Many people are puzzled by the fact that a variety of enterprises accredited by quality management systems go bankrupt. Some may wonder why products manufactured by advanced quality standard doesn’t sell well as those produced by lower quality standard. What reasons are behind these facts? It turns out that a fatal misunderstanding exits in China’s current quality area, that is, many people simply equate quality with quality management. They think that valuing quality means enhancing quality management by introducing different management systems.
In fact, quality and quality management are two different concepts. Quality management is a means to achieving quality, but doesn’t equal to quality itself. Quality is the inherent traits to meet the needs, and real quality is the quality satisfying the needs, so is it true for the setting and application of quality standards. Therefore, enterprises should firmly grasp the essence of quality innovation, namely meeting the needs of users, to improve their quality. Quality targets can only be achieved by satisfying users’ needs, by which the management of quality is of value. Quality innovation is to continuously upgrade and improve the inherent traits by various methods such as techniques, management and culture, so as to better meet the needs of consumers and application and attain higher efficiency. Quality innovation should keep satisfying the differentiated and personalized needs.
Quality innovation depends on consumers because the target of quality is to meet consumers’ and users’ needs, which is mainly reflected by the following three aspects:
First, quality innovation should keep satisfying the multi-level needs of consumers. Consumers with different earnings vary in their preference for product quality and knowledge of quality information, so consumers have different requirements for quality. For example, the consumers with higher income tend to purchase high-quality products, middle-income class prefer popular quality products, and lower-income class are likely to buy necessities with basic functions. Actually, from the aspect of quality innovation, the three kinds of needs are equivalent and no distinction is found in their quality. High-quality products including luxuries do not necessarily have higher quality returns than products in average quality. Return on quality depends on the number of buyers, market profits and transaction volume. It is found that low-quality products are more in market demand and bring in more quality profits for enterprises. For instance, our manufactured products are well sold on a large scale in the United States, Japan and the European Union although their quality seems not as good as that of foreign products. This is because our low-priced products can better fulfill most consumers’ needs. Therefore, higher quality doesn’t always mean better quality, and it depends on whether the quality can satisfy different levels of consumer demand.
Second, quality innovation should maximize the satisfaction of individual demand. People are willing to pay different prices for the products with the same function because the products with the same function but different prices can satisfy people’s demand for various styles, colors and models. With the increase of people’s income, consumer demand has largely got rid of demand for a specific function and has been increasingly enriched with the meaning of social status and division of people. Those consumers pursuing individual demand are more concerned about symbolic meaning, cultural spirit and image value of products. Meanwhile, innovation of science and technology brings in the rapid development of information and intelligence technology, which better serves the individual demand of customers by providing technical support.
Finally, quality innovation should be continuously updated and improved without ending. Quality should not be identified by manufacturers but by consumers. Customer demand is always changing, which becomes the power source of the unceasing quality innovation. For example, Apple has made big profits in the traditional and surplus phone industry. It obtained an annual revenue of 233.715 billion USD in 2015 and an annual net profit of 52.394 billion USD. According to the Canaccord Genuity research, Apple’s mobile phones occupied 90% profits of the global smart phones, while most of our mobile phone manufactures made negative profits. Apple’s increasing annual business revenues and profits are due to their annually continuous product version upgrades. The essence of version updates is to satisfy the changing demand and obtain new business profits and revenues by improving product quality.
Therefore, only by quality innovation can quality be enhanced in China, so we should have been unceasingly satisfying the multi-level, personalized changing demand. Although demand is difficult to be satisfied, that is exactly why we should keep making quality innovation.