Return on quality—Quality’s Impact on Customer Satisfaction, Revenue Growth, Profitability and Cost efficiency—A Cross National Comparative Analysis of Japanese and American Manufacturers in the Auto Industry

Product quality has been regarded as a key component in a corporation’s marketing strategy, and it is part of the product component (along with the brand name, packaging, etc.) in the marketing mix. Findings from the private corporate sector overwhelmingly support the belief that firms with higher quality have higher customer satisfaction, which in turn leads to better financial performance. However, in marketing, little attention has been given to understanding the impact of quality on the performance of a firm in the manufactured goods sector. Studies in marketing involving quality and satisfaction have mostly been done in the service sector. This study uses data from General Motors, Ford, Chrysler, Toyota, Nissan, and Honda and uses four simple regression equations to test the impact of quality on customer satisfaction, revenue growth, profitability, and cost in the auto industry. The study then tests five hypotheses involving auto companies from Japan and the U.S., and finds that Japanese automakers have higher overall quality than U.S. automakers, which result in higher levels of consumer satisfaction, greater rate of growth in revenue, higher profitability, and an overall lower cost of production.