This document discusses concepts related to products, quality, and customer satisfaction. It begins by defining a product as the result of a process and noting that products always include an element of service. The document then explores how customer value is co-created through a product's goods and service elements. It also examines how understanding customer needs, expectations, and the customer experience can help companies develop competitive products and satisfy customers.

1. 1
Competitive products and delighted customers
Part one
March 2, 2014
Juhani Anttila
International Academy for Quality (IAQ)
Helsinki, Finland
juhani.anttila@telecon.fi ,
ww.QualityIntegration.biz
These pages are licensed
under the Creative Commons 3.0 License
http://creativecommons.org/licenses/by/3.0
(Mention the origin)

2. 2
xxxx/20.6.2012/jan
Main parts and themes of the presentation:
Part one
1. Extended product concept
2. Product characteristics and quality
3. Needs and expectations and customer satisfaction
Part two
1. Striving for customer satisfaction
2. Technological challenges
3. Product and corporate brands
Aiming at competitive products and delighted
customers in the time of recession

3. 3
Understanding the concept “product”
Product:
”result of a process”
 Normally many processes are involved in producing a product,
and processes may be in different organizations.
 A product includes always service, and may also include goods.
Service (= product)
”result of processes performed at the interface between the supplier and the customer”
 Service is the essential part of all products, or factually all products are composite
products consisting of goods and services.
 There is no justification to use a phraseology ”products and services” or ”products
or services” that factually means “goods and services”.
 Value of goods may only be achieved through using the goods. Hence, also goods
may be seen as service providers.
Services dominate in all products. The value of a product is co-created by both the
supplier and the customer.
4023/12.2.2014/jan (Ref.: ISO 9000)

4. 4
Service is result of processes, Examples
• Tourist service
– Memorable experience
• Restaurant service
– Well-nourished, fullness
• Entertainment service
– Emotional response
• Design service
– Product specifications, prototype
• Training /education service
– Skills, competence
• Financial service
– Loan
• Health care service
– Health, well-being
• Telecom service
– Completed phone call
• Transport service
– Material, people transported
• Maintenance service
– Equipment repaired
• Lawyer service
– Trial supported
• Consulting service
– Development supported
0817/13.2.2013/jan

5. 5
A product consists of goods and services
2321/15.2.2013/jan
Goods
value to
customer
Service
value to
customer
Pure goods
Pure service
100%
100%0%
0%
Product = Result of processes
= Goods + Services
Value provided for the customer is based on
both goods and services. The role of service
is dominant, and especially today increasing.
The goods value may be achieved only by using
the goods. Hence, also goods may be seen as a
type of service provider.

6. 6
1628/3.2.2013/jan
Three elements of a composite product
producing value to the customer
The product is composed of three elements that create value to the customer (“Value
adding channels”):
- G: Goods service: Value from using the goods element
- H: Human service: Value from human services
- A: Automatic service: Value from automatic or mechanical services
H A
G
P
v
u
w
The composite product and its
elements co-create added-value P
to the user with his/her process(es):
P = uH + vA + wG
u, v, and w are contributory portions of
different product elements to the value
Tendency
Each point within the
triangle represents
a particular product.

7. 7
4278/3.2.2014/jan
Historical development in product value creation
Product elements:
- G: Goods service: Value from using the goods
element
- H: Human service: Value from human services
- A: Automatic / mechanical service: Value from
automatic or mechanical services
H A
G
?

8. 8
A product of a software business connection,
A case example
3980/5.1.2013/jan
Business connections and products
in the case:
(1) SW developing company
=> Service developing company
- software engineering service
(2) Service developing company
=> Net service provider
- software integrating service
(3) Net service provider
=> A company using the net service
- software e-Business service
G
H A
Value positioning
the products:
1
2
3
SW developer
Service
developer
Net service
provider
Net service
user
(1) (2) (3)

9. 9
Processes and product in a business connection
2499/15.2.2014/jan
Supplier (Product producer)
Customer (Product recipient)
Supplier’s business processes
and structures
Customer’s business processes
and structures
Business interface
(business interactions and
co-value creation)
Product
(Goods + Service)
Organizations in business connection:
Partner
Organization = person or group of people that has its own functions with
responsibilities, authorities and relationships to achieve its objectives
Process is activity and product its result. Structures support the processes.
Use and perception of product reveal value and satisfaction.

10. 10
What is the product,
and what are the processes involved? (1)
4024/12.2.2013/jan
Essential questions:
1. What is the product, incl.
a) The service, and
b) The goods?
2. How the customer value
is being created, through
a) The value creating
processes, and
b) The structures
supporting the
processes?

11. 11
What is the product,
and what are the processes involved? (2)
4279/12.2.2014/jan
Essential questions:
1. What is the product, incl.
a) The service, and
b) The goods?
2. How the customer value is
being created, through
a) The value creating
processes, and
b) The structures
supporting the
processes?

12. 12
4280/20.1.2014/jan
Obtaining a service
through the cycle of service processes
Start:
Service
enquiry
End:
Service
obtained
Customer
(process) <=>
Service provider
(process)

13. 13
A Win-Win human interaction in customer
connection of business processes
4281/10.3.2014/jan
Rational, non-rational (emotional), and irrational human-to-human interactions with
customers are essential for creating mutually net value.

14. 14
4282/27.3.2014/jan
Customer-responsiveness
Satisfaction
Demanding
Receptive
Irritated
Indecisive
Immediate
action
AppreciationAcceptance
Assurance
clarification

15. 15
A customer-centered organization
Research
Development
Production
Maintenance
and support
Marketing
4283/14.1.2014/jan
Market place
And customers
ManagementBusiness support
Sales
The customer-centeredness is implemented trough business processes, products and
customer interactivities
Delivery
From customer focus or orientation to customer-centeredness.

16. 16
1180/28.10.2008/jan
A system approach for product concept
- a product as a system
Sub-
system
Components
A “core” system
Service
Software
Hardware
Inter-
mediator
(interface)
• Hardware
• Software
• Services
Environment system,
stakeholders:
- People, organizations
- Technical systems
- Nature, structures

17. 17
All products contain strongly knowledge & information
4284/15.1.2014/jan
Knowledge / information is the major element in all products (both in goods and
services) as well as in the business units and business processes.
Knowledge / information can never exist only as such but it has always some kind of
carrier:
- Fact: phenomenon, activity, process
- Data: measurement or data acquisition device
- Information (explicit knowledge): information file or data base, report,
procedure document, publication, book
- Tacit (implicit) knowledge: person, expert, consultant, expert network
or system
- Wisdom: community, mankind

18. 18
0502/25.1.2014/jan
Life cycle phases of a product
Specification phase
Development phase
Manufacturing phase
Operation phase
Disposal phase
Product development and
configuration management
should cover the whole
life cycle of the product.
Customer-relationships
?

19. 19
Life cycle management of products
Development
system
Ver. 1
Ver. 2
Generic
product
type
Termination
management
Instantiation of product individuals
# 1 # 2a
# 2b
# 3
# n
3598/27.12.2008/jan

20. 20
0375/3.2.2013/jan
Quantitative
sufficiency
Dependability
Environmental
compatibility
Reliability
performance
Maintainability
performance
Maintenance support
performance
Ergo-
nomics
Serve-
ability(*) Security Esthetic Ethics
Effective-
ness &
Efficiency
Economy
(*) accessibility + retainability
Ecology
Social per-
formance
General systematic grouping of inherent characteristics
of any product (7E+3S)
The product performance
characteristics may be
designed systematically and
objectively by the product
developer but they are always
perceived comprehensively
and subjectively by the
product user.
All product characteristics
are interlinked with each others

21. 21
0017/30.1.2014/jan
quality (of a product)
- degree to which a set of inherent characteristics (of the product) fulfils requirements
grade (of requirements)
- category or rank given to the different requirements for the products having the same
functional use
customer satisfaction
- customer's perception of the degree to which the customer's requirements have been
fulfilled
Note:
- requirement (generated by an interested party): need or expectation that is
stated, generally implied or obligatory
- interested party: person or group having an interest in the performance or
success of an organization (a product)
(Ref.: ISO 9000)
Quality  Grade (of a product) and satisfaction

22. 22
Performance: the capabilities of an item with its inherent features when observed under
particular conditions
• Quality: degree to which the set of inherent characteristics of the item fulfills the
requirements. Requirements are from interested parties (especially of the customers).
Requirements consist of needs or expectations that are stated, generally implied, or
obligatory. Quality is based on the item user’s/owner’s subjective perception.
• Grade: Grade implies the chosen category or rank of performance relevant to the needs
relevant to the requirements. The grade is closely linked with the realization costs.
• Service level: certain specified performance level of the item. Service level agreement (SLA)
may be a part of contractual agreement.
• Excellence: performance that excels certain challenging references, e.g. being among the
best in the market place.
In addition to quality related concepts, we also have a need for concepts of non-quality,
particularly in the context of product quality:
• Defect – non-fulfillment of the needs and expectations (ref. quality)
• Nonconformity – non-fulfillment of the stated requirement specifications (ref. grade and
service level)
Conceptualizing performance (in a business context)
4010/2.1.2013/jan

23. 23
Safety / Security
2197/25.1.2014/jan
The Maslow hierarchy of needs
- human individuals (and organizations)
Survival
Growth needs
Belonging / Social
Esteem / Ego
Self-
actualization
Basic needs

24. 24
Market / quality strategies (“value disciplines”)
and the technology life cycle of a product
1. The early
market
2. The
chasm 6. End of the life
Product leadership
&
Customer intimacy
Product leadership
&
Operational excellence Operational excellence
&
Customer intimacy
Excellent product
performance only
3. The
bowling
alley
4. The
tornado
5. The main stream market
The quality approach should
be adapted to the appropriate
market strategies.
1969/2.1.2014/jan (Ref.: G. Moore)