If you have quality products, you may be able to differentiate yourself from your competitors by having a unique selling point (USP). This differentiation can lead to higher sales, possibly due to the use of better raw materials or components of higher quality. Higher sales in the long term can create a sustainable competitive advantage over rivals, leading to long-term profitability above average for the industry
Quality products can lead to differentiation
Higher sales
Higher sales due to quality
Creation of sustainable competitive advantage
Sustainable competitive advantage due to quality
Long-term profitability above average for the industry
Quality products can lead to differentiation
Porter's generic strategies can be applied, focusing on differentiation
Importance of quality
You may be able to increase your prices because the product is of higher quality. Consumers may be willing to pay more for higher quality products. This can lead to repeat customers who are likely to buy again, leading to higher brand loyalty. Higher brand loyalty makes consumers less price sensitive, allowing for price increases. More brand loyalty can make the price elasticity of demand more inelastic, leading to higher revenue despite a slight decrease in quantity demanded. Quality may also enable the introduction of pricing strategies such as price skimming
