Perspectives on Quality as a Marketing Tool Prepared by Ted J. Schorn Enkei America, Inc. December 8, 2010 2010 AFS Marketing & Selling of Casting Conference December 7-8, 2010 – Hyatt Regency, Schaumburg, IL

Outline • What does “quality” mean in the marketplace? • What quality do we have to sell? • Advantages to selling on quality • Dangers of selling on the basis of quality • Post script: Quality & Certifications 2010 AFS Marketing & Selling of Casting Conference December 7-8, 2010 – Hyatt Regency, Schaumburg, IL

What is quality?

2010 AFS Marketing & Selling of Casting Conference December 7-8, 2010 – Hyatt Regency, Schaumburg, IL

Marketplace Quality • • • • • • • •

Features Benefits Durability Cosmetics Ease of use Style Status/Reputation Price

2010 AFS Marketing & Selling of Casting Conference December 7-8, 2010 – Hyatt Regency, Schaumburg, IL

Translating Marketplace Quality EXTERNAL QUALITY Features

Sales and Service -Responsiveness -Hassle free relationship -Launch protocol

Benefits Style Ease of Use Durability Cosmetics Status/Reputation Price

INTERNAL QUALITY

Engineering Support -Competence -Speed Process Control, Inspection & Workmanship standards, Job instructions Pattern, mold, cores Part and/or mold drawing Finishing

2010 AFS Marketing & Selling of Casting Conference December 7-8, 2010 – Hyatt Regency, Schaumburg, IL

Quality “Quality is conformance to requirements at a cost that preserves our margin.” • This definition is useful because it ‰Allows the measurement of quality • You must define requirements to produce marketplace results

‰Balances the tension between profit and quality 2010 AFS Marketing & Selling of Casting Conference December 7-8, 2010 – Hyatt Regency, Schaumburg, IL

What quality do we have to sell? Sales and marketing determine what our target industry or customer is seeking

We sell: We sell our controls and 1) our Confidence communication 2)system Comfort which makes customers want 3)what Competence

We translate those needs and expectations into specific internal requirements We control the process of melting, casting, design, etc. to consistently deliver what customers want 2010 AFS Marketing & Selling of Casting Conference December 7-8, 2010 – Hyatt Regency, Schaumburg, IL

Advantages of selling on quality • Quality is the “high ground” – Matches what we and our customers want to say about ourselves – Creates its own appeal – Contrasts sharply with the low cost provider

2010 AFS Marketing & Selling of Casting Conference December 7-8, 2010 – Hyatt Regency, Schaumburg, IL

Enkei ads drive home the point that our quality products (360 degrees perfect) are the reason others have success – then further sell that success primarily on the technologically advanced image to others

2010 AFS Marketing & Selling of Casting Conference December 7-8, 2010 – Hyatt Regency, Schaumburg, IL

Advantages of selling on quality • Quality has many aspects to explore, price has only one – Your description of company, processes and products will simply extend quality – Quality can relate to every element of the relationship

2010 AFS Marketing & Selling of Casting Conference December 7-8, 2010 – Hyatt Regency, Schaumburg, IL

Advantages of selling on quality • Quality is a given; lowest price is not – Since good quality (at least) is required already, why not make that the focus – Even the low price competitors must provide quality at the necessary level in the long term 2010 AFS Marketing & Selling of Casting Conference December 7-8, 2010 – Hyatt Regency, Schaumburg, IL

Advantages of selling on quality • Too high quality will drive you out of business – but much slower (and with greater chance of recovery) than too low prices • Quality satisfies customer production, logistics, engineering and purchasing; price only satisfies purchasing – The other groups don’t care about price! 2010 AFS Marketing & Selling of Casting Conference December 7-8, 2010 – Hyatt Regency, Schaumburg, IL

Advantages of selling on quality • Even poor product quality, properly responded to, demonstrates quality in a way that the price guys can not match • If you really deliver quality because you are making it (not just sorting it out) your own cost structure is improved at the same time! • High quality suggests the potential of lower costs, low prices suggest poor quality

2010 AFS Marketing & Selling of Casting Conference December 7-8, 2010 – Hyatt Regency, Schaumburg, IL

Dangers of selling on Quality • Most promise quality, few deliver – They’ve heard it all before – You’ve actually got to impress

• Quality is easily observed and easily harmed by anyone in your organization • Expectations always increase so improvement must be continuous 2010 AFS Marketing & Selling of Casting Conference December 7-8, 2010 – Hyatt Regency, Schaumburg, IL

Dangers of selling on Quality • Many simply expect perfection – Customer education needed – Few deliver it – make the most of the surprise

• Memory of no problems is less than memory of one problem, even long ago • You still have to provide rational prices

2010 AFS Marketing & Selling of Casting Conference December 7-8, 2010 – Hyatt Regency, Schaumburg, IL

Summary: Quality is best

but not easy

• Quality is a long term strategy • Quality requires sales/marketing and the plant to be in harmony • Quality is the best strategy for making money in house • Quality is the most consistent value proposition for everyone 2010 AFS Marketing & Selling of Casting Conference December 7-8, 2010 – Hyatt Regency, Schaumburg, IL

Quality and Certificates • Quality ≠ certificate on the wall • Unfortunately – Paper can be bought and sold – Often is a superficial evaluation – Considered by many as simply a license or administrative hurdle

2010 AFS Marketing & Selling of Casting Conference December 7-8, 2010 – Hyatt Regency, Schaumburg, IL

Quality and Certificates • Customers generally mistrust certificates alone, but – Many still require them as a minimum expectation – In some industries, you are “nothing” without ISO 9001 or higher – Many will verify with their own audit or monitoring system 2010 AFS Marketing & Selling of Casting Conference December 7-8, 2010 – Hyatt Regency, Schaumburg, IL

Best Course of Action • Actually earn your customer-required certificates – Use as a framework for management practice and continuous improvement – Insist on a severe registrar – Get value for your money in implementation

• At least use ISO 9001 and ISO 14001 as the basis for your management system

2010 AFS Marketing & Selling of Casting Conference December 7-8, 2010 – Hyatt Regency, Schaumburg, IL