This document discusses various topics related to achieving competitive products and delighting customers, including: 1. It discusses examining customer needs, satisfaction, and product characteristics to develop products that meet expectations. 2. It also covers linking product development to business processes using quality methods like QFD, and addressing technological challenges. 3. Maintaining consistent and attractive corporate and product brands is also discussed to positively influence customer perception.

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

2. 2
Aiming at competitive products and delighted
customers in the time of recession
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
xxxx/20.6.2012/jan

3. 3
Quality perception
2318/1.10.2013/jan
Indifference
Dissatisfaction
High
High
Satisfaction
Low
Low
The opposite of satisfaction is not dissatisfaction. It is indifference.
The opposite of dissatisfaction is not satisfaction. It is indifference.
Indifference means unimportance, apathy, or lack of care, concern or interest.
You can’t see any difference.

4. 4
Measuring customer satisfaction, A typical case
2070/4.6.2000/jan
(Ref. R Kordupleski)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
Overall satisfaction
Poor Satisfactory Good Excellent

5. 5
Only excellence in customer satisfaction is enough
Customers’
overall satisfaction
20 excellent
60 good
15 satisfactory
5 poor
Total 100 customers
2068/4.6.1999/jan
Lost
customers
1
20
10
5
36 customers
(Ref. R Kordupleski)

6. 6
Experienced dissatisfaction erode the goodwill
reserve
Satisfaction / Dissatisfaction
Experienced
dissatisfaction
Goodwill Badwill
Expectations
exceeded
4285/17.1.2014/jan

7. 7
How can I understand whether
a customer is satisfied or not?
• When asked, the reply is ”Yes”
• Says he is even not asked
• Tells this to his friends
• Buys more of what he is satisfied
• Buys something else, too
Situation consists of a complex mixture of rational, non-rational (emotional)
and irrational human phenomena:
– satisfaction, dissatisfaction, indifference
– confidence, trust
– goodwill / badwill balance
– to buy or not to buy
1199/17.7.2001/jan

8. 8
Buyer’s choice
- negation principle
1. Buyers like choose a product without any risks.
They do that on the basis of their own subjective sentiments and emotions.
They don’t use logical advantage comparisons. (Later they may explain their choice by
rational arguments)
2. They don’t have any wide preference scale, e.g. covering 9 to 10 product characteristics.
3. One can recognize at most 10 characteristics.
A product to be chosen must not include any of the major negations recognized
by the buyer, and it should have at least one clearly good feature.
1181/15.11.2008/jan
(Ref.: S. Rinne, 1989)

9. 9
Custom life cycle
3716/20.1.2014/jan

10. 10
Focus on Customer
Operational performance management
- reactive and rational approach
Complying
stated
requirements
Satisfying
customer
needs
(Ref.: B. Gale: Managing Customer Value)
Strategic performance management
- proactive and creative approach
Excellent
performance of
goods and services
Excellent
customer
value
Effective-ness
1612/23.1.2014/jan
Stated
requirements
Focus of management
Implied needs Market needs Customer value

11. 11
Fishbowl techniques
1. Know the need for
a customer visitation
2090/16.2.2001/jan
(Ref.: Shiba)
5. Analyze
what you observed
3. Observe and see
what is going on
2.
4.

12. 12
Linking product characteristics with customer
preference and satisfaction
Recognized professional approaches:
 Kano model
4025/20.4.2014/jan
A theory of customer satisfaction and product development that identifies product
qualities based on how they affect the customer's perception of the product (Noriaki
Kano 1980)
 QFD (Quality Function deployment)
A method to transform user demands into design quality, to deploy the functions
forming quality, and to deploy methods for achieving the design quality into
subsystems and component parts, and ultimately to specific elements of the
manufacturing process (Yoji Akao 1966)
 Kansei engineering
A method that aims the development or improvement of products and services by
translating customer's psychological feelings and needs into product's design
parameters (Mitsuo Nagamachi in the early 1970’s)
 Lean startup approach
Creative innovations through “minimum viable products”, and “validated learning”
through hypothesis testing for success: (1) Value hypothesis and (2) Growth hypothesis
(Eric Ries 2011)

13. 13
Customer’s satisfaction
0320/11.1.2008/jan
Perceived
satisfaction
Satisfying
factors Must-be
factors
Attractive
factors
Degree of
contents
- +
(Ref.: Prof. N. Kano)
Indifference
Perceived
disssatisfaction

14. 14
Customer satisfaction classification
(for product development / improvement)
Searching for users’’ perception of the different product features:
Product functional per a product
characteristic
0901/14.5.2008/jan
1. I enjoy it that way, or I like it that way
2. It is a basic necessity,or I expect it that way
3. I am neutral
4. I dislike it, but I can live with it that way
5. I dislike it (that way), and can’t accept it
1. I enjoy it that way, or I like it that way
2. It is a basic necessity,or I expect it that way
3. I am neutral
4. I dislike it, but I can live with it that way
5. I dislike it (that way), and can’t accept it
Product dysfunctional per a product
characteristic
(Ref.: Prof. Kano)

15. 15
Evaluation table (Kano methodology)
Product
characteristic
Functional 1. like
0902/14.5.2008/jan
2. must-be
3. neutral
4. live with
5. dislike
Dysfunctional
1. like 2. must-be 3. neutral 4. live with 5. dislike
Q
R
R
R
R
A
I
I
I
R
Customer A: Attractive O: One-dimensional
perception M: must-be Q: Questionable result
dimension: R: reverse I: Indifferent
A
I
I
I
R
A
I
I
I
R
O
M
M
M
Q

16. 16
Tabulation of survey results (Kano methodology)
0903/14.5.2008/jan
Product
characteristic
Functional
1. like
Dysfunctional
1.
like
2.
must-be
3.
neutral
4.
live with
5.
dislike
O
2. must-be
3. neutral
4. live with
5. dislike
Product
characteristic
# 1
functional
Product
characteristic
# 1
dysfunctional
1. I like it that way.
2. It must be that way.
3. I am neutral.
4. I can live with it that way.
5. I dislike it that way.
1. I like it that way.
2. It must be that way.
3. I am neutral.
4. I can live with it that way.
5. I dislike it that way.
Pr.Ch. A M O R Q I I total grade
1.
2.
3.
4.
(1) Questionnaire
(2) Kano Evaluation Table
(3) Tabulation of Surveys

17. 17
Customer-focused product and process development
Customers may be internal or external recipients of the products. Customer-focus is
required in the both cases and relating to all business processes. Developing products to
the needs and expectations of external customers is particularly responsibility of the
product development process.
0307/11.8.2005/jan
VOE: Voice of Engineer,
Engineering view-points and
expressions to the product
Product and process development
VOC: Voice of Customer,
User’s view-points and
expressions to
the product
Marketing
arguments
Competitor
comparison
Priorities
Matching
(Ref.: QFD)

18. 18
From customer’s needs to product specifications
and process plans (QFD methodology)
0599/15.12.2008/jan
Process
indicators
Process
specification
Product
specification
Customer’s
activity
Process control planning
Product
characteristics
Product
specification Customer’s needs
Product development
should be extended to
the design of the other
product related
processes (production,
pricing, selling,
delivering, etc.)
All this development
takes place in the
product development
processes.

19. 19
Kansei / affective engineering
Kansei engineering process:
4286/20.2.2013/jan
KE = Kansei
engineering
Kansei = Needs and
wants (psychological
feelings and needs in
mind)
SD = Semantic
differentials
(Ref.: Mitsuo Nagamachi)

20. 20
Linking customer’s perception with business processes
and structures
Different business situations:
 Products from a single organization:
4027/20.2.2014/jan
- Gaps in the organization‘s business processes impact on the customer‘s perception. The
phenomenon is described by the ServQual model that was developed in the mid-1980s by
Zeithaml, Parasuraman & Berry. We have modified the model for the extended product and
process concepts.
- QFD methodology may also be extended to the business process design.
- “Service design” methodology focus on service process and structure realization.
 Products from business networks and ecosystems:
- Product (and in particular service) is not produced only by one organization’s processes
but by many organizations’ processes operating in a business network or an ecosystem.
Different networks and ecosystems compete with each other. However, one organization has
the commercial relationship with the customer.
 Products from a networked community:
- A customer is an independent and collaborating member of a network. He or she and also
all the other network members produce something to and get something from the other
network members. A network product is a cumulative result from network member’s value
creating interactions with all other members. Network members also get value from the whole
network through the general recognition or privileges of the network.

21. 21
”Gaps” within business activities
0319/15.1.2013/jan
Current
needs
Product needs and expectations
PERCEIVED PRODUCT
(goods and services)
Communication,
market input
Communication,
market output
Former
information
Other
information
Product and
process
development
Product and process
specification
Gext
G1
G6
G2
G4
CUSTOMER
(Ref. Parasuranam et al.)
Product producing, delivering
and receiving processes
SUPPLIER
G3
G5
Challenges for business excellence Strategic business plans
Gint
Customer’s aims and operations
Gmgt
Operations

22. 22
Quality of a network network based on multiple win / win
Quality of a network “v”, Qvm:
“Degree to which a set of inherent
characteristics of the network fulfils
needs and expectations of the involved
network members”:
- Number of members (m) in the network
- Each member gets something useful
(Si) from the other network members but
also loses something (Ai) of its own.
A network “v”
4331/15.3.2014/jan
Network
member i
Network
member j
S
A A
S
i
j
Metcalfe’s Law: A network increases in value as the square of the numbers of its users.

23. 23
Quality in business and society (“Quality diffusion”)
Quality in performance of people, organizations and societies
Quality in products
Goods Services
Operational performance
People Processes Materials, knowledge
Overall organizational performance (Quality management)
Organization culture Management Structure Resources
0245/28.4.2014/jan
Quality awareness in society
Culture Civilization Infrastructure
(Ref. Dr. Seghezzi EOQ ’88 Moskova)
Organizations

24. 24
Linking product quality with the supplier’s business
success, Customer satisfaction index (CSI)
Customer
satisfaction
Index, CSI
Perceived
quality
Perceived
value
Expectations
Complaints
Loyalty
Drivers
CONSEQUENCES: Business success
(+)
(+)
(+)
(+)
(+)
(+)
(-)
(+)
(+/-)
0503/23.2.2013/jan (Ref. A. Westlund 1996)
Results

25. 25
Technological challenges
New technologies have essential impacts on
product characteristics and the effectiveness
and efficiency of the related processes. These
technologies include:
 Information technology
 Biotechnology
 Nano- and microtechnology
 Optical technology
 Energy technology
 Social technology
 Wellbeing technology
 Etc.
4026/2.10.2014/jan
We have been involved with the following
examples of the ICT (information and
Communication technology):
 Radio frequency identification (RFID)
 Robotics
 Ubiquitous information technology,
Internet internet of things (IoT), and
machine-to-machine applications
 Open source information and services
 Mobile payment technology
 Cloud services
 Mashup products.
 “Big data” analyzing and crowd-sourcing
activity
In addition to the impact on quality of products, the new technologies also have challenging
influence that also are strongly related with customer perception e.g. on environmental, social,
safety and security performance, including:
 Environmental protection
 Information security
 Health risks

26. 26
Product brand and its consistency with corporate brand
in market communication
• Brand value:
 The overall value statement to the user
• Brand authority:
 Excellence aspects
• Brand personality:
 Rational brand characteristics
 Emotional brand characteristics
• Brand benefits:
 Concrete value features in use
• Brand service:
 Service provision to the user
2448/15.12.2008/jan
Corporate brand
Consistency
Product brand

27. 27
Attractiveness and consistency
of the corporate and product brands
3549/20.2.2013/jan
Apple
Samsung
iPhone 5
Lumia 920 Galaxy S III 4 G
Nokia