What Does Product Quality Really Mean_Garvin

8/3/2019 What Does Product Quality Really Mean_Garvin

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In this article. the au-thor reviews and syn-thesizes the varyingdefinitions of productquality arising fromphilosophy. econom-ics. marketing. and op-erations management.He then goes on tobuild an eight-dimensional frame-work to elaborate onthese definitions.Using this framework.he addresses the empir-ical relationships be-tween quality and vari-ables such as price. ad-vertising. market share.cost. and profitability.E d.

Sloan Management Review ---~-.-.-----~~--- .-.------.--.--~-Fall 1984 25What Does "Product Quality"Really Mean?

David A. Garvin

Product quality is rapidly becoming an im-portant competitive issue. The superior reli-ability of many Japanese products hassparked considerable soul-searching amongAmerican managers." In addition, severalsurveys have voiced consumers' dissatisfac-tion with the existing levels of quality andservice of the products they buy.? In a recentstudy of the business units of major NorthAmerican companies, managers ranked"producing to high quality standards" astheir chief current concern."Despite the interest of managers, the aca-

demic literature on quality has not been re-viewed extensively. The problem is one ofcoverage: scholars in four disciplines - phi-losophy, economics, marketing, and opera-tions management - have considered thesubject, but each group has viewed it from adifferent vantage point. Philosophy has fo-cused on definitional issues; economics, onprofit maximization and market equilibrium;marketing, on the determinants of buyingbehavior and customer satisfaction; and op-erations management, on engineering prac-tices and manufacturing control. The resulthas been a host of competing perspectives,each based on a different analytical frame-work and each employing its own terminol-ogy.At the same time, a number of common

themes are apparent. All of them have im-portant management implications. On theconceptual front, each discipline has wres-tled with the following questions: Is qualityobjective or subjective? Is it timeless or so-cially determined? Empirically, interest hasfocused on the correlates of quality. What,for example, is the connection between qual-ity and price? Between quality and advertis-ing? Between quality and cost'? Betweenquality and market share'? More generally,

Harvard University

do quality improvements lead to higher orlower profits?

Five Approaches to Defining QualityFive major approaches to the definition ofquality can be identified: (1) the transcen-dent approach of philosophy; (2 ) the prod-uct-based approach of economics; (3) theuser-based approach of economics, market-ing, and operations management; and (4) themanufncturing-based and (5) value-basedapproaches of operations management.Table 1presents representative examples ofeach approach.1.The Transcendent ApproachAccording to the transcendent view, qualityis synonymous with "innate excellence.'?' Itis both absolute and universally recogniz-able, a mark of uncompromising standardsand high achievement. Nevertheless, propo-nents of this view claim that quality cannotbe defined precisely; rather, it is a simple.unanalyzable property that we learn to rec-ognize only through experience. This defini-tion borrows heavily from Plato's discussionof beauty." In the SY!11posiuIT1,e argues thatbeauty is one of the "platonic forms," and.therefore, a term that cannot be defined. Likeother such terms that philosophers considerto be "logically primitive," beauty (and per-haps quality as well) can be understood onlyafter one is exposed to a succession of objectsthat display its characteristics.2.The Product-based ApproachProduct-based definitions are quite different;they view quality as a precise and measur-able variable. According to this view, differ-ences in quality reflect differences in the


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26 Garvin Product Quality-._----_------------------

Table 1 Five Definitions of Quality----------------------------------- ------------_----------I. Transcendent Definition:_ "Quality is neither mind nor matter, but a third entity independent of the two ... even though Qualitycannot be defined, you know what it is." (R. M. Pi rsi g, Zen and the Mt oj Motorcvcle Mainten(lnce, ~p. 1U5, lJ:lI_ " ... a condition of excellence implying fine quality as distinct from poor quality ... . Quality is achieving orreaching for the highest standard as against being satisfied with the sloppy orfraudulent." (B. W. Tuchman, "The

Decl ine 01Quality," Nerv York Times Ml1gnzine, 2 November 10BO, p . :H I)II. Product-based Definition:

_ "Differences in quality amount to differences in the quantity of some desired ingredient or attribute,"(L. Abbott, QU(Jlity and Compeli t1 .o11, I -'p. 1:! fi --127)

- "Quality refers to the amounts of the unpriced attributes contained in each unit of the priced attribute."(K. U.Leffler, "Ambiguous Changes in Product Quality," American Economic Bedp.lV, December 1902, p. 95li)

III. User-based Definition:- "Quality consists of the capacity to satisfy wants, .. " (C. D. Edwards, 'The Meaning of Quality," Qll(J/ity Progress, October

191ill, p. 37)- "Quality is the degree to which a specific product satisfies the wants of a specific consumer." [ 1 - 1 . L. Gilmore,

"Product Conformance Cost," QualilY Progress, [une 1974, p. 16)- "Quality is any aspect of a product, including the services included in the contract of sales, which influencesthe demand curve," (It. Dorfman and P.O. Steiner, "Opttmnl Advertising and Optimal Quality," Amerjcnu Economic Het-iew, December

1954, p. Il:ll)- "In the final analysis of the marketplace, the quality of a product depends on how well it fits patterns ofconsumer preferences." (A. A. Kuenn and R. L. Day, "Strategy of Product Quality," Hnrvurd lll lsinoss Review, November-December

'1962, p. 101)- "Quality consists of the extent to which a specimen [a product-brand-model-seller combination] possessesthe service characteristics you desire." (E. S. Maynes, "The Concept and Measurement of Product Quality," in Household

I'rcducnon and Consn rnptioll, p. 5-!2)- "Quality is fitness for use." ( I. M.luran , ed., Quu!Hv Control I!onrlbook. p , 2-2)

IV. Manufacturing-based Definition:- "Quality [means] conformance to requirements." (1'. B. Crosby, QUflli ty Is Free, p . 15)- "Quality is the degree to which a specific product conforms to a design or specification." (Gilmore. luno 1974.

p.1HIV. Value-based Definition:- "Quality is the degree of excellence at an acceptable price and the control of variability at an acceptablecost." (R. A. Broh, Managing Quality for iligher Projits, 19B2, p. :1)- "Quality means best for certain customer conditions. These conditions are (a) the actual use and(b) the selling price of the product." (A. V. Feigenbaum, Total Q'mli ty Control , p. 1)

quantity of some ingredient or attribute pos-sessed by a product." For example, high-quality ice cream has a high butterfat con-tent, just as fine rugs have a large number ofknots per square inch. This approach lends avertical orhierarchical dimension to quality,for goods can be ranked according to theamount of the desired attribute that theypossess. However, an unambiguous rankingis possible only if the attributes in questionare considered preferable by virtually allbuyers."

Product-based definitions of quality firstappeared in the economics literature, wherethey were quickly incorporated into theoret-ical models. In fact, the early economic re-search on quality focused almost exclusivelyon durability, simply because it was so easilytranslated into the above framework." Sincedurable goods provide a stream of servicesover time, increased durability implies alonger stream of services - in effect, more ofthe good. Quality differences could, there-fore, be treated as differences in quantity,


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Sloan Management Review

David A. Garvin is As-sociate Professor ofBusiness Administra-tion at the GraduateSchool of BusinessAdministration, Har-vard University. Dr.Garvin holds the A.B.degree from HarvardUniversity and thePh.D. degree fromM.I.T. His primary re-search interests are inthe areas of prod uctionand operations man-agement, industrialeconomics, and discus-sion teaching. Dr. Gar-vin has had consultingand executive educa-tion experience withmajor U.S. corpora-tions, nonprofit organi-zations, and publicagencies. He is the au-thor ofThe Economicsof University Behaviorand coauthor of Casesin Operotions Man-agement. His many ar-ticles have appeared illsuch journals as Co-l urnbic journo] o fWodd Business, Busi-ness Horizons, HarvardBusiness Review, andCclifornto Manage-ment Review.

considerably simplifying the mathematics.There are two obvious corollaries to thisapproach. First, higher quality can only beobtained at higher cost. Because quality re-flects the quantity of attributes that a productcontains, and because attributes are consid-ered to be costly to produce, higher-qualitygoods will be more expensive. Second, qual-ity is viewed as an inherent characteristic ofgoods, rather than as something ascribed tothem. Because quality reflects the presenceor absence of measurable product attributes,it can be assessed objectively, and is basedon more than preferences alone.3. The User-based Approach .>,User-based definitions start ffom the oppo-site premise that quality "lies in the eyes ofthe beholder." Individual consumers are as-sumed to have different wants or needs, andthose goods that best satisfy their prefer-ences are those that they regard as having thehighest quality. 9 This is an idiosyncratic andpersonal view of quality, and one that ishighly subjective. In the marketing litera-ture, it has led to the notion of "idealpoints": precise combinations of product at-tributes that provide the greatest satisfactionto a specified consumer."? in the economicsliterature, to the view that quality differencesare captured by shifts in a product's demandcurve."! and in the operations managementliterature, to the concept of "fitness foruse." 12 Each of these concepts, however,faces two problems. The first is practical -how to aggregate widely varying individualpreferences so that they lead to meaningfuldefinitions of quality at the market level. Thesecond is more fundamental - how to dis-tinguish those product attributes that con-note quality from those that simplymaximize consumer satisfaction.The aggregation problem is usually re-solved by assuming that high-quality prod-ucts are those that best meet the needs of amajority of consumers. A consensus of viewsis implied, with virtually all users agreeingon the desirability of certain product attri-butes. Unfortunately, this approach ignoresthe different weights that individuals nor-

Fall 1984 27

mally attach to quality characteristics, andthe difficulty of devising an unbiased statis-tical procedure for aggregating such widelyvarying preferencr 'S.13 For the most part,these problems have been ignored bytheorists. Economists, for example, have typ-ically specified mouels in which the marketdemand curve responds to quality changeswithout explaining how that curve, whichrepresents the summation of individualpreferences, was derived in the first place.v'A more basic problem with the user-basedapproach is its equation of quality with max-imum satisfaction. While the two are related,they are by no means identical. A productthat maximizes satisfaction is certainly pref-

erable to one that meets fewer needs, but is inecessarily better as well'? The impliedequivalence often breaks down in practice. Aconsumer may enjoy a particular brand because of its unusual taste or features, yet maystill regard some other brand as being ohigher quality. In the latter assessment, theproduct's objective characteristics are alsobeing considered.Even perfectly objective characteristics,however, are open to varying interpretations.Today, durability is regarded as an impor-tant element of quality. Long-lived productsare generally preferred to those that wear oumore quickly. This was not always true: untilthe late nineteenth century, durable goodswere primarily possessions of the poor, foonly wealthy individuals could afford deli-cate products that required frequent replacement or repair. IS The result waslong-standing association between durabil-ity and inferior quality, a view tha t changedonly with the mass production of luxuryitems made possible by the Industrial Revolution.4. The Manufacturing-based ApproachUser-based definitions of quality incorporatesubjective elements, for they are rooted inconsumer preferences - the determinants odemand. In contrast, manufacturing-baseddefinitions focus on the supply side of theequation, and are primarily concerned withengineering and manufacturing practice.


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Product QualityGarvin --------------------------

Virtually all manufacturing-based defini-tions identify quality as "conformance torequirements. "16 Once a design or a speci-fication has been established, any deviationimplies a reduction in quality. Excellence isequated with meeting specifications, andwith "making it right the first time." In theseterms, a well-made Mercedes is a high-quality automobile, as is a well-madeChevette.While this approach recognizes the con-

sumer's interest in quality - a product thatdeviates from specifications is likely to bepoorly made and unreliable, providing lesssatisfaction than one that is properly con-structed - its primary focus is internal.Quality is defined in a manner that simplifiesengineering and production control. On thedesign side, this has led to an emphasis onreliability engineering;"? and on the man-ufacturing side, to an emphasis on statisticalquality control. 18 Both techniques are de-Signed to weed out deviations early: theformer, by analyzing a product's basic com-ponents, identifying possible failure modes,and then proposing alternative designs toenhance reliability; the latter, by employingstatistical techniques to discover when aproduction process is performing outsideacceptable limits.Each ofthese techniques is focused on the

same end: cost reduction. According to themanufacturing-based approach, improve-ments in quality (which are equivalent toreductions in the number of deviations) leadto lower costs, for preventing defects isviewed as less expensive than repairing orreworking thern.t? Firms are, therefore, as-sumed to be performing suboptimally: werethey only to increase their expenditures onprevention and inspection - testing pro-totypes more carefully or weeding out alarger number of defective components be-fore they become part of fully assembledunits - they would find their rework, scrap,and warranty expenses falling by an evengreater amount. 20

5.The Value-based ApproachValue-based definitions take this idea one

step further. They actually define quality interms of costs and prices. According to thisview, a quality product is one that providesperformance at an acceptable price or con-formance at an acceptable COSt.21Under thisapproach, a $500 running shoe, no :matterhow well constructed, could not be a qualityproduct, for it would find few buyers.A recent survey of consumer perceptions

of quality in twenty-eight product categoriessuggests that the value-based view is becom-ing more prevalent.s- While ingredieI1 ts andmaterials were seen as the key quality indi-cators in such categories as food, clothing,personal care, and beauty products - reflect-ing a product-based approach to the subject- the study'S overall conclusion vvas that"quality is increasingly apt to be discussedand perceived in relationship to price."The difficulty in employing this approach

lies in its blending of two related but distinctconcepts. Quality, which is a measure of ex-cellence, is being equated with value. 'vvhiohis a measure of worth. The result is a hybrid- "affordable excellence" - that lackswell-defined limits and is difficult to applyin practice.The Implications ofMultiple DefinitionsMost existing definitions of quality f'all intoone of the categories listed above. Thecoexistence of these differing approacheshas several important implications. First, ithelps to explain the often competing viewsof quality held by members of the mar ketingand manufacturing departments. Marketingpeople typically take a user-bas ed orproduct-based approach to the subj eet; forthem, higher quality means better perfor-mance, enhanced features, and other im-provements that increase cost. Because theysee the customer as the arbiter of quality,they view what happens in the factory asmuch less important than what happens inthe field.Manufacturing people normally take a dif-

ferent approach. For them, quality arieansconformance to specifications and an em-phasis on "doing it right the first ti:tn_e." Be-cause they associate poor quality with high


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Sloan Management Review 29all 1984

levels of rework and scrap, manufacturingpeople usually expect quality improvementsto result in cost reductions.The Potential for Conflict. These two viewsare obviously in conflict, and can cause seri-ous breakdowns in communications. Reme-dial efforts may become paralyzed if thecoexistence of these competing perspectivesis not openly acknowledged. For example, alarge division of a major consumer goodscompany recently reviewed its quality man-agement practices. The firm was especiallyinterested in assessing its new-product in-troduction process, for new products wereregarded as the key to competitive success.Two divergent views emerged. One groupfelt that the process had been quite success-ful: new products appeared regularly, cus-tomer complaints were few, and defectiveitems had not been shipped to the trade inany large number. Another group felt thatthe process had to be revamped becausequality was so poor: new product releaseswere frequently delayed while designs werereconfigured to adapt to manufacturing re-quirements, and material and labor variancesof several hundred thousand dollars had beenincurred because of unanticipated expendi-tures on rework and scrap. Because of thesedisagreements, the project quickly stalled.Further progress requires the recognitionthat one group is employing a user-baseddefinition of quality while the other is em-ploying a manufacturing-based approach.Only then are the two groups likely to agreeon the nature of the problems they face.The Need for Different Definitions. Despitethe potential for conflict, companies need tocultivate such differing perspectives, forthey are essential to the successful introduc-tion of high-quality products. Reliance on asingle definition of quality is a frequentsource of problems. For example, a Japanesepaper manufacturer recently discovered thatits newsprint rolls failed to satisfy customerseven though they met the Japanese IndustrialStandard. Conformance was excellent,reflecting a manufacturing-based approachto quality, but acceptance was poor. Other

rolls of newsprint, however, generated nocustomer complaints even though theyfailed to meet the standard.e> A leading U.S.manufacturer of room air conditioners facedthe opposite problem. Its products werewell received by customers and highly ratedby Consumer Reports. Reject, scrap, andwarranty costs were so high, however, thatlarge losses were incurred. While the prod-uct's design matched customers' needs, thefailure to follow through with tight confor-mance in manufacturing cost the companydearly.These examples suggest the need to ac-tively shift one's approach to quality asproducts move from design to market. Thecharacteristics that connote quality must firstbe identified through market research (auser-based approach to quality); thesecharacteristics must then be translated intoidentifiable product attributes (a product-based approach to quality); and the manufac-turing process must then be organized to en-sure that products are made precisely tothese specifications (a manufacturing-basedapproach to quality). A process that ignoresanyone of these steps will not result in aquality product. All three views are neces-sary and must be consciously cultivated.Nevertheless, each of the major ap-proaches to quality shares a common prob-lem. Each is vague and imprecise when itcomes to describing the basic elements ofproduct quality. Relatively few analysts,with the exceptions of juran>' and Maynes;"have shown an interest in these details. Thatoversight is unfortunate, for much can belearned by treating quality in a less homoge-

neous fashion.

EightDimensions of QualityEight dimensions can be identified. as aframework for thinking about the baSIC ele-ments of product quality:1. Performance,2. Features,


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30 Garvin product Quality

3 . Reliability,4. Conformance,5. Durability,6. Serviceability,7 . Aesthetics,8 . Perceived Quality.Each is self-contained and distinct, for aproduct can be ranked high on one dimen-sion while being low on another.1.PerformanceFirst on the list is performance, which refersto the primary operating characteristics of aproduct. For an automobile, these would betraits like acceleration, handling, cruisingspeed, and comfort; for a television set, theywould include sound and picture clarity,color, and ability to receive distant stations.This dimension of quality combines ele-ments of both the product and user-basedapproaches. Measurable product attributes

are involved, and brands can usually beranked objectively on at least one dimensionof performance. The connection betweenperformance and quality, however, is moreambiguous. Whether performance differ-ences are perceived as quality differencesnormally depends on individual prefer-ences. Users typically have a wide range ofinterests and needs; each is likely to equatequality with high performance in his or herarea of immediate interest. The connectionbetween performance and quality is also af-fected by semantics. Among the words thatdescribe product performance are terms thatare frequently associated with quality as wellas terms that fail to carry the association. Forexample, a 100-watt light bulb providesgreater candlepower (performance) than a60-watt bulb, yet few consumers would re-gard this difference as a measure of quality.The products simply belong to different per-formance classes. The smoothness andquietness of an automobile's ride, however,is typically viewed as a direct reflection of itsquality. Quietness is therefore a performancedimension that readily translates into qual-

ity, while candlepower is not. These differ-ences appear to reflect the conventions of theEnglish language as much as they do per-sonal preferences.There is a clear analogy here to Lancaster'stheory of consumer demand.>' The theory isbased on two propositions.s?All goods possess objective characteristics rele-vant to the choices which people make amongdifferent collections of goods. The relationshipbetween . . . a good . . . and the characteristicswhich it possesses is essentially a technical rela-tionship, depending on the objective characteris-tics of the good. ...Individuals differ in their reaction to differentcharacteristics, rather than in their assessments ofthe characteristics .... It is these characteristics inwhich consumers are interested . . . the variouscharacteristics can be viewed ... as each helpingto satisfy some kind of "want."In these terms, the performance of a productwould correspond to its objective charac-teristics, while the relationship between per-formance and quality would reflect individ-ual reactions.2. FeaturesThe same approach can be applied to prod-uct features, a second dimension of quality.Features are the "bells and whistles" ofproducts, those secondary characteristicsthat supplement the product's basic func-tioning. Examples include free drinks on aplane flight, permanent press as well as cot-ton cycles on a washing machine, and auto-matic tuners on a color television set. Inmany cases, the line separating primaryproduct characteristics (performance) fromsecondary characteristics (features) isdifficult to draw. Features, like product per-formance, involve objective and measurableattributes; their translation into quality dif-ferences is equally affected by individualpreferences. The distinction between the twois primarily one of centrality or degree ofimportance to the user.3. ReliabilityReliability is a third dimension of quality. Itreflects the probability of a product's failingwithin a specified period of time. Among the


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Sloan Management Review fall 1984 31----, ----------,

most common measures of reliability are themean time to first failure (MTFF). the meantime between failures (MTBF), and the fail-ure rate per unit time.28 Because these mea-sures require a product to be in use for someperiod, they are more relevant to durablegoods than they are to products and servicesthat are consumed instantly. Japanese man-ufacturers typically pay great attention tothis dimension of quality. and have used it togain a competitive edge in the automotive,consumer electronics, semiconductor, andcopying machine industries.4. ConformanceA related dimension of quality is confor-mance, or the degree to which a product'sdesign and operating characteristics matchpreestablished standards. Both internal andexternal elements are involved. Within thefactory, conformance is commonly measuredby the incidence of defects: the proportion ofall units that fail to meet specifications, andso require rework or repair. In the field, dataon conformance are often difficult to obtain,and proxies are frequently used. Two corn-man measures are the incidence of servicecalls for a product and the frequency of re-pairs under warranty. These measures, whilesuggestive, neglect other deviations fromstandard, such as misspelled labels orshoddy construction, that do not lead toservice or repair. More comprehensive mea-sures of conformance are required if theseitems are to be counted.Both reliability and conformance areclosely tied to the manufacturing-based ap-proach to quality. Improvements in bothmeasures are normally viewed as translatingdirectly into quality gains because defectsand field failures are regarded as undesirableby virtually all consumers. They are. there-fore, relatively objective measures of quality,and are less likely to reflect individual pref-erences than are rankings based on perfor-mance or features.5. DurabilityDurability, a measure of product life, hasboth economic and technical dimensions.

Technically. durability can be defined as theamount of use one gets from a product beforeit physically deteriorates. A light bulb pro-vides the perfect example: after so manyhours of use, the filament burns up and thebulb must be replaced. Repair is impossible.Economists call such products "one-hessshays," and have used them extensively inmodeling the production and consumptionof capital goods.>?Durability becomes more difficult to inter-pret when repair is possible. Then the con-cept takes on an added dimension, for prod-uct life will vary with changing economicconditions. Durability becomes the amountof use one gets from a product before itbreaks down and replacement is regarded aspreferable to continued repair. Consumersare faced with a series of choices: each time aproduct fails, they must weigh the expected

cost, in both dollars and personal inconve-nience, of future repairs against the invest-ment and operating expenses of a newer,more reliable model. In these circumstances,a product's life is determined by repair costs,personal valuations of time and inconve-nience, losses due to downtime, relativeprices, and other economic variables, asmuch as it is by the quality of components ormaterials.This approach to durability has two im-portant implications. First, it suggests thatdurability and reliability are closely linked.A product that fails frequently is likely to bescrapped earlier than one that is more reli-able; repair costs will be correspondinglyhigher, and the purchase of a new model willtook that much more desirable. Second, thisapproach suggests that durability figuresshould be interpreted with care. An increasein product life may not be due to technicalimprovements or to the use of longer-livedmaterials; the underlying economic envi-ronment may simply have changed. For ex-ample, the expectecllife of an automobile hasrisen steadily over the last decade, and now

averages fourteen years."? Older automobilesare held for longer periods and have becomea greater percentage of all cars in use.31Among the factors thought to be responsible


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32 Garvin Product Quality

for these changes are rising gasoline pricesand a weak economy, which have reducedthe average number of miles driven per year,and federal regulations governing gasmileage, which have resulted in a reductionin the size of new models and an increase inthe attractiveness to many consumers of re-taining older cars. In this case, environmen-tal changes have been responsible for muchof the reported increase in durability.

6. ServiceabilityA sixth dimension of quality is serviceabil-ity, or the speed, courtesy, and competenceofrepair. Consumers are concerned not onlyabout a product breaking down, but alsoabout the elapsed time before service is re-stored, the timeliness with which serviceappointments are kept, the nature of theirdealings with service personnel, and the fre-quency with which service calls or repairsfail to resolve outstanding problems. Someof these variables can be measured quite ob-jectively; others reflect differing personalstandards ofwhat constitutes acceptable ser-vice. For example, a recent study of con-sumer satisfaction with professional servicesfound the major complaints to be that "theservice was provided in a careless, unprofes-sional manner" and that "I feel I was treatedas an object rather than as an individual."32These comments clearly reflect subjectiveviews ofwhat constitutes acceptable profes-sional behavior. Other aspects of service canbe assessed more objectively. Responsive-ness is typically measured by the mean timeto repair (MTTR), while technical compe-tence is reflected in the incidence ofmultipleservice calls required to correct a singleproblem. Because most consumers equatemore rapid repair and reduced downtimewith higher quality, these elements of ser-viceability are less subject to personal in-terpretation than are those involving evalua-tions of courtesy or standards ofprofessionalbehavior. A number of companies havebegun emphasizing this dimension of qual-ity. Caterpillar Tractor's promise that it willdeliver repair parts anywhere in the worldwithin forty-eight hours and Mercedes'

guarantee of twenty-four-hour (overnight)service in California and Arizona show thateven top-of-the-line producers believe thatthis approach has value.7.AestheticsThe final two dimensions of quality are themost subjective. Both aesthetics and per-ceived quality are closely related to theuser-based approach. Aesthetics - how aproduct looks, feels, sounds, tastes, or smells- is clearly matters of personal judgment,and reflections of individual preferences. Infact, the marketing concept of "ideal points"- those combinations of product attributesthat best match the preferences of a specifiedconsumer - was originally developed tocapture just this dimension of quality.P8. Perceived QualityPerceptions ofquality can be as subjective asassessments of aesthetics. Because consum-ers do not always possess complete informa-tion about a product's attributes, they mustfrequently rely on indirect measures whencomparing brands.>' In these circumstances,products will be evaluated less on their ob-jective characteristics than on their images,advertising, or brand names. These forceseven affect scholarly judgments. When pro-fessors around the country were asked torank the departments in their fields by qual-ity, their rankings were only partially ex-plained by such objective measures as thenumber of articles published in leadingjournals bymembers of the department. Bothreputation - the historical strength of thedepartment - and affiliation - the qualityof the university to which a department wasattached - were equally important in ex-plaining the rankings.vTogether, the eight major dimensions of

quality cover a broad range of concepts. Sev-eral of the dimensions involve measurableproduct attributes; others reflect individualpreferences. Some are objective and time-less, while others shift with changing fash-ions. Some are inherent characteristics ofgoods, while others are ascribed characteris-tics.


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Sloan Management Review

The diversity of these concepts helps toexplain the differences among the five tra-ditional approaches to quality. Each of theapproaches focuses implicitly on a differ-ent dimension of quality; the product-basedapproach focuses on performance, features,and durability; the user-based approach fo-cuses on aesthetics and perceived quality;and the manufacturing-based approach fo-cuses on conformance and reliability. Con-flicts among the five approaches are inevita-ble because each defines quality from a dif-ferent point of view. Once the concept isunbundled, however, and each dimension isconsidered separately, the sources of dis-agreement become clear.The Strategic Importance of QualityDimensionsA recognition of these eight dimensions isalso important for strategic purposes. A firmthat chooses to compete on the basis ofquality can do so in several ways; it need notpursue all eight dimensions at once. Instead,a segmentation strategy can be followed,with a few dimensions Singled out for spe-cial attention. For example, Japanese man-ufacturers have traditionally entered U.S.markets by emphasizing the reliability andconformance of their products while down-playing the other dimensions of quality. Thesuperior "fits and finishes" and low repairrates of Japanese automobiles are wellknown; what are less frequently recognizedare their poor safety records (performance)and low corrosion resistance (durability).Despite these drawbacks, Japanese automo-biles have corne to symbolize the very best inquality for many American consumers.This example suggests that firms can suc-

cessfully pursue a relatively narrow qualityniche. In fact, they may have no other choiceif competitors have already establishedbroad reputations for excellence. In thesecircumstances, new entrants may only beable to secure a defensible position if theyfocus on an as yet untapped dimension ofquality.This pattern clearly fits the piano industry.

For many years, Stein way & Sons has been

Fall 1984 33

the quality leader; its instruments are knownfor their even voicing (the evenness ofcharacter and timbre of each of the eighty-eight notes on the keyboard), the sweetnessof their registers (the roundness and softnessof tone throughout the piano's entire range),the duration of their tone, their long lives,and their finely polished woodwork.w Eachpiano is handcrafted, and each is unique insound and style. Despite these advantages,Steinway has recently been challenged byYamaha, a Japanese manufacturer that hasdeveloped a strong reputation for quality in arelatively short time. Yamaha has done so byemphasizing reliability and conformance,two dimensions of quality that are IowanSteinway's list, rather than artistry anduniqueness. In fact, one of Yamaha's majorselling points is that all of its pianos soundexactly the same. Both companies enjoy highprofits, despite their widely varying ap-proaches to quality.This example suggests the importance of

carefully targeting one's quality niche. Theselection of a defensible niche, however, isonly a first step. Operational requirementsmust also be met, for each dimension of qual-ity imposes its own demands on the firm.High performance requires careful attentionto design and a strong design staff; superiordurability requires the use of long-lived or"derated" components and close coopera-tion between the engineering and purchas-ing departments; superior conformance re-quires attention to written specifications andprecision in assembly; and exceptional ser-viceability requires a strong customer ser-vice department and active field represen-tatives. In each case, a different functionenjoys the lead role, and different tasks arerequired for success. The managerial impli-cations of this analysis should be obvious:after selecting the dimensions of quality onwhich it hopes to compete, a firm must tailorits organization and operations to meet thesespecific needs. Otherwise, the wrong de-partments may be elevated in status, or thewrong tasks pursued. Disaggregating theconcept of quality allows companies to pin-point these operating requirements as care-


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34 Garv in Product Quality"-"-----"---"---"-- -----"---" ----

fully as they target untapped markets.

Correlates of QualityManagers are interested in quality primarilybecause of its marketing and financial impli-cations. Many believe that a product's price,advertising, market share, costs, and profit-ability are connected in some way to productquality. The following section of the articleexplores the theory and evidence in each ofthese areas.Quality and PriceThe theoretical argument about the relation-ship between quality and price runs in bothdirections. On the one hand, quality andprice are assumed to be positively correlated.If higher quality can only be produced athigher cost, and if costs and prices are, aseconomic theory suggests, positively related,then quality and price will move together.P"This assumes, however, that consumers pos-sess sufficient information to evaluate prod-uct quality. If they do not, they will rely onother cues when making that assessment, in-cluding comparative prices.s" As Rieszpoints out, once managers observe this be-havior, they may then respond by readjust-ing prices:Ifmanagers believe that perceptions and perhapsconsumer purchase decisions are positively corre-lated with price, they may set higher prices inorder to imply higher product quality. Price,therefore, may become a means of differentiatinga product .... Such pricing strategies ... wouldlikely result in a deterioration of the price-qualityrelationship within a product categoty.t?The theory, then, is equivocal. Quality andprice mayor may not be positively correlated,depending on the amount of informationavailable to consumers. The empirical re-sults are equally mixed. A number of studieshave found a positive correlation betweenthe two variables.sv These studies, however,were based primarily on experimental evi-dence rather than on market data. Whenmarket data were used, the results differedby product category. Nondurables generallydisplayed a weak or negative correlation be-

tween price and quality (with quality mea-sured by Consumer Report rankings, whichtypically focus on product performance),while durables showed a significant positivecorrelation." The findings for durables arebroadly consistent with research on the pur-chase decision for major home appliances.Westbrook et a1. found that 86 percent ofrecent purchasers and 75 percent of prospec-tive buyers felt that they had no difficultyjudging the quality or reliability of compet-ing brands.t- A similar study, "The BuyingConsumer: Room Air Conditioners," foundthat 85 percent of all buyers rated the prod-uct information available to them as ade-quate or more than adequate.v' Where infor-mation of this kind is available, a positivecorrelation between price and quality is to beexpected.This relationship breaks down, however,in the more sophisticated experimental stud-ies. Where multiple cues are present for in-ferring quality - brand name, store image,product features, or country of manufacture,

in addition to price - the strong price-quality association of the earlier bivariateresearch weakens or disappears." In thesecircumstances, quality assessment is guidedless by price than by the other variablespresent.Quality and AdvertisingThe theoretical argument for a positive as-sociation between quality and advertisingwas initially developed by Phillip Nelsonr"A more formal modeling was later pursuedby Richard Schmalensee.sv Nelson first in-troduced the distinction between "search"and "experience" goods. The attributes ofthe former can be determined prior to pur-chase, while those of the latter can only belearned after the product has been purchasedand used. The cut and fit of an article ofclothing are examples of product charac-teristics that can be learned through search;the reliability and durability of a major homeappliance are examples of traits that can belearned only through experience. Nelsonthen argued that for experience goods, higherlevels of advertising would be associated


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with higher quality products. Schmalenseehas summarized this argument succinctly:High-quality brands will obtain more repeat pur-chases, ceteris paribus. than low-quality brands.Thus, ... sellers ofhigh-quality brands will spendmore to persuade consumers to try their wares,since ceteris paribus again, the present value of atrial purchase is larger. Nelson contends that thisforce causes better brands to advertise more inequilibrium as long as consumers respond to ad-vertising at all; the level of advertising for experi-ence goods is thus positively correlated withquality, regardless ofwhat individual ads actuallyclaim. Quality information is provided by thelevel of advertising, not the claims it makes."?The evidence on this point is inconclusive.Analysts using both American and Britishdata have found some evidence of a positiverelationship between advertising and prod-uct quality (with quality again measured byConsumer Reports or Consumers' Bulletinrankings), but these results have been under-cut by other studies. Rotfel d and Rozell, afterreviewing the research on this topic, con-cluded that: "Advertised products are ap-parently of better quality than nonadvertisedgoods for some products, when rated by cer-tain criteria, in some years .... But no broadgeneralizations can be made. "48Gilligan and Holmes, who expanded on

the earlier studies by using a variety of dif-ferent measures of both advertising expendi-tures and brand quality, reached a similarconclusion: "A heavily advertised product isjust as likely to be poor quality as anyother. "49 While these studies have involvedboth search and experience goods, the sameconclusions apply if the analysis is limitedto goods in the latter category. Nelson'sclaim that heavy advertising implies su-perior quality is, therefore, not supportedby the available evidence. In fact, in a recentsurvey of consumer attitudes the majority ofrespondents felt that advertised productswere no more likely to be dependable thanwere products without advertising. 50Quality and Market ShareThe relationship between quality and marketshare is likely to depend on how quality is

Fall 1904 35--- ...------

defined. If a high-quality product is one withsuperior performance or a large number offeatures, it will generally be more expensive,and will sell in smaller volumes. But if qual-ity is defined as fitness for use, superioraesthetics, or improved conformance, highquality need not be accompanied by pre-mium prices. In that case, quality and marketshare are likely to be positively correlated.Virtually all empirical work on this topic

has employed the Profit Impact of MarketingStrategies (PIMS) data base.s! All studieshave, therefore, used the same, highly aggre-gated measure of quality. Each company inthe PIMS survey was first asked the follow-ing questions: What was the percentage ofsales of products or services from each busi-ness in each year which were superior tothose of competitors? What was the percent-age of equivalent products? What was thepercentage of inferior products? Quality in-dexes were then compiled for each firm bysubtracting its percentage "inferior" from itspercentage "superior."Using these indexes, analysts have founda strong positive association between qual-

ity and market share. Those businesses inthe PIMS study that improved in quality dur-ing the 1970s increased their market sharefive or six times faster than those that de-clined in quality, and three times as rapidlyas those whose relative quality remained un-changed.s- Cross-sectional studies usingboth bivariate= and multivariate methcds='have confirmed the positive association be-tween quality and market share.Quality and CostTheoretical discussions of the relationshipbetween quality and cost fall into three dis-tinct categories. One group, following theproduct-based approach, argues that qualityand direct cost are positively related. Theimplicit assumption here is that quality dif-ferences reflect variations in performance,features, durability, or other product attri-butes that require more expensive compo-nents or materials, additional labor hours inconstruction, or other commitments of tan-gible resources. This view dominates much


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36 Garvin Product Quality

American thinking on the subject. A sec-ond view, which draws on the operationsmanagement literature, sees quality andcost as inversely related because the costsof improving quality are thought to be lessthan the resulting savings in rework, scrap,and warranty expenses. According to thisview, which is widely held among Japanesemanufacturers and explains much of theirdedication to the goal of "continuous im-provement," quality is synonymous with theabsence of defects, and the costs in questionare quality costS.55Quality costs are defined as any expendi-

ture on manufacturing or service in excess ofthat which would have been incurred if theproduct had been built exactly right the firsttime.56 In their most comprehensive form,these costs would include such hidden ele-ments as the expense of carrying excess rawmaterials and work-in-process inventory toinsure that defective items do not shut downthe production process, as well as the cost ofowning and operating excess capacity inorder to compensate for machine cloggingand downtime. In practice, less inclusivemeasures are usually employed. Total qual-ity costs typically include expenditures inthe following four categorles=" prevention(e.g., quality planning, worker training, andsupplier education); appraisal (e.g., productinspection and testing); internal failures(e.g., rework and scrap); and external failures(e.g., warranty and product liability).A number of analysts have extended this

argument, claiming that improved confor-mance should eventually lead to a reductionin long-term manufacturing costs. 58 One jus-tification for this claim has been the ex-pected link between quality improvementand productivity gains. For example, sim-plified and easy-to-assemble designs shouldrequire fewer workers at the same time thatthey reduce defects. Investments in ma-chinery and equipment should result inmore consistent production as well as im-provements in worker productivity. Qualityimprovements are also expected to lead tofurther savings, in the form of experience-based scale economies, through their impact

on market share and (cumulative) produc-tion levels.59While the evidence is limited, most empir-

ical work suggests that superior confor-mance and total quality costs are inverselyrelated. Garvin, for example, in a study ofthe room air conditioning industry, foundthat Japanese manufacturers, with defectand field failure rates between fifteen andseventy times lower than U.S. competitors,averaged total costs of quality that were 1.3percent of sales.v? The best American com-panies averaged rework, scrap, and warrantycosts that alone were 2.8 percent of sales. Atthe U.S. firms with the poorest quality, thesecosts exceeded 5.B percent of sales. Garvinalso found that quality and productivitywere positively related, even though firmsemployed similar technologies and showedfew differences in capital intensity. In thisindustry, U.S. companies with the highestquality were five times as productive, whenmeasured by units produced per man-hourof assembly-line direct labor, as companieswith the poorest quality.Several surveys have collected more com-

prehensive data on the costs of quality; theseprovide additional support for the above re-lationships. A 1977 survey, for example,found that companies with formal systemsfor assessing quality costs - which mostanalysts associate with superior qualitymanagement and low failure rates'< - hadlower total costs of quality than companieswithout such systems. Companies in theformer group averaged quality costs thatwere 5.8 percent of sales; those in the latter,rework, scrap, and warranty costs that alonewere 7.8 percent of sales.s>Moreover, the amount that companies are

spending to prevent quality problems -and, therefore, to insure lower failure rates- may very well be suboptimal. Gilmorefound that at least one-quarter of the com-panies he surveyed were spending less than5 percent of their quality costs on preven-tion; approximately one-half were spendingless than 10 percent.P His conclusion wasthat greater expenditures on preventionwould result in improved conformance and


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Figure 1 Quali ty and Profitabili ty

I.Market Gains

Improved Performance,Features, Reliabili ty, etc. Improved Reputationfor Quality (due tof - + increased advertising,

etc.)

Increased MarketShure

II. Cost Savings

IncreasedProductivity

Improved Reliabilityor Conformance

Lower Reworkand Scrap Costs

Lower Warrantyand Product'-----.1 Liabi li ty Costs

LowerManufacturingCosts

Lawn!' ServiceCosts

fewer defects; these, in turn, were likely toproduce an overall reduction in the totalcosts of quality because of significant sav-ings in rework, scrap, and warranty.The PIMS data base has generally beenused to examine the relationship betweenquality and direct cost. The results have var-ied considerably by industry. In one study,quality and direct cost were positively re-lated for differentiated-product businessesbut negatively related for homogeneousproducts.s+ In another study, the two werepositively related in capital goods business-esbut negatively related in components andsupplies businesses.s" However, the experi-

Experience-basedScale Economies

ence curve effect, with high quality leudingto high market share, increases in cumula-tive production, and eventually, expnri-ence-based reductions in costs, were foundin all types of businesses.w'The varying results of these studies rnavreflect differences in the definitions or qua l-

ity used by firms in different industries. ThuPIMS quality index is highly aggregated: nodistinction is made among performance. fea-tures, reliability, or the other dimensions orquality discussed earlier, As H result, differ-ent industries could be employing diffurnntdefinitions when assessing the quality oftheir products. This, in turn, would doter-


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38 Product Qualityarvin

mine whether the relationship between qual-ity and direct cost was positive or negative.For example, among homogeneous productbusinesses (e.g., chemicals), quality is oftendefined as "meeting specifications. "67 Sucha conformance-based view of quality is likelyto result in an inverse relationship betweenquality and direct cost. Among differentiatedand capital goods businesses, however, qual-ity is likely to be equated with performanceor features, suggesting a positive associationbetween quality and direct cost. While theseinferences are consistent with the PIMSfindings, they require further research inorder to be verified.Quality and ProfitabilityFigure 1shows two ways in which improvedquality might lead to higher profitability.The first route is through the market: im-provements in performance, features, orother dimensions of quality lead to increasedsales and larger market shares, or alterna-tively, to less elastic demand and higherprices. If the cost of achieving these gains isoutweighed by the increases in contributionreceived by the firm, higher profits will re-sult. 68Quality improvements may also affectprofitability through the cost side. Fewer de-fects or field failures result in lower man-ufacturing and service costs; as long as thesegains exceed any increase in expenditures bythe firm on defect prevention, profitabilitywill improve.Empirical studies using the PIMS data

base confirm the strong positive associationbetween quality and profltability.s? Highquality produces a higher return on invest-ment (ROI) for any given market share:among businesses with less than 12 percentof the market, for example, those with in-ferior product quality averaged an ROI of 4.5percent, those with average product qualityan ROl of 10.4 percent, and those withsuperior product quality an ROI of 17.4 per-cent.?? Quality improvements, by increasingshare, also lead to experience-based costsavings and further gains in profitability. 71The market-based link between quality and

profitability is, therefore, well supported bythe evidence. The second linkage describedin Figure 1is less firmly established. As anearlier discussion has shown, the relation-ship between quality and cost depends onhow the terms are defined. Those studiesthat have equated quality with conformance,and cost with total quality cost, have foundan inverse relationship between the two.They have not, however, carried the analysisa step further to find if profitability was simi-larly affected. Nor have the studies focusingon the connection between quality and di-rect cost taken into account differences ininvestment levels or capital costs, whichwould clearly affect the relationship be-tween quality and ROI.The empirical research on quality, then,has produced mixed results, with few cleardirections for managers. The relationship be-tween quality and such variables as price,advertising, and direct cost is both complexand difficult to predict. Few unambiguousresults are found in the literature. Evenwhere the expected relationships haveemerged, further work is required because ofthe highly aggregated nature of the qualitymeasures that have been employed. This isespecially true of the studies relating qualityto market share and profitability, for theyhave all employed the PIMS data base. Thesefindings suggest a number of directions forfuture research.

Directions for Future ResearchThere is a clear need for more precise mea-sures of product quality. Few studies haverecognized the multiple dimensions of qual-ity, and still fewer, the possibility that qual-ity may have different meanings in differentindustries. Much of the empirical researchon the correlates of quality needs to be repli-cated with these distinctions in mind. Simi-larly, analysts need to determine if the vari-ous dimensions of quality move together orseparately, for otherwise, managers will beunable to position their companies to exploitparticular quality niches.


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These questions suggest two possibleavenues of research. The first would focus onthe determinants of consumer satisfaction,consumer perceptions of quality, and therelative importance of the various dimen-sions of quality in shaping buyer behavior.Andreasen, for example, has found that in-dexes of consumer satisfaction based onvoiced complaints, objective measures ofproduct nonperformance, satisfaction im-mediately after purchase, and satisfactionafter initial problems have been resolved arenot well correlated."? Each apparently mea-sures a slightly different aspect of consumersatisfaction. Similar research is necessary tounderstand the precise connection betweenconsumer satisfaction and the various di-mensions of quality discussed in this article.As Takeuchi and Quelch point out, for manyconsumers "quality is more than [simply]making a good product."73A second possible line of research wouldfocus on manufacturing tradeoff's. Tradition-ally, analysts have argued that manufactur-ing operations could only be effective if theypursued a limited set of objectives.t" Lowcost, high quality, rapid delivery, flexibilityto volume changes, and flexibility to newproduct introductions were thought to bemutually incompatible. Tradeoffs were un-avoidable, and anyone goal could only beachieved at the expense of others.Japanese manufacturers, however, havesucceeded in producing products that meetthe twin objectives of high quality (confor-mance and reliability) and low cost. Theirability to do so has forced analysts to recon-sider the concept of manufacturing tradeoffs,for many traditional assumptions no longerapply.?" This area clearly warrants furtherresearch. Tradeoffs among the various di-mensions of quality and between these di-mensions and the objectives of cost, flexibil-ity, and delivery must be better understood.

Fall 1984 39_-__---- -------- _-_---

Do the different dimensions of quality re-quire different forms of expertise, or arefirms likely to succeed on several dimen-sions at once? Durability, for example, oftenrequires the use of sturdy and oversizedcomponents; does it also guarantee superiorreliability, or is that more a reflection of howthe assembly process is managed? More gen-erally, which of the dimensions of qualityare primarily a reflection of manufacturingskills, and which reflect design and engi-neering expertise? These questions must beanswered if companies are to devise and ex-ecute effective strategies for competing onthe basis of product or service quality.

ConclusionQuality is a complex and multifaceted con-cept. It is also the source of great confusion:managers - particularly those in differentfunctions - frequently fail to communicateprecisely what they mean by the term. Theresult is often endless debate, and an inabil-ity to show real progress on the quality front.This article has identified several differentperspectives on quality, and has emphasizeda number of critical dimensions. These dis-tinctions are more than just theoreticalniceties: they are the key to using quality as acompetitive weapon. Managers must learn tothink carefully about how their approach toquality changes as a product moves from de-sign to market, and must devise ways to cul-tivate these multiple perspectives. Attentionmust be focused on the separate dimensionsof quality; markets must be closely examinedfor any untapped quality niches, and the or-ganization must be tailored to support thedesired focus. Once these approaches havebeen adopted, cost savings, market sharegains, and profitability improvements canhardly be far behind.


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40 Product QualityGarvin

I would like to thank KenGoodpaster, Ted Levitt,John Quelch, members ofthe Production and Opera-tions Management area atthe Harvard BusinessSchool, and an anony-mous referee for theirhelpful comments on anearlier draft of this paper.I would also like to thankthe Division ofResearch atthe Harvard BusinessSchool for its financialsupport.

References1See:W.J.Abernathy, K.B. Clark, and A.M. Kantrow,Industrial Renaissance (New York: Basic Books, 1983);D.A. Garvin, "Quality on the Line," Harvard BusinessReview, September-October 1983, pp. 64--75;D.A. Garvin, "Japanese Quality Management,"ColumbinJournal afWorld Business, in press.J . M. Juran, "Japanese and Western Quality: A Contrast,"Quality Progress, December 1978, pp. 10-18;A. L.Robinson, "Perilous Times for U.S. MicrocircuitMakers," Science, 9 May 1980, pp. 582-586.2See:Barksdale et al., "A Cross-National Survey of ConsumerAttitudes Towards Marketing Practices, Consumerism,and Government Relations," Columbia Journa Iof WorldBusiness, Summer 1982, pp. 71-86;Center for Policy Alternatives, Consumer Durables:Warranties, Service Contracts, and Alternatives(Cambridge, MA: Massachusetts Institute ofTechnology, 1978), pp. 3-127-3-146;"Rising Concern on Cansumer Issues Is Found in HarrisPoll," New York Times, 17 February 1983.3See J . G. Miller, The 1983 Manufacturing FuturesProject: Summary of North American Survey Responses& Preliminary Report (Boston, MA: School ofManagement, Boston University, 1983), p. 14.4See:R.M. Pirsig, Zen and the Art of MotorcycleMaintemmce (New York: Bantam Books, 1974);B. W. Tuchman, "The Decline of Quality," New YorkTimes Magazine, 2 November 1980.5See:S. Buchanen, ed., The Portable Plata (New York: TheViking Press, 1948);G.Dickie,Aesthetics: An Introduction (New York: TheBobbs-Merrill Company, Inc., 1971),p. 5.6See:L.Abbott, Quality and Competition (New York:Columbia University Press, 1955);Z. Griliches, ed., Price Indexes and Quality Change[Cambridge, MA: Harvard University Press, 1971);K. Lancaster, Consumer Demand: A New Approach(New York: Columbia University Press, 1971), p. 122;K.B. Leffler, "Ambiguous Changes in Product Quality,"American Economic Review (December 1982): 956-967.

7See:Abbott (1955), p. 129;K.Lancaster, Variety, Equity, and Efficiency (New York:Columbia University Press, 1979), p. 28.

8See:D.Levhari and T.N. Srinivasan, "Durability ofConsumption Goods: Competition versus Monopoly,"American Economic Review (March 1969): 102-107;R . L.Schmalensee, "Regulation and the Durability ofGoods," Bel l Journal of Economics and ManngelnentScience (Spring 1970): 54-64;P. L.Swan, "Durability ofConsumption Goods,"American Economic Review (December 1970): 884-894;P. L. Swan, "The Durability ofGoods and the RegulationofMonopoly," Bel l Journal of Economics andManagement Science (Autumn 1971): 347-357;T . R . Saving, "Market Organization and ProductQuality," Southern Economic Journal (April 1982): 85G.

9See:C.D.Edwards, "The Meaning of Quality," QuolityProgress, October 1968, pp. 36-39;A.A. Kuehn and R. L.Day, "Strategy of ProductQuality," Harvard Business Review,November-December 1962, pp. 100-110.

10See:Kuehn and Day (November-December 1962);R.M. Johnson, "Market Segmentation: A StrategicManagement Tool," Journal ofMarketing Rese(] rch,February 1971, pp. 13-18;P. Kotler,Marketing Decision Making: AModelBuildingApproach (New York: Holt, Rinehart arrdWinston, 1971), pp. 491-497;B.T. Ratchford, "The New Economic Theory ofConsumer Behavior: An Interpretive Essay," J0UI'll a I o fConsumer Research, September 1975, pp. 65-75.

11See:E. H.Chamberlin, "The Product as an EconomicVariable," Quarterly Journal ofEconomics, February1953, pp. 1-29;R.Dorfman and P. O. Steiner, "Optimal AdvertiSing andOptimal Quality," American Economic Review(December 1954): 822-836;L.J.White, "Quality Variation When Prices AreRegulated," Bell Journal of Economics andManagement Science (Autumn 1972): 425--43 G,


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Product Quality42 Garvin

Administration, 1967), ch. 11;D. R.Lambert, "Price as a Quality Signal: The Tip oftheIceberg," E c o n o m y Inquiry, January 1980, pp. 144-150.35See:W. O. Hagstrom, "Inputs, Outputs, and the Prestige ofAmerican University Science Departments," Sociologyof Education, Fall 1971, pp. 384-385;D. D . Knudsen and T. R.Vaughan, "Quality in GraduateEducation: AReevaluation of the Rankings of SociologyDepartments in the Cartter Report," AmericanSaciologist, February 1969, p. 18.36See Steinway &- Sons (Boston, MA: Harvard BusinessSchool, HBS Case Services #9-682-625,1981)' p. 5.37See P. C.Riesz, "Price-Quality Correlations forPackaged Food Products," Journal ofConsumer Affairs,Winter 1979, p. 234.38See Lambert (January 1980).39See Riesz (1979), p. 244.40See:H. J.Leavitt, "ANote on Some Experimental Findingsabout the Meanings of Price," Journa l of Business, July1954,pp.205-210;A. Gabor and C. W. J . Granger, "Price as an Indicator ofQuality: Report on an Enquiry," Economica, February1966, pp. 43-70;J . D.McConnell, "An Experimental Examination ofthePrice-Quality Relationship," J o u r n a l of Business,October 1968, pp. 439-444.

41See Riesz (1979), p. 236.42See R. A. Westbrook, J . W. Newman, and J . R. Taylor,"Satisfaction/Dissatisfaction in the Purchase DecisionProcess," J o u r n a l of Marketing, October 1978, pp.54-60.43See "The Buying Consumer: Room Air Conditioners," areport by Appliance Manufacturer (Chicago, IL:Cahners Publishing, 1979).

44See Lambert (January 1980).

45See:P. Nelson, "Information and Consumer Behavior,"J o u r n a l of Polit ical Economy (March-April 1970):311-329;P. Nelson, "Advertising as Information," J o u r n a l ofPolitical Economy (July-August 1974): 729-754.

46See R. 1. Schmalensee, "AModel of Advertising andProduct Quality," Journal ofPolit ical Economy (June1978): 485-504.

47Ibid., pp. 485-486.

48See H . J . Rotfeld and K. B . Rotzoll, "Advertising andProduct Quality: Are Heavily Advertised ProductsBetter?" J ou rn al o f Consumer Affairs, September 1976,p.46.

49See C.T. Gilligan and D.E.A. Holmes, "AdvertisingExpenditure and Product Quality," ManagementDecision (Vol. 17, No.5): 392.50See Barksdale et al. (Summer 1902), p. 78.

51See:R. D. Buzzell and F.D. Wiersema, "Modeling Changesin Market Share: A Cross-Sectional Analysis," StrategicManagement Journa l , 1981, pp. 27-42;R. D. Buzzell and F.D. Wiersema, "SuccessfulShare-Building Strategies," H arv ard Business Review,January-February 1981, pp. 1:15-144;C. S. Craig and S.P.Douglas, "Strategic FactorsAssociated with Market and Financial Performance,"Quarterly Review of Economics an d Business, Summer1982, pp.l0l-111;B. T. Gale and B.S.Branch, "Concentration versusMarket Share: Which Determines Performance and WhyDoes It Matter?" The Antitrust Bulletin, Spring 1982,pp.83-105;1.W.Phillips, D.Chang, and R. D. Buzzell, "ProductQuality, CostPosition, and Business Performance: ATest of Some Key Hypotheses," Journal of Marketing,Spring 1983,pp. 26-43;S. Schoeffler, R. D.Buzzell, and D. F. Heany, "Impact ofStrategic Planning on Profit Performance," HarvardBusiness Review, March-April 1974, pp. 137-145.52See Buzzell and Wiersema (January-February 1981), p.140.


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53See:Schoeffler, Buzzell, and Heany (March-April 1974), p.141;Gale and Branch (Spring 1982)' pp. 93-95.54See:Buzzell and Wiersema (1981);Craig and Douglas (Summer 1982);Phillips, Chang, and Buzzell (Spring 198:1).55See:R. E . Cole, "Improving Product Quality throughContinuous Feedback," Management Review, October1983,pp.8-12;Garvi n(in press).56See Campanella and Corcoran (April 1983) p. 17.57See:Campanella and Corcoran (April 1911:l);Crosby (197!l);Gilmore (June 1!l74);H. L.Gilmore, "Consumer Product Quality CostRevisited," Quality Progress, April1!l8:1, pp. zs-as.51 lSee:R.S. Kaplan, "Measuring Manufacturing Performance:A New Challenge for Managerial AccountingResearch," The Accounting Heview (October 1983):686-705;S. C. Wheelwright. "Japan - Where Operations ReallyAre Strategic." Hurvru-d Business Review, July-August1981, pp. 70-71.59See Phillips. Chang, and Buzzell (Spring 198:1).p. 27.

60See Garvin (September-October 1983).61See Crosby (1979).62See "Quality Cost Survey," Quolity. June 1977, pp.20-22.63See:Gilmore (June 1974);Gilmore (April 198:J).

64See Galeand Branch (Spring 1982), pp. 96-97.65See Phillips, Chang, and Buzzell (Spring 1983), pp.:18-39.66Ibid., p. 37.67See M.E . Bader, Prncncul Quolity Mn nugernent in theChemical Process Industry (New York: Marcel Dekker,198:1),ch. 1.68See:Chamberlin (February 1953);Dorfman and Steiner (December 1954).69See:Craig and Douglas (Summer 1982);Phillips, Chang, and Buzzell (Spring 1983);Schoeffler, Buzzell, and Heany (March-April 1974).70See Schoeffler, Buzzel I, end Heany (March-April 1974) ,p.141.

71See:Buzzell and Wiersema (January-February 1981);Phillips, Chang, and Buzzell (Spring 198i!).72See A. R. Andreasen, "A Taxonomy of ConsumerSatisfaction/Dissatisfaction Measures," JOUJ '11 [J I o fConsumer Affairs, Winter 1977, pp. 11-24.73See H . Takeuchi and J . A. Quelch, "Quality Is MoreThan Making a Good Product," Horvnrd BusinessReview, July-August 1983, pp. 139-145.74See:W. Skinner, "Manufacturing - Missing Link inCorporate Strategy," Hnrv!ll'd Business Review, May-June 1969,pp. 136-145;W. Skinner, "The Focused Factory," Harvord BusinessReview, May-June 1974, pp. 1H-121;S.C.Wheelwright, "Reflecting Corporale Strategy inManufacturing Decisions," Business Horizons,February 1978, pp. 57-66.75See Wheelwright (July-August 1981).

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