customers were looked upon as
lawful preys. This is evident from older people through the harrowing
experiences they might have gone through after making wrong purchases.
Philip Kotler, while discussing the evolution of marketing, narrated that:
 Initially, all managerial functions such as finance, operations, marketing,
and personnel management were considered equally important.
 Later, marketing and sales emerged as more important functions than
the others.
 Still later, managers looked up on marketing and sales as central to all
other managerial functions.
 Thereafter, the realisation dawned that it is not marketing, but the
customer who is central to organisation’s effort.
 Today, the customer remains central to marketing efforts. Other
managerial functions merely facilitate marketing efforts to serve the
customer.
This importance of customers was best captured by Mahatma Gandhi when
he said:
“Customer is the most important person to our premises
He is not dependent on us, we are dependent on him
He is not an interruption in our work; He is the purpose of it

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We are not doing a favour by serving him. He is doing us a favour by giving

us an opportunity to do so”
Most successful organisations have adapted to this reality. They realise that
customers are not mere statistics, but are made of flesh and blood and have
feelings and emotions. And from here emerges the concept that the
company and the customer are not two separate entities. Rather, they are a
part of a complete system. Customer is a part of business, not apart from it.
Such customer focus will help an organisation in ensuring sustained
superior performance, which in turn will help in overall growth. In this unit,
you will learn about the meaning of customer focus, perception of customer
focus, handling customer complaints, and the concept of customer
relationship management.
Objectives:
After studying this unit you should be able to:
 list the types of customers
 explain the customers’ perception of quality
 describe the importance of meeting customer needs
 differentiate between customer satisfaction and customer delight
 explain the concept of customer relationship management

4.2 Meaning of Customer and Customer Focus

Who is the customer? Your answer perhaps is anyone who buys goods or
services of an organisation. Well, that is an incomplete answer. This
definition implies that the customer and the organisation are two different
entities. Customers are not just the ones who are buying an organisation’s
product – they are much more than that.
Traditionally, the word customer is used to define those people external to
the organisation who purchase the organisation’s product. Today, however,
the word customer is used more broadly and includes even the people
working in the organisation.
A customer is any individual or group of individuals who receives the
company’s products or services either directly or through a series of
intermediaries. The customer can be the final consumer or the one who
buys for others’ use.

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For example, for a biscuit manufacturing company, the customer list would
be as follows:
 A child who eats the biscuits
 The grandmother who feeds the child
 The mother who buys the biscuits
 The father who pays for the biscuits
 The wholesaler who stocks the biscuits
Let us now look at the classification of customers.
4.2.1 Classification of customers
There are many ways to classify customers. We will look at two main ways
to classify customers:
a) In the first way of classification, there are two kinds of customers:
external and internal:
The external customer is the one has direct effect on the purchase of the
product or service. The external customer is not part of the organisation,
but gets directly influenced by the purchase of product or service.
External customers include buyers, individual users, other organisations,
end-users, government agencies, and the public at large.
The internal customer is a part of the organisation and is in fact users of
‘in-process output’. The users of the output of one department (or
process) are called the customers of the department (or process) from
which the output is obtained. Thus, each stage of activity within the
organisation adds value to the input received and passes it on to the
next stage. The employees of this “next stage” are their internal
customers.
b) In the second way of classification, the term customer includes:
 Existing customers: Customers who are currently engaged in
transaction with an organisation.
 Former customers: Customers who have stopped buying from an
organisation perhaps because the organisation failed to satisfy these
customers.
 Potential customers: Customers who may or may not be aware
and interested in an organisation’s product or service. The
organisation may have failed to reach out to these customers.

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 Non-customers: Customers who do not need an organisation’s

product – at least in its existing form and features.
 Future customers: Customers who may purchase the
organisation’s future products.
Should an organisation serve all its customers? Ideally, this would be
preferred. But organisations are aware that it is practically not possible.
Hence, they should select their customers carefully – with full knowledge
that these customers genuinely need the organisations’ products.
Organisations should serve only those whom they can serve profitably. Most
organisations realise that 20 percent of their customers actually buy
products worth 80 percent of the total value. These ‘A’ category customers
must be given all the respect, concern, attention, and cooperation. The ‘B’
category customers may not buy large value of products, yet they should be
served with proper respect and concern.
Today, the entire effort of most organisations is focussed on:
 Attracting more customers
 Making them happy
 Retaining them
4.2.2 Customer Focus
Before understanding customer focus, we need to know what focus means
to organisations. Focus means concentration of energy. When someone
focuses completely on a particular goal, that person will soon achieve that
goal. Similarly, for organisations too, focus provides the capability to bring
together their divergent energies by concentrating them towards the single-
minded achievement of desired goals. Thus, focus gives an organisation the
powers not only to perform well, but also to excel. For organisations, such
focus should only be on the customer. Only when there is complete
customer focus, will there be sustained, overall organisational success.
The key to building customer focus is through the ability to anticipate the
needs of:
 Potential customers
 Existing loyal customers
 Dissatisfied customers
 Competitors’ customers

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The producers or manufacturers are required to look at the processes

through the customers’ eyes, and not through that of the organisation’s. An
organisation’s focus is often reflected by the measures that it uses to
evaluate its performance. When an organisation’s focus is on things such as
production schedules, productivity, or output quantity rather than ease of
product use or availability or cost, it is difficult to create a customer-focussed
culture.

4.3 Customer Perception of Quality

Perception of quality from the customer’s point of view is defined as ‘what
they feel about the quality’. Thus, customer perception is the opinion or
feeling of a customer. Understanding this feeling requires aligning an
organisation’s understanding with customer’s perception. Customer
perception can be right or wrong, reasonable or unreasonable, logical or
illogical, just or unjust, good or bad, etc. Such perceptions determine the
perceived quality of products.
4.3.1 Factors affecting customer perception
Quality is determined by the customers, and not by producers of goods or
services. The total quality management concept recognises this basic truth,
and it suggests that marketers should clearly understand customer’s needs,
values, and expectations before making and marketing a product. The
following are factors that affect customer perception are:
Aesthetic – It refers to the physical appearance of the product – the product
design, shape, and colour. For example, Maruti Suzuki discovered in the
1980s that its customers were ready to pay an extra Rs. 10,000 for red-
coloured cars.
Feature – It includes the secondary characteristics of a product or service.
For example, a car is bought because it helps in transportation, but people
also check if the car is air-conditioned. The number of features and their
attractiveness often determine the market share of products.
Performance – It essentially refers to the fitness of use. Most detergent
advertisements are based on the promise of whitening white clothes more
than other detergents.

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Service – It is an intangible trait. For instance, the main job of a physician is

to treat a patient. When the physician does it with a smile and kindness, the
patient starts trusting the physician. It is believed that it is easier to achieve
product excellence than service excellence.
Warranty – It refers to a public commitment to ensure a level of service that
is sufficient to satisfy the customer.
Price – It is often perceived that low priced-products are inferior. Today,
customers are generally willing to pay higher prices (but within their budget)
for the right product.
Reputation – It is linked to corporate brands which have emerged as
powerful tools to assure customers. Customers readily prefer the goods
marketed by Tata group of companies because they perceive the
organisation as trustworthy.
Self Assessment Questions:
Fill in the Blanks
1. ________________ customers are the ones who have stopped buying
from an organisation.
2. Customers who know what they want, but do not realise that they know
what they want are _____________.
3. Customers who know what they want and realise that they know what
they want are _________________.
4. _____________ are secondary characteristics of a product or service.
5. ________________, a feature of TQM, essentially focuses on
customer’s requirements.

Activity 4.1:
Talk to about four to six of your friends, and find out if they are existing
customers, potential customers, former customers, non-customers, or
future customers of any product. Further, ask their reasons for being so.

4.4 Customer Requirements

Determination of customer requirements and expectations is extremely
important because they are the goals that an organisation has to meet and
exceed. By meeting and exceeding the needs and expectations of

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customers, the organisation ensures and enhances customer satisfaction

and delight.

A popular quality expert illustrates the concern of a company towards

meeting its customers’ requirements through his experience:
While visiting Delhi, I stayed in a particular hotel. I asked for two cups of
lemon tea every morning during my three-day stay. Unknown to me, this
information was saved against my name in the database of that hotel.
Imagine my surprise when I visited the same chain of hotel in Kolkata - I
was provided with two cups of lemon tea in the morning even before I
ordered it! I was delighted. One of my important requirements was
understood by the hotel!

Kano, a Japanese management expert identified three kinds of customer

requirements. They are:
a) Basic requirements
b) Performance requirements
c) Delight requirements
Basic requirements – These refer to the very basic function expected by
customers. Thus, when you buy a railway ticket to travel from Mumbai to
Kolata, your basic requirement is to reach Kolkata safely.
Performance requirements – These refer to customers’ expectations that
are agreed upon. Thus, you expect not only to reach Kolkata safely, but also
to reach on time.
Delight requirements – These refer to exceeding customer expectations.
Thus, you are delighted if the train service also includes quality meals on
time.
Requirements are based on product excellence and service excellence.
 If both the product and its service are poor, the customer will
immediately desert it.
 If the product has the required quality, but the accompanying service is
poor, then the customer will stay with the organisation only if there are
no alternatives. But the customer will actively seek a new enterprise to
overcome the dependency on one source. Potential competitors will

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identify this opportunity, and they will become active competitors and
woo such customers.
 If the quality of the product and the service is reasonable, the customer
will stay with the organisation. Some of these loyal customers may also
provide substantial support by making meaningful suggestions. Some
even promote the product to other prospective customers.
An organisation that is able to satisfy its customers by meeting their
requirements enjoys the following distinct advantages:
 The organisation can charge 8-10 percent higher prices for their goods
without fearing desertion by its customers.
 The organisation grows much faster by attracting new customers
because good messages spread (through word of mouth) to attract first-
time users.
 The organisation is in a better position to win back dissatisfied
customers.

Activity 4.2:
Visit a nearby store and identify a few dissatisfied, satisfied, and
delighted customers. Ask them for their reasons for being so in this
context.

4.5 Meeting Customer Needs and Expectations

The needs of customers is a complex issue. When we buy a powerful bike,
it does not just fulfil our transportation needs, but our psychological needs
too. Kotler has identified the following needs that an organisation must take
into account:
 Stated needs (for example, a young girl seeks to buy a face cream)
 Real needs (she wants a cream that makes her skin soft , smooth, and
glowing)
 Unstated needs (she wants to be served with due courtesy)
 Delight needs (she is given a perfume along with the cream)
 Perceived needs (the cream enhances her social standing)
 Secret needs (she needs to find a suitable match for her wedding)
Organisation must learn to differentiate between stated and unstated needs.
Marketers who see the unstated needs go on to win over their customers.
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Similarly, it is also important to understand real and perceived needs. The

perceived needs may appear improbable to organisations, but ignoring them
altogether will result in customer loss.
Customer needs and expectations can be learnt from:
 Comment cards
 Market surveys
 Focus group interviews
 Toll-free phone numbers
 Customer visits
 Report cards
 The Internet
 Sales team feedback
Self Assessment Questions:
State True or False
6. Performance requirement refers to customer expectations that are
agreed upon.
7. We must never differentiate between stated and unstated needs.

4.6 Customer Satisfaction and Customer Delight

Customer satisfaction is an outcome of three forces. They are:
 Company processes
 Company employees
 Customer expectations
Company operational processes are important because product quality and
performance are entirely determined by these processes. Thus, a very
definite product with consistent quality emerges when KFC sells chicken to
its customer. This happens because KFC has realised that quality is not
what they test in a product, but is what they build into it – through validated
operational processes.
Company employees who serve/deliver the product play a vital role in
ensuring customer satisfaction. None of us would like to be served an
excellent meal of KFC chicken by a nasty, rude, and quarrelsome employee.
KFC, therefore, ensures a very definite behavioural pattern from its
employees through scientific recruitment and precise training programmes.

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Customer expectations may be high or low. This has a strong bearing on

customer satisfaction. If expectations are low, it is rather easy to achieve
customer satisfaction through modest products and modest services. But for
a customer with high expectations, the serving organisations need to put in
the best possible.
Customer expectations are important because an organisation’s failure in
meeting them means a dissatisfied customer. The only option the
organisation has is to provide consistent satisfaction to the customer
through optimum-level performance. Let us now understand how is
customer expectation can be generated.
Following are the factors that develop product expectations in an individual:
 Word-of mouth communication
 Personal needs and wants
 Experiences
 External communication
It is important to meet customer expectations and to ensure customer
satisfaction because: (i) satisfied customers bring more business directly or
indirectly and (ii) a dissatisfied customer not only stops buying an
organisation’s product, but also dissuades others from buying the same.
This is particularly detrimental to the organisation because customers’ voice
has been identified as the most credible and convincing communication for
other customers. If a company says something and a customer says the
opposite, prospective customers will act according to the opinion of the
customer.
Some of the characteristics of dissatisfied customers are:
 An estimated 95 percent of them do not complain; they just leave your
organisation. They think that complaining serves no purpose.
 90 percent of those who leave do not ever come back.
 They talk of about their bitter experience, on an average, with ten of their
friends or associates. (Satisfied customers share their satisfaction with
merely three of their friends or associates).
 80-90 percent of the customers can be won back if their grievances are
resolved appropriately and in time.

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 It is three times more expensive to win back an old dissatisfied customer

than to win a new customer.
 It is seven times more expensive to win back an old dissatisfied
customer than to retain a satisfied one.
Customer delight, as has been already mentioned, is an outcome of a
situation when product performance exceeds customer expectations. This is
linked to the type of customer. Type ’A’ customers have expectations of
added value. When expectations are met, they achieve normal
expectations. If expectations are not met, they are dissatisfied. Type ‘B’
customers, on other hand, have no expectation of value addition. If value
addition is not made, they are satisfied, but if value addition is made, they
are delighted.

4.7 Handling Customer Complaints

Complaints are important not just because organisations have to be
customer-friendly. The advantages complaints provide include:
 They offer opportunities to correct mistakes of organisations.
 They provide organisations with innovative ideas for improving products.
 They help organisations in evolving marketing practices.
 They identify areas for upgrading services.
 They guide organisations to modify production material.
 They help organisations in ways to educate customers.
Occasional problems with quality or service are inevitable, but having
dissatisfied customers is avoidable. A timely and appropriate response can
turn angry and frustrated customers into loyal ones. To achieve this, many
business houses have established effective systems for responding to
consumer complaints. Such mechanisms have evolved from a management
philosophy that highlights customer satisfaction as the ultimate goal of
business. Companies adopting such an approach and a reputation for
responsible complaint management enjoy a competitive edge. Canadian
Airlines, which we discussed earlier in the unit, finds that it is able to retain
70-80 percent of its customers who approach the airlines with complaints.
Customers who lodge complaints are more loyal customers than ones who
do not complain. This is because such customers offer the organisation an
opportunity to correct its mistakes and win back the goodwill of the

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customers. Whereas customers who do not complain even when they find a
problem with the product or service quietly desert the company. The
organisation loses these customers perhaps forever. A proper complaint
management system protects business from unwanted costs. Negative
word-of-mouth publicity by an angry customer can be countered by investing
further in advertisements to attract substitute customers.
Carefully recorded complaints not only provide the organisation with
information about product improvement or improved quality assurance or
service, but they also provide answers to the following important questions:
 Does the organisation’s advertisement communicate properly?
 Are the salespeople of the organisation overenthusiastic?
 Is the organisation overselling or over-advertising its products?
 Does the organisation need to improve its backing, labelling, warranty
information, and service agreements?
 Are the organisation’s user manuals clear, precise, and accurate?
To receive such valuable information, the organisation should be able to
capture detailed complaints and should be able to generate information
quickly and scientifically. Complaints should trigger immediate action, as
well as long-term course of actions based on trends determined by
statistical analysis.
An effective complaint management system should be promoted by the top
management of the organisation. They can do this by establishing motives
and incentives for their employees to focus on consumer satisfaction. This
has to begin by having written policies and procedures for swift and just
complaint resolution. Clear accountability of employees in this respect
should be highlighted.
The steps to have an effective complaint system are as follows:
 Identify a location to receive complaints – Such a location should be
visible and reachable to consumers. Such complaint systems should
also be advertised to encourage customers to voice their dissatisfaction.
 Build a system for record keeping – Such a system should
communicate complaints to the top management, generate quick and
fair response, communicate to other concerned departments including
regulatory agencies, and enable the top management to examine its
efficiency and effectiveness.
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 Record and process the complaints – The complaint data should be

recorded systematically and should be categorised for scientific record
keeping. Automatically, complaint should be assigned to one individual
for proper handling. If necessary, it should be forwarded to another level
of authority.
 Acknowledge complaints – Complaints are generally accompanied by
strong feelings. It is, therefore, important to respond to complaints with
due courtesy, concern, and understanding. Proper time should be given
to customers with special needs such as language barriers.
 Scrutinise and analyse the complaint – Complaints should be
scrutinised and analysed in a fair manner by knowing both sides of the
story. Records of all meetings, conversations, and findings should be
filed properly.
 Resolve the issue – Complaints should be resolved within the
framework of the company policy. The consumer should be kept
informed continually and should be notified promptly of a proposed
settlement.
 Follow up – Customers should be asked whether or not they are
satisfied with the resolutions. If not appropriate, higher authorities should
be involved, or the complaint may even be taken to a third-party dispute
resolution mechanism.
 Prepare and submit a report on the disposition of complaint – This
should help in preparing an action plan for complaint prevention.
 Analyse and summarise complaints regularly.

4.8 Customer Relationship Management

Traditionally, marketing practices were focussed on attracting new
customers rather than retaining existing ones. Now, however, we are
beginning to build long-term relationships, often lifelong relationships, with
customers.
Customer Relationship Management (CRM) is a process of learning more
about the needs and behaviours of customers with a view to develop a
strong relationship with them. This is done because companies are now
finding that having lifetime customers is more economic and profitable than
identifying new customers. Before CRM emerged, the general feeling was
that the number of new customers is infinite, therefore, there is no point in
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caring for the already-served customers. This approach is known as the

leaky bucket approach. If the water supply never ends, a person can
manage even with a leaky bucket. However, today we realise that the
supply of new customers is not only finite, it is actually very small.
Therefore, the leaky bucket has to be replaced with a watertight bucket.
CRM is the proverbial watertight bucket that does not spill even a drop of
water. The overall approach of CRM is to cultivate and retain existing
customers, seeking to win back former customers, and only then finding and
attracting new ones.
CRM has a very definite technological component. The tools of Information
Technology (IT) have made it possible to communicate directly with all
customers, even ones located far and wide. IT has also made it possible to
keep records of all the relevant information and retrieve it when needed, at
practically no time. Using such data, a complete picture of individual
customers emerges, and therefore, it is possible to come up with micro-
strategies tailored to individual customer needs. Mass marketing, therefore,
is disappearing in favour of micro-marketing. CRM would not have been
possible without the recent advances in IT.
In theory it sounds simple, but in practice it poses many challenges. There
are many obstacles that prevent such a system from operating at its full
potential. Attempting to store large and complex groups of data, even with
the help of IT tools is difficult. The second challenge is posed by people.
Even if IT tools allow functioning of CRM, are there users who are trained
well to handle complex CRM mechanisms? It is not that the people are just
ill-trained; they simply have not developed a mindset to implement CRM.
Information collected was very often wrong, irrelevant, inconsistent, and
outdated, simply because people are not sensitive to these characteristics of
information. Soon, such information began to corrupt the entire data
resulting in failed strategies, angry customers, lost opportunities, and
financial losses.
Experts have suggested that CRM in an organisation should evolve
gradually so that people have sufficient time to learn and internalise its basic
principles. Only when there are sufficient people who are well-versed in the
principles of CRM, sensitive to the nature of information, and well-trained in
using IT tools will CRM be successful. CRM should not be confused with

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database management. CRM reflects a complete process of developing and

maintaining profitable customer relationships by delivering superior
customer value and satisfaction. It has emerged because of the following
reasons:
 Rapidly changing demographics
 Many sophisticated competitors
 Overcapacity in many industries
Research has shown that customers who are highly satisfied are also loyal.
Smart companies today do not create customers, but they try to ’own’ them
for life. Customer equity may be a better measure of a firm’s success than
existing sales or market shares. Methods for building relationships include:
 Adding financial benefits
 Adding social benefits
 Adding structural ties
Self Assessment Questions:
Multiple Choice Questions
8. Complaints are important because:
i) They provide the organisation with innovative ideas for improving
products.
ii) They help the organisation in evolving marketing practices.
iii) They identify areas for upgrading services.
iv) All the above
9. Customer expectations are developed by
i) Word-of-mouth communication, personal needs and wants, and
financial benefits
ii) Word-of-mouth communication, personal needs and wants, and
experiences
iii) Financial benefits, personal needs and wants and experiences
iv) Word-of-mouth communication, financial benefits, and experiences
10. CRM emerged because of many reasons. Which one of the following is
not one of them:
i) Rapidly changing demographics
ii) Many sophisticated competitors
iii) Changes in perceptions
iv) Overcapacity in many industries

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4.9 Summary
Let us now summarise the key learnings of this unit.
 Customers have emerged as the most important cornerstone for
business organisations. A customer is a person who buys, uses, or
decides to buy an organisation’s product.
 Customer perception plays an important role in deciding quality. Factors
affecting customer perception are aesthetics, features, performance,
service, warranty, price, and reputation.

 N. Kano, a Japanese management expert identified three kinds of

customer requirements. They are basic requirements, performance
requirements, and delight requirements. Requirements are based on
product excellence and service excellence. An organisation that is able
to satisfy its customers by meeting customer requirements enjoys many
distinct advantages.

 Kotler has identified the following needs that an organisation must take
into account. These are stated needs, real needs, unstated needs,
delight needs, perceived needs, and secret needs.

 Customer needs and expectations can be learnt from comment cards,

market surveys, focus group interviews, toll-free phone numbers,
customer visits, report cards, the Internet, and sales team feedback.
 Customer satisfaction is an outcome of company processes, company
employees, and customer expectations. It is important to meet customer
expectations because a dissatisfied customer not only stops buying an
organisation’s products, but also dissuades others from buying the
same.

 Customer Relationship Management (CRM) is a process of learning

more about the needs and behaviours of customers with a view to
develop a strong relationship with them.

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4.10 Glossary

Term Definition / Description

Lawful prey Somebody who can be legally cheated
Quality function A component of TQM that is essentially focussed on
deployment customer requirements

Grievance Complaint
Resolve Determine
Delighted Happy
Obstacle Obstruction, problem
Demographics Population features

4.11 Terminal Questions

1. Who is a customer? Discuss the different types of customers.
2. What are the factors affecting a customer’s perception?
3. Explain the various types of customer requirements. Why should firms
attempt to meet customer requirements?
4. Explain various customers’ needs. How do organisations learn about
customer needs and expectations?
5. Discuss customer expectations and customer delight.
6. Explain the concept of Customer Relations Management.

4.12 Answers
Answers to Self Assessment questions
1. Former customers
2. Sleeping customer
3. Master customer
4. Features
5. Quality Function Deployment (QFD)
6. True
7. False
8. (iv) All the above
9. (ii) Word-of-mouth communication, personal needs and wants, and
experiences
10. Changes in perceptions
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Answers to Terminal Questions

1. A customer is a person who buys, uses, or decides to buy an
organisation’s product. Refer section 4.2.
2. Factors affecting customer perception are aesthetics, features,
performance, service, warranty, price, and reputation. Refer section
4.3.1.
3. There are three kinds of customer’s requirements. They are basic
requirements, performance requirements, and delight requirements.
Refer section 4.4.
4. Customers’ needs can be stated needs, real needs, unstated needs,
delight needs, perceived needs, and secret needs. Refer section 4.2.
5. It is important to meet customer expectations because a dis-satisfied
customer not only stops buying an organisation’s product, but also
dissuades others from buying the same. Customer delight is the
outcome of a situation when product performance exceeds customer
expectations. Refer section 4.5.
6. Customer Relationship Management (CRM) is a process of learning
more about the needs and behaviours of customers with a view to
develop a strong relationship with them. Refer section 4.8.
References:
 Bedi, Kanishka, (2006) Quality Management, Published by Oxford
University Press.
 Charantimath, P. M. (2006), Total Quality Management, Pearson
Education.
 Gopalan, M. R., Bicheno, J. B. (2005) Management Guide to Quality and
Productivity, Published by Bizantara.
 Kotler, P. (2003), Marketing Management, Pearson Education.
 Srinivasan, N.S., Narayna, V. (2005) Managing Quality: Concepts and
Tasks, New age International Publisher.
 Suganthi, L, Samuel, A. A. (2004), Total Quality Management, Prentice
Hall India (P) Ltd.

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