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The importance of data when looking at quality management

6/26/2019

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The data that organisations gather falls into two main categories. ‘Primary data’ is collected specifically to aid in making a decision, whereas ‘secondary data’ has already been gathered elsewhere for another purpose. 

Obtaining secondary data is often called ‘desk’ research and is likely to be easier than obtaining primary data. Primary data collection is what most people envisage when they think of market research. 

We first consider secondary data, because that is where companies should start - in case the data they need already exists. 

Secondary data 

There are two general sources of secondary data. The first is internal data, for example from your organisation's own records, that is routinely collected. External data, on the other hand, is data collected by other organisations, either for their own use or for sale. An example of this might be the international trade or employment statistics collected by governments. 

Internal data 

Most organisations have some data on performance. Many will also have information on ‘turnover’ - whether the latter is money generated from sales, the number of patients seen, visitor figures, the number of new or repeat customers, or other measures which encapsulate what an organisation does. 

Performance. Most organisations in most sectors have to keep data on performance for accountability purposes. Normally (and increasingly) the data is computerised. At the least, this data enables statutory accounts of financial performance to be drawn up. 

Regulatory regimes, public performance audits and quality assurance systems also require performance data to be kept. 

How readily and quickly available performance data is to different managers varies, but it is an important source of data for market research purposes. However, when data is collected primarily for use by other departments of an organisation, it may not be sufficiently specific or relevant for market research purposes. 

Accounting systems are driven by accounting requirements, and in particular by accounting periods, and will often give an unbalanced picture until year-end procedures are completed. 

Performance figures may be available about individual customers or clients. This can pose the problem of ‘information overload’. There will be so much information, most of it redundant, that in effect it will be useless as a management tool. 

More information is not necessarily better information, if it cannot be used. The Pareto Principle, which states that just 20 per cent of causes can provide 80 per cent of effects, is important here: a small amount of data about major customers or about segments of customers can yield the significant information. 

Organisations keep all sorts of data, either on paper or in their computer systems, ,that can be used as market research information: details of product returns or complaints; staff timesheets or diaries; telephone call logs. There may also be data not held systematically on computers, such as the notes that sales or other front-line staff may keep of meetings and conversations with customers. 

These may record what the customers think of the organisation’s services, of others’ services, and about what the organisation should be doing to provide better value. 

Turnover reports. These can provide data about volume and frequency of customers and transactions. They can be, for example, records of what products or services were sold, to whom and when they were sold, or of how many visits to the doctor were made by various classifications of people, and what they were suffering from and when. 

Next week we will continue to look at important data sources when considering quality...
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Managing customers and quality

6/20/2019

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​This week starts by considering how data, and the information that results from data, are an extension of “listening to customers”. It distinguishes between secondary and primary data, and then between qualitative and quantitative research methods, exploring some of the techniques that can be used to collect data. 

In a conversation you speak and you listen. In market research you listen. Despite some stereotypes, the best salespeople and the most customer-oriented managers make time and effort to listen. 

Amid the urgency and noise of work, many managers lose sight of the all-important requirement to observe and listen to their customers. 

The example below relates a conversation between two guests at a hotel. The hotel manager could have learned a lot if he had been listening to what the guests were saying:

Bob is rejoining Gill in the garden of a hotel at lunchtime. 
Gill: Have you ordered our food? 
Bob: Yes, but if you want to eat in the garden they only serve sandwiches. We need to listen for them to call ‘Table 15’. 
Gill: That’s a shame. I wanted a cooked meal. Why do they only serve sandwiches? 
Bob: They started to explain but it all seemed very complicated. Anyway, I’ve ordered two steak and onion baguettes with salad — they were very reasonable. 
Gill: Drinks were cheap too, for a hotel. 
Bob: Yes, I thought they might have increased their prices since they smartened the place up. 
Gill: Mind you, they’ve still got a lot to do in this garden — look at all those weeds in that bed. And this garden furniture doesn’t match the style of the new conservatory at all. 
Bob: I think I heard her call Table 15 — at least they’re quick! 
Gill: Might mean they’re not freshly made. 
(After the sandwiches have been brought to the table) 
Gill: Well, she seemed to be in a really bad mood! 
Bob: Yes, good thing she brought us the right sandwiches — I didn’t even dare ask for the mustard! 
Gill: Hey, that’s not fair: you’ve got loads of onions and I’ve got almost none. 
Bob: You can have some of mine — but eat up, it’s scarcely warm. 
Gill: Oh no! Those young men heading for the next table look as though they’ve had far too much already. 
Bob: I thought the hotel was trying to lose that sort of clientele now. 
Gill: The language! I'm glad your mother decided not to join us for lunch after all. 
Bob: Shall we finish up and go now? 

In the life of a hotel, one conversation recording the experiences and perceptions of just two customers is not significant. None the less, this one is full of data which could be of interest to the manager, especially if complemented by data about the experiences and perceptions of other customers. 

A long list from a short conversation? Decisions about pricing policy, staff training, portion control procedures, ordering procedures, decor, the resources devoted to gardening and the promotion of the hotel to targeted population segments could flow from this conversation. Such decisions could have a significant impact on the value that customers would attach to their experience of the hotel. 

However, the manager would need more data from more customers (and perhaps past or potential customers) to see if the resulting information presented a coherent and convincing case for any particular decisions. Information from other hotels could also be useful, such as the prices similar hotels charge. 

This example shows some of the key elements of market research: 

  • the gathering of data which in many cases is an extension of the listening process 
  • the conversion of that data into a form which conveys useful information 
  • the use of that information to take action. 

Usually market research will be done to find out specific information to help with particular decisions. To do this it is important to establish what questions need to be asked, of whom, and how they should be phrased. 

Strictly speaking, research into the markets for products and services is known as ‘market research’ and research into marketing practices such as advertising is known as ‘marketing research’, but the terms are often used interchangeably. We will use the term ‘market research’ to cover both aspects. 

Data, information and decisions 

Data is defined simply as raw, undigested facts. An example of data is the number of people using different brands of toothpaste. Information, on the other hand, is data that has been made sense of, generally by combining and comparing it with other data: for example, that peppermint is the most popular flavour of toothpaste sold to adults between the ages of 20 and 40. 

Decisions may follow. For example, a company may decide to launch a new brand of toothpaste taking account of information about population segments, customers’ preferences, competitors' products and much else besides. 

Market research can be considered as an information management process or system, which Dibb et al. (1997) describe in three stages: 

1. the gathering of inputs (data) from internal and external information sources 
2. the processing of the data into information: classifying, storing, indexing and retrieving it (this can be informal as well as formal) 
3. the output of informed decision making.  

Across sectors, market research can lead to decisions that better reflect the customers’ needs, behaviours and desires. For example, “What should our advertisement be saying?” is better expressed by the questions: “What needs do customers have which our service meets, and how do we tell them about our ability to meet their needs?” 
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Internal audiences in a quality management system

6/12/2019

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For an organisation to communicate effectively with its external audiences, it is necessary for it to have effective internal communication. Yet how often do we hear about well-laid plans being ruined by poor internal communication, for example when employees are the last to be told about plans, or when managers fail to listen to those around them?

All the communication principles described earlier apply equally within organisations; indeed, they are an essential part of management. The need for good communication underpins everything that managers do.

In communicating with other members of the organisation, a manager has to exchange ideas, attitudes, values, opinions and information. This may take up most of their time, but without this concern for communication managers achieve little.

Within organisations, communication means more than just sending information. The meaning of the message must be clear, all parties need to understand what is being said, and the sender must be ready to receive feedback and react to it. So managers need to develop these skills.

Some of the reasons for communication within an organisation are:

  • Informing those who need to know, because they are charged with implementing the plans, because they are affected in some way by the plans, or because the manager wants them to react to the plans.
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  • Acting as advocate in order to influence other people to solicit their support.
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  • Instigating dialogue with members of the organisation in order to shape and improve plans, to take account of people's specialist knowledge, or to 'sell' ideas so that plans are accepted.
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  • Developing networks and a sense of belonging to build a more committed, informed and conscientious workforce. People are bound together in a team to which they relate and feel loyalty.
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  • Developing esteem by saying ‘you are important’ and ‘thank you’ to those in the organisation who serve as role models for others to follow. People are proud to belong to organisations which recognise and reward their efforts, and this cannot be achieved without good communication.
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  • Improving performance and ensuring that people feel good about working for the organisation.
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  • Enhancing teamworking, adopting multi-professional approaches and working across boundaries.

These broad aims are channelled - formally and informally - to a variety of audiences.

Formal channels follow the structure of the organisation. As a manager, you need to send messages to subordinates, peers and superiors - downward, horizontal and upward communications. Equally importantly, all these people need to communicate with you, to provide feedback on messages received from you, and to feed through their ideas, opinions and information.

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We have looked at the communication process and the audiences. Next week we will look at the different vehicles that can be used to carry the message.
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External audiences in a Quality Management System

6/5/2019

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Let us think about your organisation’s external audiences. External customers include actual or potential buyers or users of a product or service and a host of other people, groups or organisations who might have an influence on the organisation’s behaviour. Below we list a fairly typical range.

Audiences who might buy from your organisation: 

  • consumers 
  • distributors 
  • government departments 
  • businesses. 

Audiences your organisation might wish to influence: 

  • suppliers 
  • supporters 
  • donors 
  • government 
  • society as a whole 
  • international agencies (e.g. UN, WHO, WTO) 
  • bankers 
  • commentators 
  • competitors 
  • pressure groups, such as environmental groups 
  • the media. 

No doubt you can add to this list from your own experience. Whoever your audiences are, you need to find an appropriate way to inform, influence and communicate with them. 

Some of the messages you send might be saying, “We have something for you”. Your organisation might be launching a new brand or a new aspect of its consultancy service, or perhaps a “new, improved” version of a long-established product. Other messages might be saying, “We are better/more dependable/friendlier/more concerned about the environment than our competitors”. 

Some reasons for communicating with external audiences are: 

  • Increased sales might result from promoting the organisation’s growing portfolio of brands. For example, a company with a reputation for general outdoor wear might develop and promote a new range of specialist wear for adventure and travel. Advertisements can announce this to targeted external audiences who are already aware of the brand. 
  • Enhancing the image of a place, an organisation or a brand should result in customers having a more positive attitude. For an organisation this might lead to an increase in the number of investors. For example, there was a period when some holidaymakers rejected the idea of visiting Spain, since they perceived it as being primarily for holidays by the sea. This changed after advertising campaigns in magazines promoted the cultural richness of cities such as Madrid, with its numerous museums and art galleries.
  • Positioning the brand means the target audience understands what the brand does and what is unique about it. In the UK hotel market, Travelodge is positioned as offering good-quality overnight budget accommodation. Initially, this meant accommodation without some of the extra services that drive up price (for example, no telephone in the room and no room service). By contrast, Forte’s top-range, exclusive international hotels are positioned as being some of the world’s best hotels, offering customised service and unparalleled splendour, and prices to match.
  • Influencing the purchasing habits of customers and trying to make them more brand-loyal so that whenever they but a product or service they return to the same brand or organisation.
  • Providing information is a key factor in all communications. Newspaper and magazine advertisements for cars often provide information to enable comparisons to be made between different models, as well as informing the potential customer of availability. Classified press advertising is a prime source of information, although the way that people interpret the information might not be as the advertiser intended! 
  • Reporting on outcomes: some organisations need to report on outcomes to government departments and interested agencies.
  • Monitoring and auditing activities is a key requirement for a number of organisations, which will produce reports and plans as part of this process. 
  • Customer care, such as the provision of after-sales care, will reassure customers and ensure that they are more likely to buy again or tell others about an organisation's products and services. Communicating the ways in which it cares will therefore help the organisation both directly and indirectly.
  • Reinforcement of the purchasing decisions is also an important role of communications. The advertisement for Range Rover is probably intended to reinforce as much as it is intended to persuade people to buy it.
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