Journal of Business Strategies, Vol.9, No.

2, 2015, pp 99–114

synergic relationship between total Quality

Management and Marketing Management in
creating customer’s Value
Umair Mahmood*, syed sohaib Zubair**
and abdus salam***

The primary purpose of this study is to understand how customer value

is affected by total quality management practices and marketing
management policies of an organization. Total quality management is
a complete managerial approach that if practiced provides ground for
the identification of marketing strategies and processes. This
management philosophy leads organizations towards gaining of
competitive advantage through the proper enforcement of strategically
fit and aligned strategies. However, customer relationship management
plays key role in synergic effect of total quality management practices
and marketing management on customer’s value. This research study
is primarily quantitative in nature. Data has been collected from
different national and multinational companies of manufacturing sector
in Pakistan and the sample size in total is that of 114. The data
collection instrument was developed on the basis of literature and was
found to be statistically reliable where Cronbach’s alpha for all
concepts under study was at least 0.800. In order address the objectives
of this study and test the hypothesis of relationships between variables,
Pearson correlation test was applied on the data set. As a result of
analysis, strongly positive correlation was found between total quality
management, marketing management, customer relationship
management and customer’s value. Hence, it would be fair enough to
conclude total quality management practices provides basic ground to
identify marketing management Policies, strategies and practices.

Key Words: Total Quality Management, Marketing Management, Customer Value, Quantitative,
Customer Satisfaction, Marketing

introduction
In this research study, synergic effect of total quality management (TQM)
practices and marketing management (MM) on customer value (CV) has been
__________________________________________________________________________________
*Institute of Quality and Technology Management, University of the Punjab, Lahore-Pakistan
**Institute of Quality and Technology Management, University of the Punjab, Lahore-Pakistan
***Institute of Quality and Technology Management, University of the Punjab, Lahore-Pakistan

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Mahmood, U., Zubair, S.S. and Salam, A.

discussed. Moreover, the role of customer relationship management (CRM)

system has also been i.e. how does it support total quality management and
marketing management in creating customer’s value. For the purpose of the
study, customer’s value has been analyzed in four dimensions i.e. best quality
products, competitive price, timely delivery, and after sale services. This
research aims to build knowledge and provide practical applications on
synergic relationship of total quality management and marketing management
in creating customer’s value.

Any organizations main and primary focus is satisfaction of its customers and
this idea is a key component in determining organizational performance as well.
Primarily organizations need to define customer’s needs and expectations. These
needs and expectation can be defined by market research and customer feedbacks.
For market research and customer feedback company must possess and practices
an effective customer relationship management system (CRM). This CRM can
only be implemented properly through customer services department. So in order
to achieve customers value organization must focus on customer relationship
management. This research effort also analyzes the moderating effect of customer
relationship management in creating customer value. Once organizations identify
customers need and expectations, the next step is to identify resources for
specifications and features which fulfill customer’s needs and expectations and
this is where all departments’ integrated effort is required.

The word Quality may sum up the requirements of any customer in any sector
of the industry and it’s the idea of Total Quality Management that can assist
organizations in material planning, production planning, quality control, quality
assurance and the related, whereas marketing management techniques may help
organizations to identify competitive price according to product’s features and
quality. Total Quality Management is basically a complete managerial philosophy
(Zubair, 2013)

Synergic relationship of total quality management practices and marketing

management strategies product best quality product which fulfill customers’ needs
and expectations at competitive price with timely delivery. The story must not
end once a sale is completed, post-sale service and customer relationship is key
to surviving and competing organizations in this dynamic environment. For this
purpose organizations design customer relationship management for providing
after sale services that helps in collecting feedback from customers and data of
warranty claims and importantly customer relationship management also helps in
customer retention.

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Research Objectives
The basic idea of this study is to identify the relationship between Total Quality
Management and Marketing Management and how do they create customer value
through the moderating element of customer relationship management. This paper
discusses the contribution of total quality management practices in defining
marketing strategies. Precisely the objectives of this study include:
• To analyze the role of Total Quality Management practices in development
of Marketing Policies and Strategies
• To study synergic relationship between Total Quality Management and
Marketing in Creating Value to the Customers.
• To highlight integrated impact of Marketing and Total Quality Management
practices for achieving total Customer Satisfaction through Customer
Relationship Management

Significance of Research
Review of the literature shows that marketing and total quality management’
synergic relationship has been studies and highlighted in the past and a few
propositions have been developed and presented. This study uses some of the
ideas and propositions presented in the past and tests them using the hypothesis
approach taking data from the manufacturing industry in Pakistan. Moreover, it
is relevant to mention that no such study has been conducted in the business
environment of Pakistan.

Marketing and TQM are synergistic and complementary for efficient

management of value creation and value delivery process. Role of customer
relationship management is very significant in this relationship. If marketing
strategies and polices are not based on total quality management practices then it
will directly affect organizational performance negatively. Hence company will
poorly create and deliver value to customer. Results of this study not only
empirically highlight the relationship between the major concepts under study, but
also gives a snapshot of practices of Pakistan’s manufacturing sector in particular.

Literature review
This section of the study discusses different researches that have been
conducted on the subject being explored. These studies not just help in further
understanding several terms but also guide on development of dimensions,
indicators and then the hypothesis.

Defining Customer Value

Customers want best quality product at competitive price with timely delivery
and after sales services. If company’s product does not fulfill customer’s need or

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expectations he or she will remain unsatisfied. So company must focus on market

research through customer services in order to identify customer’s perception
regarding their products.

Customer’s feedback also results in innovation or changes in product features

or specifications. Next requirement after quality is usually the price. Companies
should consider providing best quality product on competitive price to attract
large number of customers. Main theme of this win-win strategy is to provide best
competitive price which is acceptable for both company and the customer
(Christopher et al., 2002). The next thing that customers look for after quality and
price is the timely delivery of product and service. The practice of focusing only
on sale volume has now become outdated and it is not possible to build strong
customer relationships without providing after sale services (Zeithaml 1988).

Several businesses have developed their customer services centers and hot lines
to provide after sale services (Piercy, 1997). Customer is only convinced when the
person gets some guarantee or after sales services for product against which some
amount is paid. Due to after sale services, companies also get a chance to satisfy
the customer and build strong customer relationships (Prahalad, C.K, 2004).

Customer value is the source of obtaining competitive advantage (Woodruff, 1997;

Prahalad and Ramaswamy, 2004). In today’s customer oriented era, main concern of
both manufacturing and service organizations is on customer value (Gupta et al, 2005).

Ideas like “value creation” and “value delivery” have become known (Slater
and Narver 1994; Webster, 1994; Piercy, 1997). Customer value is the core focus
of both quality and marketing. Customer evaluates utility of the product on what
is given and what was promised (Zeithaml 1988). To gain competitive edge,
company must focus and consider customer value (Webster; 1994).

Similarly relationship value is precedent for relationship quality and

relationship marketing (Ulaga, 2006). Webster (1992) defines value creation and
delivery process as “define value, develop value, deliver value and then
communicate value to the customer”. According to Christopher et al. (2002)
relationship value is defined as chain of determination of value, value creation,
delivery of value to customer and then assessment of value by the organization at
various phases where required.

Role of Total Quality Management in Creating Customers Value

Now-a-days managements consider quality as their most competitive priority
and prerequisite for growth and sustenance. Main objective of today’s firm is quality

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improvement (Corbett et al., 1998). Quality shifts from “products with zero defects”
to “value generation by a continuously improving system in every respect” in order
to satisfy explicit and implicit expectations of all stake holders including customers
(Curry, 2002). To provide best value to customer every individual of firm must pay
attention be committed as whole towards customer satisfaction (Mele, 2006).

According to Sluti (1992), relationship between quality and production is more

significant than direct relationship between quality and business financial
performance. Hence quality practices have mixed results towards organizational
performance. As per research, strong relationship is found between organizational
performance and quality measures (employee satisfaction, customer satisfaction
and employee service quality). Quality has positive effects on operational
performance and due to high operational performance; business performance is
also improved (Maani et al., 1994). Quality management practices are directly
linked with quality performances. So success in different quality dimensions are
associated with proper implementation of different quality management practices.

Structured implementation of quality management systems ensures

competitiveness. Total quality management not only focuses on customer
satisfaction but also provide flattened organizational structure. Generally various
supervision levels reduce effective communication and agility. Thus total quality
management also helps to provide flattened organizational structure to hierarchical
organizations. Due to this effective communication various departments can
quickly react to the need of customers and market (Li et al., 2008).

Moving on, organizational or business performance can be measured by three

levels within organization i.e. business performance, financial performance and
organizational effectiveness (Samson 1999). These levels further can be measured
through return on equities, return on assets and operating income.

Major driver of enhancing business performance is quality management. Most

of the studies provide evidence that quality and its aspects have always considered
as an important competitive strength (Corbett, 1994; Kim, 1995). Quality
dimensions as customer satisfaction, employee satisfaction, and employee service
quality are critical in improving organizational performance (Madhu et al., 1996).

According to US GOA (Govt. Accounting Office Study, 1991), TQM (such as

empowerment, employee training, customer focus, leadership, application of
systematic fact-finding and decision making process) and organizational
performance (such as quality, customer’s satisfaction, productivity, profitability
and employees relations) have very strong relationship.

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Furthermore, significant differences are found in relationship between TQM

and organizational performance when found with or without covariates. Industry
size and type, defect rates, innovation and warranty costs directly effect
relationship between them (Samson and Terziovski, 1999). If TQM is properly
implemented then it positively affects customer satisfaction which enhances
financial performance. However manufacturing firms are leading in effective
deployment of TQM from service organizations, like in operational and cultural
aspects (Yasin et al. 2004). According to Huq (2005) service organizations find
shortcuts for success by identifying those aspects of TQM that apply to service
organizations only. They do not invest money and time on fully fledged TQM.

Role of Marketing Management in Creating Value for Customer

Marketing now has shifted from traditional 4p’s to focus on interactions,
relationships and networks (Gummesson, 2002). Thus focus has moved on value
and customer which was previously limited to firms and products. Customers and
suppliers are considered as co-producers of products, services, value and
experiences. Win-win strategy concludes as stakeholders including customers
achieved satisfaction (Piercy, 1997).

To measure the performance according to marketing perspective marketing

inputs have been studied by Neely (2002). Marketing and TQM are reflected as
complementary business approaches for the enhancement of business (Lai and
Weerakoon, 1998), when these two methods applied collectively in organization
bring improved performance than applied separately (Kee-hung Lai; 2003).
Marketing enhances the effectiveness and efficiency of the organization, it has
the ability to make and retain the customer and the attainment of concentrated
output from the minimum effort. Marketing acts to confirm “doing the right
things” and TQM helps marketing to achieve continuous improvement for “doing
right things” (Kee-hung Lai, T.C. Edwin Cheng; 2003).

Marketing links the external environment with the related functional areas
within the organization (Gummesson; 1991). For effective marketing
implementation the relationship between the organizational function, customers
and organizational network should not be ignored (Webster, 1992).

The marketing orientation of a firm affects positively its organizational

performance, when market orientation is high, it enhances the organizational
performance. Marketing should work with other functions within the organization
to achieve the business excellence and customer satisfaction, and assure (Kee-
hung Lai, T.C. Edwin Cheng; 2003). Few researchers have suggested that
nowadays market oriented culture leads to the superior business performance,

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some researchers reinforced that market orientation culture increase the firms
innovativeness and new product success, and these both together enhance the
organizational performance (Neely, 2002).

Synergic Relation of Total Quality Management with Marketing

Many techniques and practices of total quality management have been
introduced in service sector or in customer services department of manufacturing
firms (Nilsson et al.; 2001). Customer Satisfaction is the common core value
which synthesis marketing, customer services and quality (Bathie and Sarkar;
2002). Several managers think that quality management practices are based on
marketing strategies. Management synthesis quality, marketing and customer
services to create value and total customer satisfaction. Relationship marketing,
market orientation and other conceptual developments in marketing are also due
to contribution of total quality management in marketing (Kee-hung Lai, T.C.
Edwin Cheng; 2003).

Techniques and tools of total quality management enhance efficiency in

marketing techniques implementation, this less practical under the traditional
marketing (Johnson and Chvala, 1996). Quality management practices and
marketing strategies both are designed in order to deliver value and total
satisfaction to the customers (Webster, 1992).

Customer is company’s most essential stake holder and without satisfying him
or her organization cannot survive. Customer’s feedback also results in innovation
or changes in product features or specifications (Kotler, 1999). Marketing is
concern with exchange relationship between customers and organization through
relationship marketing strategies. Customer services and quality are essential
linkages in this relationship.

Today’s challenge is to bring these three critical areas into closer alignment
to create and deliver best value to the customer. In the past these three functions
have been treated as separate and unrelated. As a result, marketing management
has had a hard time to implement marketing strategies. Relationship marketing is
actually the integration of marketing strategies with customer services and quality
practices (Gummesson, 2002). So these concepts are well related and reap
optimal results when integrated and aligned keeping in view the ultimate aim of
the organization.

conceptual Framework and research Methodology

Conceptual Frame work for this research has been developed on the basis of
literature review. Conceptual framework is designed in order to clearly depict

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variables understudy and to explain the relationship among them and identify
proposed hypothesis. Table 1 explains the categorization of variables, Table 2
discusses the development of dimensions and indicators of the key variables and
concepts, whereas figure 1 shows the logical relationship between these variables.

table 1: Variable Details

sr. no. Variables type of Variable
1 Total Quality Management Independent
2 Marketing Management Independent
3 Customer Relationship Management Intervening
4 Customers’ Value Dependent

table 2: Variables, Dimensions and indicators

sr.
Variables Dimensions indicators
no.
• Customer Orientation
Total Quality • Organizational Culture • Continuous Improvement
1
Management • Leadership Commitment • Team Work
• Management By Process
• Market Research
• Segmentation
• Marketing Concepts • Marketing Targets and
Marketing
2
Management
• Marketing Process Strategies
• Relationship Marketing • Marketing Mix
• Relationship with all
stakeholders

Customer • Customers Feedback

3 Relationship • CRM • Customer Relations
Management • Customers Support
• Best Quality Product
• Value Creation
• Competitive Price
Customers’ • Value Delivery
4 • Timely Delivery
Value • Value Communication
• Product Knowledge
• Competitive Advantage
• After Sales Services

Conceptual Framework
In order to test the hypothesis and meet the objectives of the study, following
framework has been developed using the current literature:

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Figure 1: conceptual Framework

Idea Influences by Mele, C. (2007).

As per this framework, Customers’ value will be affected the way total quality
management practices are implemented. Similarly it will also change due to change in
marketing management strategies. Dependent variable i.e. customer’s value also
changes with the change in combined effect of marketing management and total quality
management. I this study, customer services is intervening variable which has
significant effect and linkage between independent variables and dependent variable.

Variables or concepts are subjective in nature so hard to measure directly.

Therefore, dimensions are derived from variables which further help in identification
of objective indicators that lead to development of the data collection instrument.

Further in this diagrammatic demonstration of the framework, research

hypotheses of this research have been shown, the next section now discusses these
research hypotheses:

research hypotheses

h1a: Total Quality Management provides ground for identification of Marketing

Process and Strategies.

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h 0a : Total Quality Management does not provide ground for identification of

Marketing Process and Strategies.

h 1B : Total Quality Management and Marketing Management help in creating

Customer’s Value.

h 0B : Total Quality Management and Marketing Management do not help in

creating Customer’s Value.

h1c: Total Quality Management and Marketing are complementary in creating

Customer’s Value through Customer Relationship Management

h0c: Total Quality Management and Marketing are not complementary in creating
Customer’s Value through Customer Relationship Management

Research Methodology
This research study is quantitative in nature. Quantitative research requires
measurable or numerical data for statistical analysis (C.R. Kothari, 2004). In order to
test the hypotheses, a quantitative approach is more suitable as compared to qualitative.

sampling and sample size

For the purpose of this study companies have been randomly selected from
the manufacturing sector in Pakistan, whereas from within those companies,
employees were conveniently selected for the purpose of data collection. A total
of 148 questionnaires were distributed among respondents, whereas 114 responses
were collected resulting in a response rate of approximately 77%.

Data collection instrument and Data analysis techniques

As mentioned earlier, on the basis of existing literature a questionnaire (on likert scale)
consisting of four key parts had been developed. The questionnaire has been attached as
appendix to this paper. In order to analyze data collected through this instrument, reliability
and correlation tests were applied using the Statistical Package for Social Sciences (SPSS).

Data analysis
Statistical analysis in this study is based on two parts; firstly, the reliability
of the questionnaire has been checked for each of the concepts under analysis,
followed by the main Pearson correlation test for testing of hypotheses.

Reliability Tests
Testing the reliability of the instrument is the foremost step in conducting
analysis of any level. For the purpose of this study, Cronbach’s alpha has been
used as a reference for checking the reliability of items in the questionnaire. Table
No. 3 shows the reliability statistics for all the constructs:

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table no. 3 reliability statistics

Variable no. of items cronbach’s alpha
TQM 8 0.856
MM 9 0.873
CRM 5 0.823
CV 7 0.857
As the aforementioned table shows, cronbach’s alpha value for all variables is above
0.700, it can be concluded that the tool developed for this question is reliable, the data
collected is appropriate for analysis, hence the researchers can proceed for further analysis.
Hypotheses Testing using Correlation Analysis
For the main purpose of this study i.e. to address the objectives, Pearson’s Correlation
test has been applied and the hypotheses have been tested against the standard criteria of
P-value ad Level of Significance (Alpha). Total scores for all the variables were calculated
using transformation command of SPSS before executing correlation tests. As a last step
prior to running the correlation test, another data checking or cleansing technique was
used i.e. Box-Whiskers Plots were plotted to detect any outliers in the dataset as an outlier
can cause type I and type II error (C.R. Kothari, 2004) and the researcher may reject null
hypothesis when it is true or accept null hypothesis when it is false. It was found that no
outliers were detected in the data and finally the main test for analyzing hypotheses was
executed. Following the Box plot, hypotheses have been mentioned and analyzed:

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Hypotheses A
h1a: Total Quality Management provides ground for identification of Marketing
Process and Strategies.
h 0a : Total Quality Management does not provide ground for identification of
Marketing Process and Strategies.

table 4: Pearson correlation (tQM and MM)

TQM MM
Pearson Correlation 1 .745**
TQM Sig. (2-tailed) .000
N 114 114
Pearson Correlation .745** 1
MM Sig. (2-tailed) .000
N 114 114
**. Correlation is significant at the 0.01 level (2-tailed).
As the P-value is less than Alpha for this hypotheses, researchers reject h0a. Hence,
it can be concluded that a relationship exists between TQM and MM and is of strong
nature claiming a value of 0.745 thus it would be appropriate to say that Total Quality
Management provides ground for identification of Marketing Process and Strategies.
Hypotheses B
h 1B : Total Quality Management and Marketing Management help in creating
Customer’s Value.
h 0B : Total Quality Management and Marketing Management do not help in
creating Customer’s Value.
table 5: Pearson correlation (tQM+MM and cV)
TQM + MM CV
Pearson Correlation 1 .841**
TQM + MM Sig. (2-tailed) .000
N 114 114
Pearson Correlation .841** 1
CV Sig. (2-tailed) .000
N 114 114
**. Correlation is significant at the 0.01 level (2-tailed).
Table No. 5 explicitly shows that P-value for this correlation tests is less than
the level of significance i.e. Alpha, therefore the null hypothesis (h 0B ) stands
rejected as per this data. The relationship is hence established and Pearson
correlation coefficient value between TQM+MM and CV is 0.841 which is
definitely statistically of strong nature. To conclude analysis on this hypothesis,
it can be argued that Total Quality Management and Marketing Management
combined, help in creating Customer’s Value for organizations.

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hypotheses c
h1c: Total Quality Management and Marketing are complementary in creating
Customer’s Value through Customer Relationship Management
h0c: Total Quality Management and Marketing are not complementary in creating
Customer’s Value through Customer Relationship Management

table 6: Pearson correlation (tQM+MM and crM*cV)

TQM+MM CRM*CV
Pearson Correlation 1 .865**
TQM+MM Sig. (2-tailed) .000
N 114 114
Pearson Correlation .865** 1
CRM*CV Sig. (2-tailed) .000
N 114 114
**. Correlation is significant at the 0.01 level (2-tailed).
Hypothesis C, basically examines the impact of moderating variable which is
Customer Relationship Management and tells how much effect it has on the
relationship between the synergic value of Total Quality Management, and
Marketing Management and Customer Value. As per the results, it is vivid that
P-value is again less than Alpha so h 0c is declared statistically rejected. The
relation being established, Pearson correlation coefficient between TQM+MM
and CRM*CV is 0.865 which shows both variables have strong correlation and
CRM, which is the moderating variable slightly has increased the strength of
relationship between synergic effect of TQM and MM with CV. To sum up, h1c
i.e. Total Quality Management and Marketing are complementary in creating
customer’s value through customer relationship management holds ground.

conclusions and recommendations

On the basis of analysis of hypotheses conducted in the previous section of
this study, the researchers now draw some key conclusions and suggest some
major recommendations that can be used by practitioners as well as members of
academia particularly those involved in areas like Total Quality Management,
Marketing Management and Customer Services.

Conclusions
In this research study three major hypotheses were developed on the basis if
propositions available in the literature and were tested. First addresses the relation of
total quality management with marketing management. As total quality management
practices are essential and provide sound grounds to identify and design marketing plans,
policies, strategies and process. In this research through Pearson correlation it is proved
that total quality management practices are necessary for marketing management.

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Moving next, the second hypothesis correlates the synergic effect of total quality
management and marketing management with customer’s value. Results of Pearson
correlation test for second hypothesis prove that if total quality management practices
are aligned with marketing policies then it will positively and strongly effect customer’s
value, thus leading to competitive edge and rapid growth in market shares.
Importantly, the third hypothesis examines the moderating effect of customer
relationship management on synergic effect of Total Quality Management and
Marketing Management on Customer Value. According to Pearson correlation
coefficient, the synergic relation positively affects customer’s value which can further
lead to competitive edge resulting in increased customer value. Moreover customer
relationship management system provides the customer needs, expectations and
feedback which are necessary to design total quality management practices and
marketing policies. By using findings and results of this study every manufacturing
sector company either national or multination can implement synergic coordination
between total quality management department, marketing management department
and customer relationship department which will help them in escalating performance.
Recommendations
Researchers have come up with the following recommendations based on the
findings drawn from analysis of the data collected for this study:
This empirical study shows that total quality management practices are essential
and provide ground for marketing plans, policies and strategies. If marketing
policies are not aligned with total quality management practices then company will
be multi directional, diverting the focus of employees and losing customers.
Synchronization of total quality management and marketing management is
necessary to carve out competitive advantage. If both are synergic and
strategically fit in same direction, it is likely that market shares will have boost
and customer retention will be high.

Customer relationship management provides customer’s need and expectations

in terms of customer’s suggestions and feedbacks. When examined empirically,
Pearson correlation coefficient value is 0.841 without CRM and 0.865 with CRM.
Which means customer value is 0.024 times more if company aligns CRM along
with TQM and MM.

Synergic relationship of TQM with marketing and customer relationship

department will create customer’s value and increase customer’s satisfaction.

Customer satisfaction will provide competitive edge and increase in market

share to respective organization.

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