Impact of product quality on sales

in pakistan

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 i

introduction
A product which was destined to become the worlds biggest brand, Coca-Cola was first
made in Atlanta, Georgia, on May 8, 1886, when Dr. John Stith Pemberton, a local
pharmacist produced the drink. It was sampled at the local pharmacy and placed on sale
as a soda fountain drink. With an average of nine bottles sold per day in its first year, the
drink soon became popular through advertising it as Delicious and Refreshing, a slogan
that still stands today.

With the outbreak of World War II, instead of Coca-Cola taking a hit, business
boomed. Coca-Cola set out to provide every person in the U.S. armed forces with a bottle
for five cents. This gave a chance for the drink to be sampled in areas that previously
never had a chance to, and more than five billion bottles of Coke were consumed during
the war.

Soon after the countrys independence in 1947, Coca-Cola came to Pakistan in 1953. Like
in every other country where it operates, the Coca-Cola business in Pakistan is a local
business. The beverages are produced locally, providing employment to Pakistani
citizens, and the product range and marketing reflects Pakistani tastes and lifestyle.

After the introduction of Coca-Cola, Fanta was introduced in 1965, Sprite was
introduced in 1972, and after a gap of 30 years, Diet Coke and Fanta Lemon were
introduced in 2001. Currently, Coca-Cola beverages are produced and sold in Pakistan
via the companys own bottling plants which operate under Coca-ColaBeverages
Pakistan Ltd. (CCBPL). A local service office, Coca-Cola Pakistan, focuses on marketing
the Companys brands locally.
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Product qauilty

Consumers across the globe trust The Coca-Cola Company to deliver refreshing, high
quality products. Quality shows itself in our every action; it encompasses everything that
we do. Each person within the Coca-Cola system takes this mission seriously and works
tirelessly to ensure that our system keeps its promise of quality products and services.
For us, quality is more than a measure and more than just what you taste and what you
see. Quality is key in every step during the production of our beverages and the
materials in which they are packaged. We strive to deliver perfect products that are
trusted everywhere. And to do this we are continually reviewing and improving our
internal standards.
We believe that quality is the cornerstone of our success. It is most important to us to
fulfill our promise of quality and ensure the satisfaction of our customers and
consumers every day.

Integrated Quality Management

Pakistan enables the Coca-Cola system to address the changing business landscape
while supporting The Company's strategic growth plans by creating an integrated
quality management program. This program holds our system-wide operations to the
same standards for production and distribution of our beverages.

Pakistan promotes the highest standards in product safety and quality, occupational
safety and health, and environmental standards across the Coca-Cola system by
outlining clear requirements for the policies, specifications and programs that guide our
operations. With endorsement from leadership throughout the Coca-Cola system.
 Integrates business and quality objectives and aligns them with consistent
metrics to monitor performance;

Integrates preventive action as a management tool with more rigorous demands

when introducing new products and services;

Incorporates Hazard Analysis and Critical Control Points (HACCP) into our
system standards;

Manages risk in our Company, bottling operations and across our supply chain;
and

Defines problem-solving methods and tools to drive consistent quality with

improvements.

To stay current with new regulations, industry best practices and marketplace
conditions, we consistently reassess the relevance of our requirements and guidelines
not only in manufacturing, but throughout the supply chain. We refine our
requirements to further ensure that KORE embodies the most recent and stringent
manufacturing processes.

To establish a governance process, each business within the Coca-Cola system

implements, documents and maintains a safety and quality system in accordance with
KORE. Compliance is monitored system-wide to further support the integrity of our
products.

Pursuing the highest standards in product safety and product

quality
Approach

We measure and manage key product and package quality attributes so that our
products meet applicable regulations, TCCC requirements and consumer expectations in
the marketplace. To ensure such consistency and reliability, globally the Coca-
Cola system is governed by the Coca-Cola Operating Requirements.

Pakistan is an integrated quality management system that holds all of our operations to
the same standards of production and distribution. It is the framework of governance
and management system which enables sustainable performance, allows us to meet
customer and consumer demands, and drives continuous improvement.

Pakistan integrates business and quality objectives and aligns them with consistent
metrics for monitoring performance. We keep refining our requirements to ensure that
our management system embodies the most recent and stringent manufacturing
requirements and align to internationally recognized standards in manufacturing and
distribution.

To stay updated with regulations, industry best practices and marketplace conditions,
we periodically reassess the relevance of our requirements and guidelines not only in
manufacturing, but throughout our value chain.

Globally, all business units of TCCC implement and maintain a food safety and quality
management system in accordance with pakistan requirements and compliance to these
requirements are systematically monitored. At every step of production and with
random sample analysis from market place, we keep testing our beverages for quality
and safety attributes. Health and safety impacts of all our products are considered
throughout the product lifecycle stages.

From product development at the R&D stage to the bottling locations, compliance with
the requirements of the Food Safety and Standards Act is ensured at each stage. Our
Quality Systems require all our suppliers to comply with safety, environmental and
quality standards including (as applicable):

For greater level of confidence in the quality of our products and to ensure we are
delivering the best to our consumers, we adhere to a range of global best practices,
standards and guidelines for ensuring consistent product quality and safety. Stringent
checks are undertaken to ensure the quality and safety of all material procured.

3. PRODUCT QUALITY

Performance

Characteristics

Reliability

Matching

Durability

Service level

Product appeal
 Received quality.
Performance: the essential functional traits of the product

Characteristics: secondary traits that complete the main traits

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Modern Management", November 3rd-4th, 2016, BUCHAREST, ROMANIA

Reliability: The chance of an existing flaw in the product in a specific time

Matching: the level of functional characteristics that is compared with the given standards
Durability: How much you can use the product before it depletes.

The level of service that depend on the speed of service provider, efficiency and ease of fixing
the product.

The attractiveness of the product that depend on how the product is presented; texture,
smell, taste

The quality linked with the products reputation

Theoretical framework a. The concept of quality:

Table 1. Shows a number of researchers definitions on the quality concept: Authors Year
Knowledge concept Parasurman 1990 Quality is defined as the interaction between the
customer and the service provider, since the customer sees the service quality through
comparing his expectations of this service with the actual performance.

(Dade) 1994 P.3 Or its the characteristics and specifications of a product or a service that
generates the ability to fill explicit and implied needs Quality is reaching the gap between the
consumers expectations for the products quality and their realization of the actual
performance of that product.

(Parasurman, et.al ) (Tenner) 1995 defines it as an essential working strategy largely

understood in the consumers expectations in and outside whether these expectations are
explicit or implied.

(Evans) 1997 sees quality as the mark for using any product or service that has to meet the
consumers expectations
(Hazer & render ) 2001 Many researchers addressed the concept of quality defined quality
as the overall characteristics of a product (service or a ware) that shows and reflect the
products capacity to fulfill explicit and implied needs

Muhammad Ashioni) 2005 Quality is the constant development of the product the meet
up with the consumer needs with the least costs (Basics on total quality control & total quality
management

(Hoffman, Bateson) 2011, p:4 Quality is a standard of correspondence between the actual
performance of the service with the customers expectations or the difference between the
customers expectations and their realization of the services actual performance.

b. The concept of overall quality management

Table 2. Shows a number of researchers definitions on the quality concept: Authors Year
Knowledge concept

(Lakes & Mahanoy,) 1993 Sees that the overall quality management is a way to improve or
enhance the work flexibility and effectiveness in general, it is the way to arrange and involve
the branches of the organization on the level of both individuals and branches, and all other
levels to evolve them. It is also a way to continue improving the brand and the services offered
for the customer.

Hoffherr 1994 P:3 Overall quality management is an important management philosophy to

make the institution faster and more flexible since this way has a system focusing on directing
the effort of every employee to earn the trust of the consumers, while stressing on the
constant motivation styles to get the customers needs.

(British standards institution. BSI, Dale & Plunked 1995, P:2 ) Its a management
philosophy adopted by all the companys activities to fill the consumer, society needs and their
expectations the goals of the organization is to do things with supreme efficiency and an
effective style to cover the effort of all the workers.

Madu 1995 The success of overall quality management cannot happen without the full
commitment of the top-level management it is also important to take in consideration the
customers satisfaction when determining the concept of quality and its ways.

(Daft ) 2001 Pointed out that quality management is a big change in the thinking of all the
subordinates and managers, it needs a wide range of participation on the level of the
organization in optimizing quality, training employees, involving them in authority.
The Dimensions of overall quality
Many researchers discussed the dimensions of overall quality were classified as follows.

The dimensions of customers service

The dimensions of service quality

The dimensions of data quality

The dimensions of data quality

The dimensions of electronic service

FRAMEWORK AND LITERATURE REVIEW

2.1. Research Framework

This study examines the impact of the perception of the product quality, the perception
of service quality, and the perception of Customer Loyalty Program toward the customer
attitude, and also reviews the effect of customer attitudes on the sale of cement products. The
research model can be seen in Figure 1.

Figure 1: The research model

2.2. Literature Review

2.2.1. Perception of Product Quality and the Relationship with Customer Attitude and Sale
Volume

Boisvert and Ashill (2011) conducted a study on the perception of product quality to
customer attitude, and the result is that there is positive influence of the perception of quality
on the customer attitude. Research by Santoso and Kunto (2014).
 Horvat and Dosen (2013), and Ing Wu and Lie Lo (2007) obtained the same results in
researching the influence of the perception of product quality on the customer attitude.
Aynadis (2014) from the research concluded that the quality of product is the dominant factor
influencing the customer's attitude toward a product.

In the research of Mennecke et al. (2006), Chen and Cheng (2011), Asshidin et al. (2015),
Jaafar et al. (2012), Christiansen (2010), and Sirfaz et al. (2014) proved that there is a significant
influence on the quality of product on the customer attitude. In addition to the research of
product quality perception on the customer attitude, there is another study that examined the
direct relationship between the perception of product quality and the sale volume.

Iranita (2010) in her research obtained the result that there is direct relationship
between the quality of products and sale volume, either simultaneously or partially. Empirically
there are many studies that discuss the quality of the product against both values. The study
has proved that there is positive influence of the product quality to customer attitude and sale
volume, so the hypotheses proposed are as follows:

H1 : Perception of product quality significantly affects the customer attitude

H2 : Perception of product quality significantly affects the sale volume

When COCA COLA came in Pakistan?

In 1950s Coca cola started its operations in Pakistan

In 1996, the coca cola itself took over business operations in
Pakistan & setup its 1st production plant in Karachi.
Now there are 6 production units and
11 distribution units working in Pakistan providing employment to more
than 6000 people.