Some companies often feel annoyed that their products with good quality cannot make money. I do not agree with them. Products that are really in good quality and can satisfy the need of consumers and users will definitely make money. In fact, those companies that think good quality doesn’t sell have misunderstood quality. Enterprises make quality innovation to make profit, so products making no profit are of no value.
Quality is never likely to be free in economics. Costly investment in quality requires that its benefits should outnumber the cost. Bigger benefits make higher value. For enterprises, its investment is targeted on the benefits that quality can bring, not on quality itself. However, for consumers, quality is reflected by money or price paid. They are willing to pay higher price for the quality they more accept, and the quality provider will obtain more profit.
Quality can only be measured by profit rate from the perspective of input and output. Enterprises have stronger quality innovation capacity when their products are sold at a market price with higher profit margins. The criteria measuring quality innovation turns out to be benefits. Quality innovation can be achieved because quality has been creating values for consumers and users to maximize its input and output. If enterprises provide homogeneous products without any innovation as quality provider, their products will be only priced the same as the homogeneous products in the market. From market competition, enterprises providing homogeneous products will gain a profit of nearly zero and even loss. This is why Chinese enterprises favor price competition. Therefore, a company should produce heterogeneous products if it wants higher pricing and profit.
Many people have mistaken management approaches to quality innovation as its purposes. In fact, quality innovation needs control in the process of quality management, including application of different quality management systems and standard accreditation and testing methods in quality management, but management systems and control methods are just applied to achieve quality innovation. Quality management can never separate from benefits.
Besides, consumers’ evaluation of satisfaction after they purchase the products or services is essential to the success and benefits-making of quality innovation. Quality providers’ examination and control in quality is their subjective and self evaluation of quality. Consumers’ evaluation of qualities purchased are relatively objective. The focus of quality innovation is whether the quality can attract consumers who desire to buy and make the purchase, and are willing to pay the price for the products. Enterprises engaged in quality innovation will continue to improve their quality only when consumers accept and purchase their products and make further consumption. Only by doing this, sustainable increase will be attained in quality benefits.
The reason why we lack of quality innovation is that we use process instead of goal. We are often satisfied with the process of quality management, and tend to contend that good quality management, means good quality. Actually, quality should be determined by process, and investment should be determined by ability to make money. Quality that is unlikely to profit turns into cost, and will not be converted into income. Therefore, quality innovation in simple terms, means quality able to obtain profit and make money.