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A new system for rating service quality
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tion because form loyalty often exists among customers (canned versus dry cat food). Second, boundaries between product categories or usage situations serve to reduce the risk of cannibalization to almost zero (Ivory bar soap, detergent, dishwashing liquid and shampoo). A fourth question is: Can my brand name lose efictiveness over time from overextension? This is especially a problem where the extension is perceived as inconsistent with the parent’s brand image (Ivory scouring pads). Conversely, brand extensions consistent with the parent’s imagery will strengthen that image (Sunkist vitamin C tablets). One final consideration is to use dual branding where the parent’s name provides consumer reassurance while the extension differentiates (Coors Extra Bold, Campbell’s Chunky Soup). The above guidelines can then be used to decide whether relative emphasis will be on the parent or on the individual brand name, A New System for Rating Service Quality, Laura
A. Liswood, Journal of Business Strategy (JulyAugust 1989), pp. 42-45 (RKR) This short, provocative article addresses a potent topic in marketing either goods or services, namely rating quality. The author indicates how most corporations can be heli: accountable for their level of service quality. Research using the PIMS data base has confirmed that those companies with higher-quality products will have substantially higher results. Isn’t it time, the author asks, to provide stock analysts, bankers and others with a clean-cut way to confidently evaluate service levels? Do companies really know their cost of quality? In short, it’s time to move beyond the Malcolm Baldridge National Quality Awards to fully operationalize service quality via effective standards. The author argues that a company should provide independentiy audited service levels. The results might appear in annual reports or in company advertisements. Published information might include customer service survey results, tapping time requirements for product repair, lost credit card replacement, etc. Particularly appealing is the auditor’s idea that whatever customers point to as the service attributes most important to them would be reported. If accountants have GAAP (generally accepted
ABSTRACTS
accounting principles), why not create GASP (generally accepted service principles)? Auditors could track repair figures rating, for example, how often rental cars broke down on the road. GASP would influence stock prices and introduce a new capability for comparison between competing firms. Imagine avoiding companies with bad service records as a conscious choice rather than as the haphazard experience it is today. As the author maintains, companies doing business the right way should welcome GASP. Clearly, management, directors and analysts should look more deeply and significantly at how a company treats its customers and how effective its service is. The Paradox of Manufacturing Productivity and Innovation, Robert R. Bell and John M.
Burnham, Business Horizons (September-October 1989), pp. 58-64 (AAB) To be productive and to produce truly worldclass products in a worldwide marketplace with many consumer choices available, our manufacturing environments must also be truly worldclass in terms of innovation, flexibility and creativity. Since by definition these processes are not stable, we must design instability into those very production environments that have been designed for stability. Creating instability into the midst of stability, the authors suggest, is the paradox of manufacturing productivity and innovation. Traditional manufacturing approaches are based on the assumptions of a closed system where plant managers are trained to plan fgr fluctuations in the environment and to strive to eliminate perturbations and enhance stability. We create stabilized master schedules reflecting a smoothed forecast of demand and capacity, a policy of long, steady production runs, precise manpower and materials planning systems, standard operating procedures and standards for work performance. All of these are intended to give us predictable, consistent and controllable systems in which “efficiency” arises out of a stabilized internal environment. Automation further standardizes and stabilizes work flow and quality, but often backfires where producti;lity and change are on the agendas. Process innovation--making irn~rov~~~nts in the way manufacturing and distribution are car-
M$mINDIN,OV c ; :
MANAG
tion because form loyalty often exists among customers (canned versus dry cat food). Second, boundaries between product categories or usage situations serve to reduce the risk of cannibalization to almost zero (Ivory bar soap, detergent, dishwashing liquid and shampoo). A fourth question is: Can my brand name lose efictiveness over time from overextension? This is especially a problem where the extension is perceived as inconsistent with the parent’s brand image (Ivory scouring pads). Conversely, brand extensions consistent with the parent’s imagery will strengthen that image (Sunkist vitamin C tablets). One final consideration is to use dual branding where the parent’s name provides consumer reassurance while the extension differentiates (Coors Extra Bold, Campbell’s Chunky Soup). The above guidelines can then be used to decide whether relative emphasis will be on the parent or on the individual brand name, A New System for Rating Service Quality, Laura
A. Liswood, Journal of Business Strategy (JulyAugust 1989), pp. 42-45 (RKR) This short, provocative article addresses a potent topic in marketing either goods or services, namely rating quality. The author indicates how most corporations can be heli: accountable for their level of service quality. Research using the PIMS data base has confirmed that those companies with higher-quality products will have substantially higher results. Isn’t it time, the author asks, to provide stock analysts, bankers and others with a clean-cut way to confidently evaluate service levels? Do companies really know their cost of quality? In short, it’s time to move beyond the Malcolm Baldridge National Quality Awards to fully operationalize service quality via effective standards. The author argues that a company should provide independentiy audited service levels. The results might appear in annual reports or in company advertisements. Published information might include customer service survey results, tapping time requirements for product repair, lost credit card replacement, etc. Particularly appealing is the auditor’s idea that whatever customers point to as the service attributes most important to them would be reported. If accountants have GAAP (generally accepted
ABSTRACTS
accounting principles), why not create GASP (generally accepted service principles)? Auditors could track repair figures rating, for example, how often rental cars broke down on the road. GASP would influence stock prices and introduce a new capability for comparison between competing firms. Imagine avoiding companies with bad service records as a conscious choice rather than as the haphazard experience it is today. As the author maintains, companies doing business the right way should welcome GASP. Clearly, management, directors and analysts should look more deeply and significantly at how a company treats its customers and how effective its service is. The Paradox of Manufacturing Productivity and Innovation, Robert R. Bell and John M.
Burnham, Business Horizons (September-October 1989), pp. 58-64 (AAB) To be productive and to produce truly worldclass products in a worldwide marketplace with many consumer choices available, our manufacturing environments must also be truly worldclass in terms of innovation, flexibility and creativity. Since by definition these processes are not stable, we must design instability into those very production environments that have been designed for stability. Creating instability into the midst of stability, the authors suggest, is the paradox of manufacturing productivity and innovation. Traditional manufacturing approaches are based on the assumptions of a closed system where plant managers are trained to plan fgr fluctuations in the environment and to strive to eliminate perturbations and enhance stability. We create stabilized master schedules reflecting a smoothed forecast of demand and capacity, a policy of long, steady production runs, precise manpower and materials planning systems, standard operating procedures and standards for work performance. All of these are intended to give us predictable, consistent and controllable systems in which “efficiency” arises out of a stabilized internal environment. Automation further standardizes and stabilizes work flow and quality, but often backfires where producti;lity and change are on the agendas. Process innovation--making irn~rov~~~nts in the way manufacturing and distribution are car-