Quality leading to Quantity

In class, when we discussed quality management, I immediately
thought of the new company that my cousin and I have recently started. We are
currently selling produce products to restaurants and small produce centers.

When we were talking about quality management in class, I noticed
that when I met with our potential buyers, it was evident that they were most
interested in the best of price and quality of the products that they were
potentially buying. We understood that we had to find a way to obtain the best
quality produce to improve our reputation, therefore my cousin and I made sure
to get the best products available to our customers. Since we are just starting
this company, we are aiming for earning a great reputation with our current and
future customers. We do our best to increase our sales and have the lowest
prices. By competing with other competitors, such as major companies, when we
go to purchase the product for our customers after an order, we make sure to
pick and choose the highest quality produce of all the products available to us,
even if they are most expensive.

By having the best quality and lowest prices, we are able to
make a lot more sales to be able to make a higher profit.  By doing so, all of this will raise reputation
of our company and gain customer loyalty.

Unlike the other companies where the customers either go to
pick their products up themselves or have the products delivered for a price, we
offer a free delivery service with our products. This will not only benefit us
with customer satisfaction in the long run, it will also make our customers happy.
We are trying to serve companies locally for now so it’s easy for us to be able
to offer free delivery.

All the other employees that we work with are very close to
us and are known to be trusted to complete their tasks. This is very important because
we know that our customer satisfaction is extremely important, so it’s imperative
to have trusted co-workers. By wanting to succeed, we can also have product liability
by making sure that other products are in great condition by the time we get to
the customers. These services that we offer will give us a great advantage over
other competitors.

As a starter company, do you believe that we should be
offering a lower price than major competitors for our high quality produce?

17 thoughts on “Quality leading to Quantity

  1. I do not believe that lower price should be an automatic replacement of good quality. As a believer of equilibrium, I believe that everything should be at an equilibrium. The price of a good should equal the quality of a good. For example, the Iphone 4 matches the price of the phone. Consumers should be treated fairly.

  2. I believe that if the company is new and hasn’t had a time to build a high loyal customer base and reputation that it is more beneficial to sell products at a lower price, even though they are in fact of higher quality. Over time, you will then be able to raise the prices and maintain those customers that have come to love the product and services (such as free delivery) that you are offering. I agree that quality is very important when starting a new business or selling a new product, and it sounds like you are doing a good job of providing a high quality product and service.

  3. I believe that you are definitely building up a good reputation for your business by making sure the products you offer are of high quality. Regarding the low prices, it is a good strategy to start getting clients; however, in the near future you would need to make sure that the prices of your services and products are covering at least your basic costs. In my MGT 300 class, the professor had us run an online simulation of a coffee shop where we were able to choose different type of furniture, coffee and set our own prices. Most groups failed because everyone wanted to sell organic coffee and have a green theme furniture, but charge very low for the cup of coffee. My group particularly struggled a lot because we did not make up our minds if our strategy was low cost or differentiation, and our “business” suffered a lot the first couples of weeks. Therefore, I would suggest you make sure that your business’ strategy is known and also make sure that you charge the right price for the quality you offer.

  4. I think your strategy is great, for now. You mentioned that you service only local businesses and things are working well; hoewever, what happens when your business begins to grow? I think you also need to forecast your expected growth and how you can continue to provide low prices and high quality during expansion. Or like the comments before mentioned, will you be able to continue offering the same prices for the quality of product you are providing? I say plan early and be thorough, also allow for flexibility. Good luck.

  5. I agree with the comments above. I think that you have a great strategy. You recognize what is important to your company and your customers. Offering a low price for your high quality produce along with your many other advantages makes you a major competitor against your competition. As time goes on you will need to adjust your strategy once you have become more established because cost isn’t going to be sustainable in the long run because your other competitors can copy your low cost strategy.

  6. Your post made me think how a company breaks into a market, especially a brand new company. I think the best way to handle operations as a low cost strategy. I think if you minimize costs related to operations you can have a smaller markup on your produce and be more competitive to enter into a market in which company’s have lasting relationships with their suppliers.

  7. I agree with the above comments. Your strategy is good and is working out for you which makes it effective as well. As a new company, you want to offer low prices to attract potential clients and by offering free shipping you are building a greater clientele. In the long run, this may not work however, it is always good to change your strategy to achieve a different goal that you may set. Best of luck for your business!

  8. First of all it is mind blowing that you are starting up your own company, congrats ! You are absolutely right about the customer satisfaction. I read the all of the above things that you are wiling to give to your customers in order for them to feel satisfied so you end up with loyal customers. Your strategy is good if you offer low prices with the best product I dont see how you wont succeed ! 🙂

  9. In starting a new company you need to build up trust in the name under which you operate. There are a few ways that I believe will help you achieve this. You should offer a competitive price for relative goods that competing brands offer. If you price too low, your product may lose its integrity (customers often lose sight of how much things actually cost these days) but if you price too high you may lose the sale all together. You need to find a medium where you product is marketable and attractive to the buyer. Working in my family’s restaurants all my life, I have seen how important it is to build relationships with distributors. Don’t branch out too big and lose touch with the accounts you already have. Keep prices as steady as the market allows and your current accounts will bring you more business. There is no better form of advertising than word of mouth. So you, the owner and operator, should go out there personally and talk to the business owners you sell to periodically. It really is the small things that stand out in sales, it goes far beyond the product your selling. You might sell some good tomatoes but if you are impersonal or too big for the small guy, you won’t do very well. Hope this gives you something to work with… Good luck!!!

  10. Reputation is an intangible asset that says a lot about a company and its owners. Focus on maintaining a consistent level of quality and never sacrifice it over a minuscule advantage. Usually, the pricing strategy of choice for a company trying to enter a market full of competitors is, penetration pricing. This approach has its advantages and disadvantages. The goal with this strategy is to achieve high volume sales and deep market penetration. However, you have to be sure that the market is large enough to sustain relatively low profit margins. Eventually, your competitors will lower their prices too or you’ll have to match market prices due to low sale volumes. I believe you’ll do fine as long as you build a solid reputation and maintain lasting relationships with your suppliers and customers. Best of luck!

  11. Offering a lower price for a high-quality product can be a great way to attract customers because your company is still not known in the market. It needs time to establish itself. Therefore you have to attract new customers with your lower prices and then you should satisfy them your high quality products. This will eventually establish loyalty. After that, you can gradually increase your prices after establishing loyal customers who are inelastic to a small change in price.

  12. I think with your business you tried to focus on three strategies at the same time, as mentioned in class:

    1- Cost advantage: offering the lower prices to the customers by focusing on lowering the cost either for material or suppliers.
    2- Differentiation : establish a unique image by offering something different from others
    3- Quick response: good quality service where meeting demand is crucial, quality and time is important here.

    To me focusing on the three strategies at the same time is very hard , yes all three are important ,but in the long run there has to be a core strategy establish to base your image in the market .

  13. Quality is definitely a key driving factor for building up a positive reputation for the company and brand, and consequently facilitates the achievement of higher sales. Producing higher quality products may run up the company’s cost in the short-term; however, in the long-run, the payoff of establishing a name in the market more than makes up for these additional costs.

    Your post reminded me of the concept of TQM that I studied during my undergrad. Total Quality Management is a managerial approach to achieving customer satisfaction by instilling improved quality in all the products and processes of the organization. Each employee and stakeholder is held responsible for the improvement of quality within his own area of work. In this way, the importance of quality becomes ingrained into the culture of the entire organization.

  14. I think that by having the best quality you can grantee yourself a competitive advantage and use a blue ocean strategy far away from your competitors, so by providing good quality goods and services (plus free delivery) you’re tying in your customers and making sure you keep their switching cost as high as possible.

    At the end I think that focusing on your local area first is a good idea, then you can target other areas with same needs.

  15. I believe you and your cousin are going to run a very successful business due to the fact that you’re focusing on two of the most crucial aspects in selling; quality control and customer satisfaction. I cannot recall the number of times numerous professors throughout my entire business education stressed these two factors. Be it in Marketing, Management or Economics among many other courses, the first thing we get taught is,”keep your customer happy and satisfied”, to gain loyalty and “maintain good quality”, to gain competitive advantage. These factors along with a successful and sustainable business strategy are what cash cows are made of. So best of luck and I hope your business will soar to the highest tops of success…

  16. Personally, isn’t the goal of a company to offer the best quality at a lower price than competitors? If you are able to achieve this, your company will be recognized for great quality of your products and low prices. Offering the low price and good quality will not only keep your company afloat, but it was also make you very competitive in your business market. Happy customers mean loyal customers, so keep continuing your great quality for low prices.

  17. I think as a new company starting out, you should sell your products at a lower price. This will benefit the company in the long run. Even though you would not be able to earn as much profit at first, you will be able to build a good relationship with the consumers. I agree with you that the quality of the produce is important. This is needed to create a good reputation for your company. Overtime as your company has enough experience, the price can be raised gradually.

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