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Defining and Managing Quality: A Guide for Business Leaders

Defining and Managing Quality: A Guide for Business Leaders

Peter N. Golder, Debanjan Mitra and Christine Moorman

The management of quality is a critical component of business strategy. It is a key force leading to the creation of delighted customers, firm profitability, and the economic growth of nations. Unfortunately, quality is also a complex and multi-faceted concept that is often viewed differently by engineers and marketers. As a result of these disparate views, quality has been an elusive goal and business researchers have largely given up on a general definition and framework for quality. Consistent with this, notorious outside observers have exclaimed “…even though Quality cannot be defined, you know what Quality is!” (Pirsig 1974, p. 260-1).

Our paper tackles these challenges (Golder, Mitra, and Moorman 2012). We build on prior work by merging marketing and engineering perspectives on quality to offer a comprehensive view of quality that bridges these disciplinary perspectives and generates a number of insights for managers. Our view of quality captures how firms and customers produce quality, how firms deliver and customers experience quality, and how customers evaluate quality, all for both products and services. We now highlight the key takeaways from our comprehensive quality framework.


Quality is a Comparative State, not an Absolute State

Quality is always a comparative state—it does not exist on its own. There must be a comparison or reference standard by which performance is judged (Crosby 1979; Deming 1986; Juran 1981). For example, if an airplane cabin temperature is designed to be 72 degrees, the heating and cooling system’s ability to maintain that temperature is one measure of quality. A second measure of quality is to compare the actual temperature with each customer’s ideal temperature preference. The customer who prefers 72 degrees will experience higher quality than customers who prefer either a lower or higher temperature. Finally, a third measure of quality incorporates customers’ ability to perceive the actual temperature delivered by the firm. This ability can be affected by individual and environmental factors, such as a customer’s health, emotional state, clothing choice, surrounding passengers, and the behavior of service providers or the servicescape (Bitner 1992). Thus, the evaluation of the perceived temperature relative to the customer’s temperature ideal may be enhanced or reduced by factors that are independent of the temperature actually being delivered by the firm.

Building on this insight, our framework proposes a novel view of quality as a set of three distinct states of quality that compare an offering’s attributes’ performance relative to comparison standards, which are used or preferred by the firm or its customers. This approach expands the gaps model, which examines a narrower set of differences (Parasuraman, Zeithaml, and Berry 1985).

First State of Quality: An Engineer’s Perspective

The first state of quality is most under the firm’s control. An engineer would describe this state as how well a product performs relative to its design specification. We call this state produced quality. This is the example of actual temperature on an airplane relative to the engineer’s intended temperature. Other examples of produced attribute quality include the gap in a door frame or the response time from ordering food to its delivery at the customer’s table. A product’s overall produced quality aggregates produced attribute quality across all of a product’s attributes. One problem with a firm emphasizing produced quality is that customers may not care about the same attributes that engineers care about.

Second State of Quality: A Marketer’s Perspective

The second state of quality is most outside the control of firms; it resides entirely with customers and marketers must bring this customer perspective into the firm. A marketer might describe this second state of quality as the gap between what the customer perceives and what the customer wants. We call this state evaluated quality. Previous authors have used the term perceived quality to describe this same concept. We prefer the term evaluated quality because customers actually perceive attribute performance, not quality per se. When perceived performance is assessed relative to the customer’s ideal performance, the resulting judgment is the customer’s evaluation of quality. Since each state of quality is a comparative assessment, quality cannot be directly perceived. In the airplane temperature example, this quality state enables us to understand how a temperature of 72 degrees relates to customers’ evaluations of an airline’s quality. Indeed, customers may have very different preferences about an ideal temperature—some might prefer 68 degrees while others prefer 78 degrees.

Third State of Quality: Bridging Engineering and Marketing Perspectives

The third state of quality resides at the transaction point in the marketplace where firms and customers interact. A manager bridging engineering and marketing perspectives could describe this third state of quality as the gap between what a firm delivers and what customers want. We call this state experienced quality. While an experience provides the opportunity for customers to perceive an attribute, they will not necessarily perceive each attribute accurately nor even perceive it at all. Customer characteristics influencing this perception process include emotions, expertise, motivation to use that expertise, and overall range in customer preferences. Product characteristics influencing this perception process include whether an attribute’s performance can be measured objectively using instruments or only by customers’ five senses, the latter of which make the experience harder to calibrate and explain to customers. In the airline temperature example, customers may perceive temperature differently due to their overall health or emotions that day. However, because temperature can be measured objectively, it will be easier for airlines to communicate and convince customers of the actual temperature being delivered.

Implications for Managers

The primary implication of our comprehensive framework is that managers should seek to measure and understand each of the three distinct states of quality. By understanding each state, along with its causes and consequences, actionable implications will result. For example, measuring produced temperature quality, experienced temperature quality, and evaluated temperature quality will help managers determine whether they should increase or decrease temperature specifications, whether they should educate customers so that delivered temperature is perceived accurately, or whether they should attempt to influence customer’s ideal temperature.

Additional implications of our framework touch on the roles of customer emotion and customer co-production. Customers bring their emotions to a consumption experience or emotions result from that experience. Emotion can be evoked by any attribute. Long waits can be frustrating, and attentive care can be heartwarming. While emotion may not be part of the engineer’s view of quality, it has numerous implications for how firms deliver product attributes, how customers perceive attribute performance, and how customers form quality evaluations. Indeed entertainment companies like Disney understand the importance of emotion, but customer emotion plays a role in the consumption of all offerings, and can heavily influence product perceptions and quality evaluations.

When customers join a firm in co-producing a product (e.g., bagging groceries or providing goals to a financial planner), several benefits may ensue. For example, delivered attributes are more likely to approximate what customers want. Also, co-production enables firms to monitor customers’ emotions, which allows managers to adjust produced attributes in real time. This may involve changing the level of an existing attribute (e.g., faster service) or adding new attributes (e.g., free wine with dinner) to accommodate a customer. In our example, providing customers the ability to fine-tune temperature may improve evaluated airline quality.

A final implication of our framework is to provide a better basis for understanding how quality and customer satisfaction are related, yet distinct, constructs. Similar to quality, customer satisfaction is also a comparative assessment. Here, evaluated quality (the second quality state) is compared with the quality that a customer expects. For example, a high quality hotel (room amenities and service closer to customers’ ideal preferences) will lead to much higher customer satisfaction when experienced at a Motel 6 versus a Four Seasons. In our example, the same temperature may produce different effects on customer satisfaction when provided by a low-cost local carrier versus a national airline. Our overall framework can help managers understand why improving product or service attributes often has little or no effect on customer satisfaction. In contrast, our comprehensive quality framework yields 17 concrete strategies to improve customer satisfaction by managing evaluated quality. These strategies reflect the fact that, in some cases, companies are better off investing in managing their customers’ expectations or influencing their emotions. Customers may not always evaluate quality accurately, but firms can influence customers’ judgments of evaluated quality. In fact, of these 17 strategies, only four involve actual changes in product attributes. For example, our framework suggests two mechanisms that explain why Southwest Airlines’ use of humor can increase customer satisfaction. Specifically, activating a positive emotional filter may lead customers to overweight favorable attributes and ignore unfavorable attributes in forming quality evaluations. Also, positive emotions may result in a higher level of social interaction co-produced by passengers and flight attendants. Overall, our comprehensive quality framework can bridge the perspectives of engineers and marketers, help firms improve their customers’ quality evaluations and satisfaction, and generate repeat business for the firm. A win-win-win outcome for sure!

Read the full Journal of Marketing article:
Peter N. Golder, Debanjan Mitra, Christine Moorman (2012), “What Is Quality? An Integrative Framework of Processes and States,” Journal of Marketing, 76 (July), 1-23.

Peter N. Golder is Professor of Marketing, Dartmouth College, USA.

Debanjan Mitra is Voya Financial Chair and Professor of Marketing, University of Connecticut, USA.

Christine Moorman is T. Austin Finch Sr. Professor of Business Administration, Duke University, USA, and Founder and Director, The CMO Survey.