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Improving China Department StoresThrough Total Quality Management

The goods quality and the service quality should be equallymanaged and controlled and well-aimed at creating themost customer value for the target customers.

Second, the total quality management model of the retailer isbased on the value of the customer and present the importanceof special management

Finally, the total quality management model is basedon advice on how to improve the competitiveness ofthe departmental stores in China

THE INTRODUCTION OF TQM

Total quality management (TQM) concept comes from total quality control (TQC)

Was

originated by Feigenbaum (1991) and later launched in other developed industrial countries.

TQM emphasizes the creation of an inner

environment to support innovation, creativity, and risk-taking in meeting the customers’ demands

by all the managers, employees, and customers (Ehigie & McAndrew, 2005).

It is found that

TQM substantially increases customer satisfaction across diverse industrial and cultural settings,

and there is no significant difference in the performance of TQM between manufacturing and

service firms (Prajogo, 2005).

The customer orientation is the most important issue for the quality

management and quality improvement

because customer satisfaction is closely related to the

marketing cost, customer loyalty, word-of-mouth, sustainable sales, and the profit as well; this

is what mainly constitutes the company’s performance.

WHAT’S THE RETAILER’S OFFER AND VALUE CHAIN?

Retailing is a series of business activities that increase the value of the products and services

In China, the retailers refer to the commercial enterprises who mainly sell products and a little service to consumers for their personal use

The retailers’main activities include the provision of a variety of

Goods and services portfolio, the goodspacking, storage, store sales activities, and services.

Therefore, the retailers’ offer to consumersis a mixed package of goods and services with a group of interests and utility, the goods and theservices co-create the customer value.

Customer Value

Customer value is customer-perceived value, the comparison and trade-offs between the customer “get” and customer “give.”

customer value judgment is subjective and heterogeneous, outstanding customer value can lead to customer satisfaction and repurchase behavior

Further to fostering customer loyalty and building the competitive advantage (Parasueama, 1997).

Two-Value Chain Theories and Their Limitations

Porter (1985) proposed the value chain concept through the inspection of the manufacturers

the value chain can decompose the organization into many related strategic activities

Find and help the enterprise to gain a competitive advantage by lower operation cost or better performance of the important strategic activities than its competitors.

Porter’s Value Chain theory can interpret how selling goods creates value for the retailer.

The New Concept: The Retailer Composite Value Chain

The retailer value chain must be different from the Porter’s value chain and the service-profit chain

It should be a composite value chain combining the goods-value chain with the service-value chain

Reconciling competition and the customers, the internal perspective and the external perspective simultaneously.

THE CONSTRUCTION OF THE RETAILER TOTAL QUALITY

MANAGEMENT MODEL

All the retailing formats can learn from this model to carry out a comprehensive quality management

however, different formats have different goods and services in different composition proportions

commodity composition is significantly different, the services provided by the department stores are more, and weight is more.

The Goal of the Retailer Total Quality Management Is to Expand the Customer Value

Is an indicator to judge the competitiveness of a business organization

Produces the customer satisfaction and the customer loyalty; the customer

satisfaction and the market share are equally important indicators to examine the enterprises

competitiveness.

The market share represents the corporate’s past and present achievements,

while customer satisfaction and customer loyalty based on the customer value is the driving

factor of the company’s future competitiveness

The customer value is with subjectivity and heterogeneity, then design the composite value chain for the

specific customers and the relevant differentiation image,

the retailer should ensure the high level

of quality,

The Retailer Total Quality Management Includes Two Parts, the Goods Quality

Management and the Service Quality Management, Respectively

Depends on that the goods-value chain and the services

value chain are both properly managed.

Each chain needs

to be carefully managed so as to create more customer value.

It must be noted that managing the

two chains well simultaneously is not very easy

the

manager should decide how to invest the resources in each chain, and take further action in order

to transfer the most customer value through the final offer

The Service Quality Management Has More Strategic Significance than the

Goods Quality Management

The competitive advantage based on the service-value chain is more persistent and

different.

The core competence of the corporation plays a decisive role in the long-term

development of the company.

Compared with the goods quality

management, the service quality management has more strategic significance.

The Key of Total Quality Management Is How to Define and Combine the Right

Quality Level of the Commodities and the Services in the Product Package

The reason that the product package is able to meet the consumers’ demand is that the quality

level can exceed the expectation.

the retailer product package is an appropriate combination

The higher the comprehensive level

of package quality, the more satisfying it is for the customer

the companies need to consider how to maximize the profits or improve the price competitiveness

when meeting the value requirements of the customers.

CHINA DEPARTMENT STORES’ INSPIRATION FROM THE RETAILER

TOTAL QUALITY MANAGEMENT MODEL

In China, the department store industry has had an important position in the circulation domain

for a very long time (Fung, 2013).

Especially in the planned economy and shortage economy

era

Today, these customers have firm shopping habits in the department’s stores, and they find it psychologically difficult to accept online shopping.

the department stores should study their social characteristics, demand characteristics, and purchasing behaviors, analyze the right goods and services to meet their needs

and adjust the existing products and services

mix portfolio, thus firmly grasping this target group.