Quality-Price Conflict Free Essay Example

Exhibit n-5 illustrates a conflict situation that emerged from INPUT’S research. In simple terms this conflict can be summarised as follows:

  • INPUT’s user research indicates that the user community primarily requires quality service.
  • Of the vendors interviewed, 55% expressed an opinion that quality of service was restricted by price or that it could be if pricing is put under any further pressure.

Quality-Price Conflict Case Study

Whilst the above summary may be obvious, as there are likely to be continuing conflicts between price and quaHty, INPUT’S user research indicates that the importance of service quality is rated higher than the importance of price. Overall price attracts an importance rating of 8.0 on a scale of 0 to 10 placing price in seventh or eighth place behind factors that relate to quality. This suggests that quality of service is a more contentious issue with users than price.

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INPUT contends that provided a vendor delivers the quality of service a user expects, the price becomes a much less sensitive issue. Research data indicates that user expectations of quality service are not being achieved in many areas. This is highlighted by the degree of user concerns and worries relative to a number of aspects of service. INPUT research also indicates that only 20% of users fall within the price sensitive category. Seventy percent consider service has a good price/performance ratio.

However, if the quality of service supplied by a vendor is considered to be unsatisfactory, the user may decide to investigate alternative sources. Independent maintenance companies can offer alternatives to vendor service and once the user invites competitive quotations, price can then become an issue.

INPUT recommends that vendors should place priority on quality of service first in terms of providing “value for money”, quality can provide a method of addressing pricing issues. Vendor loss of business is more likely to be due to poor quality than price.

Perhaps applied psychology is a key to understanding. A user complaining about price is more likely concerned about quality or value for money.

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