As a result of Audi’ s new total quality management activities and solutions, the business could now use marketing to emphasize product which is positioned in the established market in terms of quality and superiority over other competing luxury products. Value is therefore created in terms of satisfying the expectations of consumers who purchase these luxury vehicles under the phenomenon of conspicuous consumption in which individuals reflect their sophistication, urbanity and social status through procurement of premium products (O’ Cass and McEwen 2004). Collaborative qualitative methodologies to determine solutions for continuous improvement in product quality created value in the marketing function. TQM is also recognized as being a method of improving cost controls, as this system identifies solutions in many areas of the firm’ s value chain that improve efficiency, productivity and even employee motivation.
For example, a company can conduct a competitor analysis to identify competing for business’ processes and metrics for performance to determine how to align the firm’ s practices against these benchmarks. Technical benchmarking in this methodology might, as one example, identify a new technology that improves production efficiency and longitudinal output capability by a margin of 40 percent.
After conducting an analysis and evaluation of the existing production systems, this firm might realize that making a one-time expenditure to procure this same technology will greatly improve labor, supply and production systems cost by a particular margin. The company, using TQM methodologies, has just ensured significant long-run cost savings. What are the implications, then, in providing extended value in the marketing function to customers as a result of benchmarking practices? By saving costs in production, the company is now equipped to alter pricing to make it more attractive to customers, as part of the marketing mix.
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