Page 125 - The Handbook for Quality Management a Complete Guide to Operational Excellence

112 I n t e g r a t e d P l a n n i n g U n d e r s t a n d i n g C u s t o m e r E x p e c t a t i o n s a n d N e e d s 113

tend to attach images to specific brand names, and the reputation for
quality plays a role in the customer’s image. Thus, when companies
wish to appeal to widely divergent customer types they sometimes find
it necessary to set up completely separate entities. For example, Toyota
created Lexus as a separate entity to manufacture and market its luxury
car line.
While segments are often selected based on demographic criteria
(e.g., age, income), this is not the only way to segment customers. Of
particular interest to quality managers is segmentation by product attri-
butes. Quality can be considered a product attribute and marketed
directly to selected customer segments. More often, quality is marketed
indirectly, as is the case with luxury versus economy automobiles. The
quality manager should ensure that the quality requirements of the
customer segment are being met by the product or service offered.
The basis of segmentation is to identify groups of customers with sim-
ilar likes and dislikes. In other words, demographics and other differences
are surrogates for customer preferences. Three broad patterns of prefer-
ences are illustrated in Fig. 6.3.

• Homogeneous preferences indicate a market where all consumers
have roughly the same preferences. There are no natural segments
as far as the two attributes are concerned. We would predict that
competing brands would be similar and located near the center.
• Diffused preferences indicate a market where consumer preferences
vary a great deal. Again, there are no natural segments. The center
of the space minimizes the sum of consumer dissatisfaction.
However, if several competitors exist, we would predict that they
offer dissimilar products to match consumer preferences.

Homogeneous
preferences Diffused preferences Clustered preferences

Quality Quality Quality

Price Price Price
Figure 6.3 Preference segment patterns.

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