PRODUCT QUALITY AND CUSTOMERS' SATISFACTION

1.1 Background of the Study

The research consists of several basic steps. The first step consists in the self-evaluation by the respective companies of the quality of their own products, while the third step is essentially a comparison of results, so that any differences can be identified and addressed. The second one being the measurement of customer satisfaction with the products produced by the companies in question. Subsequently, it is necessary to identify quality management methods applied in the companies and the resulting performance. The outcomes of individual steps were compared and contrasted to enable conclusions regarding the actual influence of customer satisfaction on product quality, the influence of quality management on product quality and the influence of customer satisfaction and quality management on company performance. All of the above is expected to result in the improvement of managerial activities (or management per se) to ensure the long-term excellence of companies.

Considering the fact that the respondents (customers) need to be familiar with the products in question (and in order to have as many respondents as possible) the research was focused on Nestle Nigeria Plc. headquartered in Lagos, Nigeria. However, the company in question is indeed concerned with the quality control and sufficient amount of materials and data can be collected for research. That said, comparative research can be carried out in the future with regard to companies that do not have quality management systems in place, or companies from other industry sectors.

Therefore, this research is to measure customer satisfaction with the quality of products from Nestle Nigeria Plc., although the research does not cover the Nigerian customers in general, it represents especially the demographic group of customers. The aim of the article is to determine the level of satisfaction with the quality of product and to identify factors that affect satisfaction (including any correlations between the former and the latter).

The trend of world markets has changed noticeably, all of the service businesses are trying their best to improve their service and product quality by doing many efforts including promotion in order to make customers satisfied with their services. Customer satisfaction, a business term, is a measure of how products and services supplied by a company meet or surpass customer expectation. Every business wants to be the best at what they do and that includes customer satisfaction. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator. Some of the major sources of dissatisfaction for consumers are: not understanding how to use a product, not being able to find what was ordered online, or having packages delivered late. When customers are dissatisfied with quality or service, they often switch brands - which can lead to significant losses in revenue. The more unhappy customers you have, the more likely you are to lose them.

Some of the major sources of dissatisfaction for consumers are: not understanding how to use a product, not being able to find what was ordered online, or having packages delivered late. When customers are dissatisfied with quality or service, they often switch brands - which can lead to significant losses in revenue. The more unhappy customers you have, the more likely you are to lose them. (Munisih & Soliha, 2015).

On the other hand the world has come full circle from selling to marketing and from seller’s market to buyer’s market. The customer today has the option to buy what he thinks he should and from whom, being in his best interest. Product development, technological improvement, cost optimization and excellent service facility are very important for any organisation but their importance is only if the customer appreciates it. (Agyapong 2010: 64) For example, both diamond and coal are carbon but they are priced differently due to different valuations by the customer. Therefore, any business begins and ends with the customer (Syafarudin 2016).

Therefore, the success of any organization can be traced or linked with successful product quality and this depends on their ability to identify the needs of customers and to quickly create products that meet these needs. Therefore, product development is the process in which a new product or product improvement is created. Product development is broken down into many stages such as engineering, design, prototype construction and commercialization. The process of product development can be described as the life blood of any business organization. Lovelock & Wright (2015). Zabeen (2019) Satisfaction is determined by whether or not customers feel they have a satisfactory experience of a product. This will please your customers and they'll know they're on the right track, producing quality products and services, which the product itself differs from some of the features or factors through the expectation and also the presentation of the product itself. (Sheth, & Mittal, Banwari, 2015). Furthermore, companies worldwide lose half their customers every five years. But most managers fail to address that fact head-on by striving to learn why those defectors left. They are making a mistake, because a climbing switching rate is a sign that a business is in trouble. Managing a large organization is challenging, it requires leadership skills, strategic planning, and an understanding of human behaviour. But with the right guiding principles and strategies, managers can stem the decline and build a successful enterprise.Tjiptono(2015)suggests that by searching the root causes of customer departures, companies with the desire and capacity to learn can identify business practices which can win the customers back and re-establish the relationship on firmer ground.

Customer satisfaction is a fresh thought that is used to be the representative to wholly after purchasing effects on the products (Hertati & Safkaur, 2020: Khan, et, al, 2016: Pramudana & Satria, 2017: Sari, NP, Heny, 2018). Satisfying the needs of customers is not solely a marketing problem, nor is it solely a design or manufacturing problem. It is a product quality problem. Product quality is an interdisciplinary activity that requires contributions from nearly all the function of a firm however, three functions are almost central to a product quality effort. These include marketing, design and manufacturing Judith & Kincaid (2017). The marketing function mediates interactions between the firm and its customers. Marketers often facilitate the greatest possible benefit for clients, and we have decided to formalize the relationship with the other firms on the block chain. This will enable us to work together to better understand our customers’ needs and to have more effective communicate between the firms, and its customers, in other to set prices and oversees the launch and promotion of the product Razaq (2016). The design function leads the definition of the physical form of product to best meet customers’ needs. The design function is responsible for bringing ideas to life on a large scale. They can be engineers, industrialists, promoters, or a combination of all of these things. They are the glue that brings all of the other functions together, and shapes the company as a whole. Khan & Ahmed (2016) The manufacturing function is primarily responsible for designing and operating the production system in order to produce the product, the manufacturing function also includes purchasing, distribution and installation. . Khan & Ahmed et,al (2016).Although, some prefer the label production/operations management, the more global term of production used here is to emphasize that production system generates intangible services as well as tangible goods.

Ehsani&Ehsani (2015) states at least four reasons why it is important that you know something about production quality, the production of quality is hard work. The challenge is to earn profits, yet minimize expenses, by producing high-quality goods in a large volume. It is difficult to produce high-quality goods at a large scale, but it is not impossible. Production is a core organizational function. The production function commands the flow of resources through the organization. Society depends heavily on the output of productive organizations and the production function is tied to many serious societal components. A typical operation or production manager views organizations as productive systems, complete with inputs, a transformation process and output. The transformation process consists of interrelated parts, each depends on the other. Among the important parts of productive systems are these activities listed below, (Cruz 2015).

Customer service, sales, productions at a company are all impacted by the number of customers the company has and their perception of them. It’s the job of customer service to ensure that customers are satisfied with their experience. As such, service representatives can optimize their interactions with customers by understanding their expectations and following up accordingly. They provide products and services to fulfil different needs of the customers. The focus is now moving from short-term satisfaction to long-term relationship between the firm and its customers (Kusuman, & Abdillah, (2016). Finding new customers is important for a business, but equally important is keeping the old customers since many researchers found that focus on customer satisfaction has resulted in economic benefits Sirfaz, Sabir & Naz, (2016). With the change of time and situation, the scenario of business world is increasingly being competitive. On contrary, due to globalization and internationalization the competitiveness of business environment, either from national or international market, strongly motivates or develops the awareness about the consumer right along with their expectations and demands Kelemu & Mandefro (2017). According to Atiyah (2016), this is an issue that touches every aspect of the business world. The ability to categorize is an invaluable skill that allows one to quickly understand a situation or find information in a specific location. It would be beneficial to develop a set of identical terms to help better define this concept, allowing for better communication and understanding between the various disciplines of the business world. However, in real life goods retailers still offer for some form of service in order to motivate and facilitate higher level of sale of goods leading to have the relative influence in customer satisfaction.

Customer satisfaction is considered to be the primary goal for organizations that practice relationship market is to increase sales. The goal of relationship branding is the same, but bigger-scale. It’s about creating a strong brand image, getting people to know who they are, and creating an emotional connection with their customers and prospects. It’s a great idea, but it’s hard to pull off. Asshidin, Abidin, Borhan (2016). Once a customer is satisfied it means that the amount of purchase grows which in turn reduces the customer replacement costs. Over the past few years, we have noticed a trend in our customer base: some of our most loyal customers are choosing to pay a premium for our products instead of receiving a discount. They are deciding to purchase on a regular basis instead of only when they need something. This has forced us to change our business model to one where we are continually investing in our product and improving our customer experience so that our customers will want to come back to us again and again. This has been a great test for our company and has helped us to better understand what our customers really want and need. McMullan & Gilmore (2018).Interesting findings by Bastos and Gallego (2018) states that “It may be up to 10 times more expensive to gain a potential customer than it is to satisfy an existent one, and the price of getting a new customer up to the same value of the company as a lost one can be up to 16 substantially greater."

Many researchers in business associations have studied customer satisfaction and product quality. Griffin (2016) and their results have shown positive relation between product quality and customer satisfaction. It has been established that service quality significantly contribute to' consumers to accept again, become less price sensitive, and share their pleasant experiences with others. (Charan 2017). Similarly, these findings can be applied in retail setting where in today’s competitive retail sector, retailers no longer will afford to dissatisfy their customers on services side. Moreover, the significance of product quality in retail sector should also not be overlooked because the higher the quality in relation to price, the higher the value for customer. The quality of the product can only be assessed from the perspective of what the customer ultimately buys. If the customer buys less than they expected, the product is a failure; if more than expected, the product is a success. In 1987 David Garvin suggested the eight product quality dimensions: we identified in our research for improving product quality were: design and aesthetic, materials and textures, safety and health, service and support, and price and value. Also nine specific product quality characteristics were identified: recognisability, consistency, durability, responsiveness, affordability, safety, and quality. While these are broad characteristics, they capture the essence of these dimensions in terms of what consumers and users want to see in their products. Organizing these nine into a single list of characteristics help us to identify and prioritize the most important quality dimensions to focus on.

Sustained competitive advantage (SCA) is achieved when they want to be the best in their field, provide the best product or service and rank high on the list of companies people choose to do business with. However, sometimes the best competitive advantage is not the most expensive, the most modern, or the most innovative. It is the one that allows you to stay true to your values, your mission, and your vision while providing a sustainable competitive advantage that allows you to consistently outperform the competition and the organization’s developed strategy (Sugiarti, T, Thoyib, A, Hadiwidjojyo, D. & Setiawan, M. 2018). SCA is the key differentiator of the organization in making its competition irrelevant. Competitive advantage is not static; rather, it is extremely dynamic in nature, since it has to be as flexible as market conditions, especially when customer needs and resources availability are highly variables time to time. Change in technology has changed the competition landscape. Traditional way of controlling the resources simply does not work as small players also can have access to the advance level of technology with a very affordable cost by using the available open source information or the leasing facilities. Since sources of competitive advantage become scarcer, potential new areas of competitive advantage must be explored (Markley & Davis, 2017). Competitive advantage is created as a firm discovers a new or a more efficient way as compared to its competitors or as soon as it innovates.

Both quality of services and products in retail sector are considered to be vital for survival and success of the firm. Highly intensified and competitive retail industry has compelled firms to pursue strategies which could yield higher value for customers. Many retail companies would be unable to operate because large companies offered higher relative value of both service and product quality. Tu&Chih (2019).

Overall an organization should be able to create superior customer satisfaction. Adopting a customer satisfaction vision enables an organisation understand their customers and to win without a fight should be the supreme among all strategies. A firm can, under certain situations, win without fight by carefully positioning itself through innovation which affords it competitive advantages. Building a competitive advantage involves understanding the needs of the market (customers) and devising a strategy to make use of the resources that are available (or can be obtained) to set the business apart from the competition. The strategy needs to take into account the target market and the company’s strengths and weaknesses. Despite the high number of researches that explain and study the significant impact of creating sustainable competitive advantages of the performance of the company, still there are not many literature that focus on the factors of product quality and customers satisfaction for services and product perspective (for example; service quality, product quality) in business to business (B2B) sector. Together, these activities let managers carry out their economic function of transforming resources into useful goods and services.

1.2 Statement of the Problems

Compromising product quality in development stage may become very expensive for a company once product is launched. Cost of poor quality in the manufacturing industry lies between 5 to 25% of sales (Wilson, 2014) and service industries expenditure are even higher, of the order of 30-40%. Up to 95% of these costs are the failure and appraisal costs and mere 5% are the prevention costs (Bell, 2015; Vicent, 2016; Suthummanon, 2018). When quality-problems occur, the producer invariably receives the blame since, in the customer's mind; the producer has ultimate responsibility for the product. However, the reality is that, in many situations, external suppliers often provide the faulty components and subunits that make their way into final products (Trent et al., 2018). This research is backed by (Forker, 2019) who holds it that a product quality can only be as good as the quality raw materials from suppliers. In spite of the manufacturing organizations plea to get raw materials that meet or surpass their expectations, poor quality products have always found way in their supply chain. This study therefore sought to carry out an investigation on the factors affecting products quality and customers satisfaction as regards Nestle Nigeria Plc. product.

The system's overall design was mature. It was developed by means of modular branch designs. More adaptability is supplied by many modular parts. The mature design was rendered in terms of modular branch designs. The component of the design included workflow layout and architectural plans. A labour staffing plan that specified just how each operation is to be carried out, including labour time standards, a materials flow plan and layout and, the central warehouse design including storage layout and logistics supply system, the production operation layout, equipment specification, a schedule for the acquisition of property and the building of branches, and a complete financial analysis (Saleki & Sayedsaleki 2012).

Studies have shown that there are several factors that influence a customer’s decision to repurchase a product or service or to be satisfied to a particular product. . Lau et al. (2016) in his article mentioned that there were several factors that influenced consumers’ satisfaction towards certain brands. The factors were: brand name, product quality, price, promotion and service-quality. Other scholars and experts have also come up with factors that influence customers satisfaction and one thing remains common with them; they believe that product quality or perceived product quality plays a role in customer satisfaction however, a review of literature on the relationship between product quality and customers satisfaction has highlighted the gap in literature that critically analyses the product quality and customers satisfaction. Construct or the degree of effect that product quality has on customer’s satisfaction.

A review of different product quality models also emphasizes the gap in models that are constructed solely to explain the degree to which product quality influences brand loyalty. This is because most of the product quality models available highlight the chain of reaction from customer expectations to brand loyalty without breaking down the quality constructs into the different degrees that may be responsible for customer’s satisfaction. However, these models have been constructed to explain the product quality and brand loyalty process for different countries and their marketing environment. Till date, there is little or no product quality model that has been constructed to suit the Nigerian environment or to explain how product quality and customers satisfaction works in the Nigerian context.

For an organization to be successful, the conception of the process and facilities product design has to represent an integrated view of the conversion process for the system as a whole. In reviewing the longer-term operation decisions, we must realize that they are very significant to the future of the organization.

The decision set against the basic approach to supply distribution and operations for some time to come and committing the majority of the available capital of the enterprise. The key decision that set the design of the productive system is: The design of the product/service quality to be offered and finalized through an interactive process.