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2
= _ _
(D
-E
)
2
E
, (2)
Where, O Observed frequencies; E Expected frequencies.
For questions whose answers were scaled from 1 to 5 or 1 to 7, we followed two
procedures: Kolmogorov-Smirnov normality test (K-S) and Mann-Whitney-Wilcoxon test
(M-W). K-S test was needed to determine if two datasets differ significantly and had the
advantage of making no assumption about the distribution of data.
D =
su
|C() C
()| , (3)
Where, n number of (independent) observations; u
2
+
2
(
2
+1)
2
_
2
=
1
+1
, (4)
Where, U M-W U test; n
1
sample size one; n
2
- sample size two; R
I
- rank of the
sample size.
1
As the primary online database of companies has been used: www.poslovni-adresar.ba
2
If any of the expected cell frequencies of Chi Square test are less then five.
1029
With M-W test we treated differences between the mean ranks, which indicated
statistically significant or insignificant differences between observed categories. K-S test
results are further checked by Shapiro-Wilk (S-W) test.
=
(_
1
()
=1
)
2
_ (
-)
2
=1
, (5)
Where, X
I
ith smallest number in the sample; sample mean is:
=
(
1
++
, (5.1)
The constants a
I
are given by:
(
1
,
) =
-1
(
-1
-1
)
12
, (5.2)
Where, m = (m
1
, , m
n
)
T
and (m
1
, , m
n
) are the expected values of the order statistics
of independent and identically-distributed random variables sampled from the standard
normal distribution, and V is the covariance matrix of those order statistics (Royston,
1983; Villasenor and Estrada, 2009; Tasdan and Sievers, 2009; Drezner, Turel and Zerom,
2010).
In some results presentations we excluded tables or diagrams, but they are
presented in text form: {M-W = X; p = X <> 0.05; Mean-rank IT/DOM = X/X, Median
(Md) IT/DOM = X/X}. In other cases, when it was apposite, we used cross-tabulation to
show answers dynamism for certain categories on two juxtaposed and adjacent questions.
4. Opportunities for sales and quality improvement in BiH
4.1. Research results and discussion about employment supply in region
It has be a few years since world went through the strongest recession. According to some
economists and researches it has been since 2001 that we have enjoyed tough economic
times. Many business people fear a recession or soft economy, reasoning that if the
economy is bad, clients and customers will reduce their projects, stop the consumption, and
even sacrifice quality or buy only from low price suppliers. But when most of the
companies see economic slowdown like a big problem, best and most success companies
recognize opportunity to gain new customers and boost their sales, developing special
marketing and sales methods that will help them in recessionary periods.
Today, companies very often increase the number of sales representatives with
hope that they will help them keeping the earlier sales level and/or improving their
competitive advantage. However this strategy is wrong, or gives results only in short-term
period. There are several reasons why this strategy is wrong: a) the companies are
increasing their costs, although they should decrease them in recession times, b) new sales
representatives need some time to demonstrate their abilities, c) international companies in
Bosnia and Herzegovina are investing more resources in sales team education than
domestic companies. Research we conducted at the state level of Bosnia and Herzegovina)
shows that domestic companies do not invest enough resources in their sales training. For
those companies is characteristic that 67% had never used external and 38% had never
used internal education. Cluster analysis of the summary results shows that more then 1/3
of domestic companies has never used any type of education for their sales team. The
(Table 1) shows results of short survey which was conducted using dates from web sites
that people use in searching employment process.
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1031
The results show the employment supply in four countries when the recession was
an integral part of the market. As we can see for all analyzed countries Commercial sales
job offers are most frequent. This is especially noticeable in Bosnia and Herzegovina,
where approximately 40% of employment supply is related to sales. Increasing the number
of sales representatives without additional sales training is a multiple cost for the company.
At first, these representatives will not be able adequately to respond to all market needs,
and a lack of sales methods and tools will lead to their low motivation and poor
performances. But definitely, the largest loss is the opportunity cost for new sales
representatives. Instead of that, resources should be redirected in rationalization,
improvement and modernization of sales system, which will be more adapted and adjusted
for industrial customers. Also, investments in quality is very good opportunity for
companies to overcome market problems and differentiate themselves from competition.
4.2. Quality as a competitive advantage
Presumably, a rms capability to offer superior product quality is based on its willingness
to change structurally (Bettis, 1994), philosophically (Bounds, York, Adams, Ranney,
1994), transactionally (Bowen & Jones, 1986), or culturally (Cameron, 1994) in order to
enhance its level of customer orientation. We contend that a customer-oriented rm with
superior product quality not only may attain competitive advantage and increased returns
but also may be better capable of buffering itself against the threat of rivalries and
macroeconomic forces (Kroll & Wright, 1999).
Costumer needs are constantly growing and companies need to be able to handle
the demands of the modern era. The company's strategy in future will not be based solely
on the production of cheap and quality products and services then the competition, but a
better understanding of the global market. That means the struggling with the competition
and gaining new markets with the products that will offer different new values, best quality
and will satisfy unique and individual requirements. Because of this, companies need to
continually improve their quality. Gone are the days when the ISO standard was sufficient
indication of quality. Today, many competitors own ISO 9001:2000 certification, so
companies are obligated to seek new ways for differentiation. When we talk about quality,
modern differentiation is reflected in some new methods such as Kobayashis 20 keys, Six
Sigma or Lean Management. Further in this paper we will present ISO 9001:2000
Standard, but other new methods will be also discussed.
4.2.1. Quality management system (ISO 9001:2000) and competitiveness
Every company would like to improve the way it operates, whether that means increasing
market share, cutting costs, managing risk more effectively or improving customer
satisfaction. ISO 9000 has become a favored system for many organizations embarking on
quality improvement. ISO 9001:2000 is an information-sharing tool that an organization
can use to gain the knowledge needed to enhance quality and performance. It also provides
a ready framework for ordering and structuring an organizations knowledge (Lin, C. &
Wu, C. 2005:657). ISO 9001:2000 specifies requirements for a quality management system
where an organization (a) needs to demonstrate its ability to consistently provide product
that meets customer and applicable regulatory requirements, and (b) aims to enhance
customer satisfaction through the effective application of the system, including processes
for continual improvement of the system and the assurance of conformity to customer and
applicable regulatory requirements (Zhou, M. 2011:19). Below, we will present two short
studies about ISO 9001:2000 Standard that will help us to understand its importance level.
1032
Table 2: Intensity of ISO 9001:2000 Standards by country (2008)
ote: Values of GDP are taken from CIA web page and converted to BAM using exchange rate
1USD=1,328599BAM (Currency exchange as at 01.01.2008. from Central Bank of Bosnia and
Herzegovina). Quantities of ISO are taken for ISO survey for 2008 available on web site www.iso.org.
Intensity, rank and GDP % are calculated by authors.
Sources:
http://www.iso.org/iso/survey2009.pdf;
http://www.iso.org/iso/survey2008.pdf;
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html
http://www.cbbh.ba/index.php?id=4&year=2008&ex_rate=001.
*
(32)
R
A
N
K
**
(27)
R
A
N
K
***
(28)
R
A
N
K
****
(6)
R
A
N
K
1 Austria
553.522,24 2,25 4.272 0,4660 26 0,4665 21 0,4660 22
2 Belgium
673.222,37 2,73 4.875 0,4373 27 0,4377 22 0,4372 23
3 BiH
24.580,41 0,10 811 1,9923 6 1,9922 6 1,5966 1
4 Bulgaria
68.853,31 0,28 5.323 4,6682 1 4,6726 1 4,6680 1
5 Croatia
92.082,54 0,37 2.302 1,5096 13 1,2097 5
6 Cyprus
33.800,89 0,14 555 0,9915 16 0,9924 11 0,9914 12
7 CzechRep.
287.095,63 1,17 10.089 2,1220 5 2,1240 5 2,1219 5
8 Denmark
453.672,71 1,84 1.574 0,2095 31 0,2097 26 0,2095 27
9 Estonia
31.493,11 0,13 691 1,3249 15 1,3262 10 1,3248 11
10 Finland
361.048,11 1,47 1.975 0,3303 30 0,3306 25 0,3303 26
11 France
3.806.727,10 15,46 23.837 0,3781 29 0,3785 24 0,3781 25
12 Germany
4.851.575,88 19,71 48.324 0,6015 24 0,6020 19 0,6014 20
13 Greece
463.247,93 1,88 6.747 0,8795 19 0,8803 14 0,8794 15
14 Hungary
208.207,41 0,85 10.187 2,9544 2 2,9572 2 2,9542 2
15 Ireland
351.935,25 1,43 2.237 0,3838 28 0,3842 23 0,3838 24
16 Italy
3.065.472,49 12,45 118.309 2,3305 4 2,3327 4 2,3303 4
17 Latvia
44.994,33 0,18 500 0,6710 23 0,6716 18 0,6710 19
18 Lithuania
62.838,75 0,26 815 0,7832 20 0,7839 15 0,7831 16
19 Luxembourg
77.507,81 0,31 246 0,1917 32 0,1918 27 0,1916 28
20 Macedonia
12.163,32 0,05 271 1,3454 14 1,0782 6
21 Malta
11.544,20 0,05 355 1,8569 9 1,8586 7 1,8568 8
22 Montenegro
6.033,17 0,02 160 1,6014 12 1,2833 4
23 Netherlands
1.165.811,08 4,74 13.597 0,7043 21 0,7049 16 0,7042 17
24 Poland
703.361,64 2,86 10.965 0,9413 17 0,9422 12 0,9413 13
25 Portugal
336.357,42 1,37 5.128 0,9206 18 0,9215 13 0,9205 14
26 Romania
271.484,59 1,10 10.737 2,3881 3 2,3904 3 2,3880 3
27 Serbia
64.880,80 0,26 2.091 1,9461 8 1,5596 2
28 Slovakia
126.143,83 0,51 3.476 1,6639 10 1,6655 8 1,6638 9
29 Slovenia
72.942,74 0,30 1.945 1,6101 11 1,6116 9 1,6100 10 1,2903 3
30 Spain
2.127.629,07 8,64 68.730 1,9506 7 1,9525 6 1,9505 7
31 Sweden
645.910,36 2,62 5.377 0,5027 25 0,5032 20 0,5026 21
32 UK
3.559.333,99 14,46 41.150 0,6981 22 0,6988 17 0,6981 18
SUM SUM SUM AVG
* 24.615.474 100,00 407.651 1,2923
** 24.415.734 99,19 403.961 1,2219
*** 24.440.315 99,29 404.772 1,2482
**** 272.683 1,11 5.635 1,3363
Al l countri es(32)
EuropeanUni on(27)
EuropeanUni on+Bi H(28)
Ex-Yugosl avi anCountries(6)
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1034
Exponential growth of ISO 9001:2000 Standard is caused by:
1. Government's efforts to promote its policies and active role in the economy,
2. Customer requirements,
3. Companies' wish to be competitive on the market.
However, after some time, many companies do not express an interest in certification,
because the perceived level of competitive advantage achieved through certificates
disappears. Today it is considered that the value of certificates is inversely proportional to
the number of issued certificates. Using the formula (1) we calculated intensity level by
country and as we can see on the (Table 2). Bosnia and Herzegovina (1.9923) ranks sixth
place of intensity of ISO 9001:2000 Standards, among countries of Europe, right after
Bulgaria (4.6682); Hungary (2.9544); Romania (2.3881); Italy (2.3305) and Czech
Republic (2.1220). The intensity was calculate in a manner that represents the quotient of
two ratios: for dividend we have ratio between number of ISO 9001: 2000 Standards for
one country and GDP of that country, and for divisor we have ratio between number of
ISO Standards 9001:2000 in some particularly zone and GDP of that zone. Among ex-
Yugoslavian countries best result has Bosnia and Herzegovina (1.5966), and after that
Serbia (1.5596); Slovenia (1.2903); Montenegro (1.2833); Croatia (1.2097), and
Macedonia (1.0782). Considering that the GDP of Bosnia and Herzegovina is one of four
lowest among 32 countries (lower GDP only in Montenegro, Macedonia and Malta), the
sixth place among European and first among ex-Yugoslavian countries is very good result.
When we talk about world share of ISO 9001:2000 Standards (Table 3), we can see
that Europe has the best average regional share in last sixteen years (57.4%), with average
annual growth of (19.1%). Taking into consideration all 178 countries that are included
into research average annual growth is (23.3%) and on the end of 2009 we had more than
one million certificated issued. From those results it is obvious that world reached its
saturation point, and possibility that some company achieves competitive advantage only
using ISO 9001:2000 Standard does not exist anymore. For this reason the efforts of
companies, at least for quality, should be directed to the other side. Below, we present the
possibilities that company can use to upgrade and improve its system of quality control,
like new opportunity for differentiation.
4.2.2. Kobayashis 20 Keys
The 20 Keys were developed more than 12 years ago by Professor Iwao Kobayashi of
the Practical Program of Renewal in Factories Institute in Japan. The approach has been
implemented in several hundred Japanese companies and has spread to the South Africa.
This approach offers a way to look at the strength of organizations and to systematically
improve it, one step at a time, by focusing on 20 different but interrelated aspects
(Petrarolo, D. 1998:22). Kobayashi says: Managers need to determine to what degree
their companies can rapidly respond to change, and to regard such responsiveness as a
standard for evaluating corporate strength. To have such a standard, they must have a
specific means of evaluation and specific items that can be improved. Managers cannot
make their companies stronger unless they know how to improve items that assessment
shows require improvement. The 20 Keys system is designed to help companies
significantly improve their efficiency. The main objective of the program is to identify and
eliminate any type of activity which is not adding value. There are four pillar keys: (1)
Cleaning and Organizing; (2) Rationalizing the System/MBOs; (3) Improvement Team
1035
Activities and (4) Leading Technology and Site Technology. These keys enhance growth
and development of other 16 keys. All keys are presented in (Table 4).
Table 4: Kobayashis 20 keys and aims
Aim 20 keys
Energized
workplace
K1 Cleaning and Organizing
K2 Rationalizing the System/MBOs
K3 Improvement Team Activities
K4 Time Control and Commitment
Quality improvement
K5 Zero Monitor Manufacturing
K6 Maintaining Equipment
K7 Quality Assurance System
K8 Developing Your Suppliers
K9 Skill Versatility and Cross Training
Cost reducing (higher
productivity)
K10 Eliminating Waste (Treasure Map)
K11 Empowering Workers to Make Improvements
K12 Manufacturing Value Analysis (Methods Improvement)
K13 Efficiency Control
K14 Conserving Energy and Materials
Current processes
improvement /
Reducing inventory /
Faster delivery
K15 Quick Changeover Technology
K16 Reducing Inventory (Shortening Lead Times)
K17 Production Scheduling
K18 Coupled Manufacturing
Technological
development
K19 Using Information Systems
K20 Leading Technology and Site Technology
ote: table is adapted by authors
Source: Prironik za svetovalce 20 kljuev. 2000. Interno gradivo GOSTOL-TST. Ljubljana: Delotte &
Touche, p. 22 and Jug, K. 2004. p. 18.
As we can see on (Table 4), the keys work in different areas and have a multiple
effects. Thus, some groups of keys increase motivation, some increase quality, while others
reduce costs, but all of them are focused on three main objectives (faster, better and
cheaper).
3
Figure 2: The correct way of method development (harmony model)
ote: figure is adapted by authors
Source: Koch, A. n.d. 20 Keys of Iwao Kobayashi-San. http://www.makigami.info/cms/20-keys-kobayashi.
Accessed: 8th December 2011
3
Faster Improvement of lead time through lean manufacturing and lean process work; Better
Improvement of quality through prevention of errors; Cheaper Optimization of cost through improvement
of productivity and waste reduction.
1036
A very important learning from Kobayashi's approach is to keep as much as
possible balance among the development of the keys and he states we should not develop
one key without keeping track of the others. (Figure 2) shows us how company need to
develop all keys, while on the other hand (Figure 3) shows us the wrong approach.
Figure 3: The incorrect way of method development
ote: figure is adapted by authors
Source: Koch, A. n.d. 20 Keys of Iwao Kobayashi-San. http://www.makigami.info/cms/20-keys-kobayashi.
Accessed: 8th December 2011
This approach is focused on continuous and sustained improvements and
development. The main idea is that many small steps are much better than a few large.
Improvements are introduced in small doses, and will thus be easier for all employees to
adapt. Author of this approach indicates that improvements are visible and come quickly,
and after six months results will be permanent. One of the best advantages of this approach
is that there is always something to improve at all levels at any time. If you increase some
key, there are some other keys that need to be increased too. Proera, professional education
and management consulting company from Moldova
4
, presents this approach like a
revolutionary program for enterprise transformation with those key advantages: a.
implement best practices to achieve world class, operational excellence; b. achieve the
strategic goals of the business; c. identify and eliminate all forms of waste (non value-
adding activities) to improve customer satisfaction and market share; d. energize and
motivate all employees to work towards the achievement of goals; e. improve productivity,
profitability and the long-term sustainable competitiveness of the business.
Like any methodology, this method is adapted to the needs of the organization. For
organizations that seek world-class quality and preservation of competitive position, this
method is one of the best solutions. It is important to note that in Bosnia and Herzegovina
this method is not popular yet, and it can be implemented only by using services of
Deloitte consulting company.
Research that was provide on the territory of Bosnia and Herzegovina do not
include implementation of any particularly method or approach which is mentioned, or will
be mentioned in the work, while it was focused on participation of quality issue among
companies. But we will see that some questions are directly related to few parts of some
approaches. At the beginning we tried to determine which of the two marketing mix
elements (price and quality) is more important for companies. For quality we have: M-W =
159.000, p<0.05; Mean-rank 'INT' = 26.55; Mean-rank 'DOM' = 19.33). For price: (M-W =
169.500, p<0.05; Mean-rank 'INT' = 18.98; Mean-rank 'DOM' = 24.44). The medians for
the first claim are: (Md'INT' = 5; Md'DOM' = 4), while for the second (Md'INT' = 1;
4
For more information see: http://proera.md/consulting/consulting_services/20keys/index.html
Md'DOM' = 3). From those results it is obvious, and statistically significant difference
proves, that international companies are much more focus on the quality, and at the same
time domestic companies are oriented to price reduction. Domestic companies perhaps
consider that cost leadership strategy will lead them to business success and help them to
attract new customers. It is important to notice that 29% of domestic companies believe
that they can have the best quality and the lowest price at the same time. This is the case
with only 5% of international companies.
15% of international companies believe
purchasing process. An even better indicator (Diagram 1), which tells
dominance of international companies, is that 30% of international and only 4% of
domestic companies consider that their customers do not pay attention to the price when
they are making purchase.
Diagram 1: Does the companies believe that the price has a crucial importance during the
customer purchase?
Source: authors' calculation
One of the Kobayashis pillar keys, with aim to energize workplace, is
Improvement of team activities. This key can be identified in s
that we explored how much companies invest re
Diagram 2: The frequencies of external and internal education
Source: authors' calculation
0%
20%
40%
60%
has a crucial
importance
15%
International companies
1
5
%
0
%
0
%
1
0
%
6
7
%
4
%
3
8
%
1
7
%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Without
education
Once in
several years
International companies (External)
Domestic companies (External)
1037
ose results it is obvious, and statistically significant difference
proves, that international companies are much more focus on the quality, and at the same
time domestic companies are oriented to price reduction. Domestic companies perhaps
cost leadership strategy will lead them to business success and help them to
attract new customers. It is important to notice that 29% of domestic companies believe
that they can have the best quality and the lowest price at the same time. This is the case
with only 5% of international companies. On the other hand 38% of domestic and only
15% of international companies believe that price has a crucial importance in customers
An even better indicator (Diagram 1), which tells
dominance of international companies, is that 30% of international and only 4% of
domestic companies consider that their customers do not pay attention to the price when
companies believe that the price has a crucial importance during the
One of the Kobayashis pillar keys, with aim to energize workplace, is
Improvement of team activities. This key can be identified in sales process too. Because of
that we explored how much companies invest resources in sales education (Diagram 2).
The frequencies of external and internal education
has a crucial
importance
very important
but not decisive
not important
for their
customers
15%
55%
30%
38%
58%
4%
International companies Domestic companies
2
0
%
4
5
%
1
5
%
5
%
5
%
3
0
%
2
0
%
3
0
%
2
1
%
8
%
0
%
0
%
1
7
%
8
%
2
1
%
0
%
several years
Once a year Once every
half year
Once a
month
Once every
fifteen days
International companies (External) International companies (Internal)
Domestic companies (External) Domestic companies (Internal)
ose results it is obvious, and statistically significant difference
proves, that international companies are much more focus on the quality, and at the same
time domestic companies are oriented to price reduction. Domestic companies perhaps
cost leadership strategy will lead them to business success and help them to
attract new customers. It is important to notice that 29% of domestic companies believe
that they can have the best quality and the lowest price at the same time. This is the case
On the other hand 38% of domestic and only
that price has a crucial importance in customers
An even better indicator (Diagram 1), which tells us about the
dominance of international companies, is that 30% of international and only 4% of
domestic companies consider that their customers do not pay attention to the price when
companies believe that the price has a crucial importance during the
One of the Kobayashis pillar keys, with aim to energize workplace, is
ales process too. Because of
(Diagram 2).
0
%
5
%
0
%
0
%
0
%
Once every
fifteen days
Once every
seven days
International companies (Internal)
Domestic companies (Internal)
1038
According to the results present in (Diagram 2), it can be seen that international
companies often prefer external and internal education once every half year and internal
education once in fifteen days. Only 15% of international companies do not prefer any type
of education. For domestic companies is characteristic that two thirds had never use
external and 38% had never used internal education.
4.2.3. Six Sigma in sales
Six Sigma is a scientific, systematic and statistical approach to business process
improvement and is considered to be an important business strategy. It was developed by
company Motorola in 1980s as a methodology to improve manufacturing and quasi-
manufacturing processes and settings (Nakhai & Naves, 2009). The main goal of this
approach is to cut costs and boost productivity, while provides continuous improvement
that every company need in todays turbulent environment. If company want to achieve Six
Sigma that requires transformation of business processes and organizational discipline. Six
Sigma goes light years beyond systems selling (the notion of providing clients with
integrated solutions) and even beyond simple consultative selling. It entails an
organizational symbiosis between a company and its customers, lining up the two
organizations' processes (Niemes, J. 1999:39). The same author emphasizes five steps in
implementing Six Sigma in a sales organization:
1. Think process how some organization currently operates how it serves clients
and how many business functions need to interact with one other.
2. Forget about silos and stovepipes - implementing Six Sigma principles requires a
strong team effort inside the organization.
3. Develop a passion for measuring how well the company is performing - Six
Sigma is about comparing a company's process outputs to the needs of its
customers.
4. Invest in training and coaching at all levels - putting Six Sigma principles in place
in any organization requires a significant amount of time and organizational
resources. Therefore, employee training, coaching, and mentoring are essential.
5. Senior management must be on the "lunatic fringe" to make this work - a
company's top management must drive the implementation of Six Sigma.
Everyone has to participate in a Six Sigma effort, and that includes salespeople. Six
Sigma methods and tools are particularly well-suited to support the development of an
organizations global sales capabilities. There are some huge benefits for all selling
organization if they implement this approach (Hesselschwerdt, P. 2003):
1. Significant increases in win rates on competitive bids. Applying this to a large
global industrial company can mean adding billions to the top line as well as
substantially improving the bottom line.
2. Improved customer penetration and retention. By systematically identifying
critical to customer (CTC) requirements the baseline for developing Six Sigma
improvements organizations ensure that all processes and activities deliver on the
known, measurable elements that ensure customer satisfaction. The result is
increased, customer these and other challenges will be based on an organizations
specific situation.
3. Reduced non-selling time and increased sales force productivity.
organizations, non-selling time can make up more than half of the available time of
a sales person. Six Sigma techniques focus on identifying and eliminating waste and
non-value adding activities, resulting in significant increases in the time available
for key selling activities.
Successful implementation and organizational application of Six Sigma
methodology have been exploding in the last few years. This approach becomes a very
good driving force for many market oriented companies. Factors influencing
Sigma implementation include management involvement and organizational commitment,
cultural change and continuous training (Sumer, S. 2011:27).
an organization and it will go deep into its fabric and therefore ne
drive behind it. It must be seen as part of a total approach, and it demands a level of quality
competence from the organization before the benefits can begin to be delivered. Quality
improvement methods such as Six Sigma may be very pow
directed and need a clear strategy to measure and interpret its customers needs
successfully (Van Iwaarden V.J., Van der Wiele, T., Dale, B., Williams, R., Bertsch, B.
2008: 6756).
One of the requirements related to Six Sigma in sales, set by
retention or attrition rate of customers. Because of that, we explore the rate among
observed companies, and present results in
companies have attrition rate between 0%
domestic. Interesting result is that all international companies are familiar with their
attrition rate, but in the other hand we have 8% of domestic which are not sure abou
percentage.
Diagram 3: Customers attrition rate
Source: authors' calculation
In further research we include all four elements of marketing mix and test inter
correlation status among them. With next question we tried to gain a complete picture of
the capabilities that companies can use on the market and assume perception between
quality on the one side and other elements of marketing mix on the other.
5
5
%
3
5
%
2
9
%
1
3
%
0%-20% 21%-40%
Internationalcompanies
1039
selling time and increased sales force productivity.
selling time can make up more than half of the available time of
a sales person. Six Sigma techniques focus on identifying and eliminating waste and
value adding activities, resulting in significant increases in the time available
or key selling activities.
Successful implementation and organizational application of Six Sigma
methodology have been exploding in the last few years. This approach becomes a very
good driving force for many market oriented companies. Factors influencing
Sigma implementation include management involvement and organizational commitment,
cultural change and continuous training (Sumer, S. 2011:27). Six Sigma can revolutionize
an organization and it will go deep into its fabric and therefore needs top management
drive behind it. It must be seen as part of a total approach, and it demands a level of quality
competence from the organization before the benefits can begin to be delivered. Quality
improvement methods such as Six Sigma may be very powerful but they have to be
directed and need a clear strategy to measure and interpret its customers needs
successfully (Van Iwaarden V.J., Van der Wiele, T., Dale, B., Williams, R., Bertsch, B.
One of the requirements related to Six Sigma in sales, set by Hesselschwerdt, is
retention or attrition rate of customers. Because of that, we explore the rate among
observed companies, and present results in (Diagram 3). As we see 90% of international
panies have attrition rate between 0%-40%, while this is the case with only 42% of
domestic. Interesting result is that all international companies are familiar with their
attrition rate, but in the other hand we have 8% of domestic which are not sure abou
Customers attrition rate
In further research we include all four elements of marketing mix and test inter
correlation status among them. With next question we tried to gain a complete picture of
the capabilities that companies can use on the market and assume perception between
ality on the one side and other elements of marketing mix on the other.
5
%
0
%
5
%
2
5
%
2
1
%
4
%
41%-60% 61%-80% 81%-100%
percentage
Internationalcompanies Domesticcompanies
selling time and increased sales force productivity. In many
selling time can make up more than half of the available time of
a sales person. Six Sigma techniques focus on identifying and eliminating waste and
value adding activities, resulting in significant increases in the time available
Successful implementation and organizational application of Six Sigma
methodology have been exploding in the last few years. This approach becomes a very
good driving force for many market oriented companies. Factors influencing successful Six
Sigma implementation include management involvement and organizational commitment,
Six Sigma can revolutionize
eds top management
drive behind it. It must be seen as part of a total approach, and it demands a level of quality
competence from the organization before the benefits can begin to be delivered. Quality
erful but they have to be
directed and need a clear strategy to measure and interpret its customers needs
successfully (Van Iwaarden V.J., Van der Wiele, T., Dale, B., Williams, R., Bertsch, B.
Hesselschwerdt, is
retention or attrition rate of customers. Because of that, we explore the rate among
. As we see 90% of international
40%, while this is the case with only 42% of
domestic. Interesting result is that all international companies are familiar with their
attrition rate, but in the other hand we have 8% of domestic which are not sure about the
In further research we include all four elements of marketing mix and test inter
correlation status among them. With next question we tried to gain a complete picture of
the capabilities that companies can use on the market and assume perception between
ality on the one side and other elements of marketing mix on the other. Question was
0
%
8
%
Unknown
percentage
1040
composed like four statements where companies were obligated to rate importance level of
marketing mix element they consider that is most valuable for their customers. Statistical
correlation among these four parameters we can introduce in text form: Quality M-W =
162.000; p = 0.018 < 0.05; Mean-rank IT/DOM = 26.40/19.25; Md IT/DOM =
5.00/4.00; Price M-W = 167.500; p = 0.041 < 0.05; Mean-rank IT/DOM =
18.80/25.52; Md IT/DOM = 3.00/3.00; Distribution M-W = 227.500; p = 0.384 >
0.05; Mean-rank IT/DOM = 21.88/23.02; Md IT/DOM = 4.00/3.00; Promotion M-
W = 202.000; p = 0.185 > 0.05; Mean-rank IT/DOM = 24.40/20.92; Md IT/DOM =
4.00/4.00. Arithmetical mean results: Quality: IT=4.70; DOM=4.00. Price: IT: 2.55;
DOM: 3.25. Promotion: IT=3.70; DOM: 3.83. Distribution: IT=3.75; DOM=3.38.
These results unambiguously indicate that international companies pay lot more attention
to quality issue than domestic companies.
4.2.4. Lean management in sales
For a business perspective the term lean is used to describe a philosophy of management
which involves a set of tools and techniques used to optimize time, assets, and
productivity, while continually improving the quality of products and services for
customers (Atkinson, C., Linehan M. 2008:3). Lean is about focusing whole team's efforts
to increase the value that needs to be delivered to the customers, while eliminating
uneconomical activities. The shortest definition available in the literature says: Lean is
about doing more for less." Every business function in the company can be developed
using lean techniques and sales is no different.
Lean approach in different from other approaches in four very important issues
(Headrick, B. 2011):
1. First responsibility is to get your costumers to want what they need,
2. You provide the solution to their pain just in time when they are looking for it,
not when you are doing a big sales push,
3. It involves building relationships that mature and develop over time,
4. It involves low waste activities that are low cost these activities are measurable,
repeatable and adaptable.
Womack and Jones (2003) have documented in company after company that lean
thinking made it possible to significantly reduce the time to make and deliver a product (or
service), lower costs, and increase the quality and value of what these companies deliver to
their customers. In fact, they confidently state that if you cant quickly take throughput
times down by half in product development, 75 percent in order processing, and 90 percent
in physical production, you are doing something wrong.
In all lean implementations after some steps focus need to be moved to sales function.
This is very common in todays business environment. The process of implementing will
result with capacity that is freed up, while waste is eliminated. Question is: What the
company want to do with the available capacity? Answer is simple. An organization need
to use the available capacity to produce and create more value for costumers by doing
proactive sales activities. This is the main goal for all lean market oriented companies.
For sales process according Lean Managements politics role of relationships is very
important. In our research, driven by the idea of linking functions between the customer
and seller, which is the base for establishing long term cooperation among companies, we
explored current and expected level of these relationships among companies. We used five
1041
functions (departments) in the company: Legal, Finance, Accounting, Marketing and
Purchasing.
Diagram 4: Current and expected relationships level among business functions
Source: authors' calculation
Results analysis, presented in (Diagram 4), which are related to the current
relationships level of linked business function, show that international companies, as
opposed to domestic, most often have linked legal, finance and procurement business
function in the selling process. When we talk about accounting and marketing departments,
there was no statistically significant difference, and we can conclude that both groups of
companies have similar results. It is interesting that the international companies consider
that all departments or business functions should be a maximum involved in the sales
process, while domestic companies consider this only for marketing and accounting
departments.
From the all above, especially from an analysis that directly oppose the perception
of the relation between the price and quality, it is clear that the hypothesis: International
companies, as opposed to domestic, use quality like differentiation tool for building
competitive advantages, is finally confirmed. International companies are much more
oriented towards establishing a high quality system framework through their products and
services, and they consider that this is the only way they can differentiate themselves from
their competitors.
5. COCLUSIO
Today's business environment is very competitive. To be successful, companies need to
plan carefully and work very hard. One of the keys to a successful business is having
knowledge of the market conditions and possibilities. Companies often spend copious
amounts of time and effort developing a business and sales strategy. Current market
conditions are important when selecting sales strategy because customer needs fluctuate
depending on a lot of factors. This paper deals with three separate topics, which are
3,0
5,0
1,0
2,0
2,5
4,0
1,0
2,0
3,0
3,5
1,0
1,0
2,0
3,0
1,0
1,0
2,0
4,0
1,0
2,0
0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0
MedianINTERNATIONALCOMPANIES
MedianDOMESTICCOMPANIES
MedianINTERNATIONALCOMPANIES
MedianDOMESTICCOMPANIES
C
U
R
R
E
N
T
R
E
L
A
T
I
O
N
S
H
I
P
S
L
E
V
E
L
E
X
P
E
C
T
E
D
R
E
L
A
T
I
O
N
S
H
I
P
S
L
E
V
E
L
Legal Finance Accounting Marketing Purchasing
1042
strongly associated to each other, and highly related with the role of quality. At first we
analyzed employment supply in four ex-Yugoslavian countries.
In a turbulent business environment, the natural tendency among business sales
leaders is to hire more sales representatives, but this is exactly the wrong thing to do. This
is only short term strategy, and there are few reasons for this theory. At begging new sales
representatives are new cost centers, and we are not sure about their skills. Like additional
problem we have unwillingness of companies management to invest resources in sales
team education. This just proves that the companies, in an effort to overcome the
difficulties of the economic crisis, react quickly and without planning, which leads to the
creation of even larger problems. Short research had done using information from four
countries, shows that companies in this area are making this mistake. Companies must
begin to set long term goals, and plan their activities in accordance with market demands.
The second part of the paper put the emphasis on the importance of recognition a
quality as a crucial factor of business development, both for individual companies and
entire economies. ISO Standard is not a guarantee of success anymore. Measuring the
intensity of ISO Standard we sow that Bosnia and Herzegovina ranks highly sixth place
among thirty-two countries. This is a very good result, but domestic companies need to
improve and upgrade their quality system if they intend to be competitive on the global
market.
At the end we presented few approaches for quality improvement and provide the
results of research done on the territory of Bosnia and Herzegovina. Approaches are
observed quite closely, just in the area of sales function, and we linked them with the
results obtained from own research. It is evident that there is lot of options for companies,
and global picture of quality perception is also available. After all of this we come to
conclusion that companies have a great opportunities for improvement, that lot of issues
need to be improved, and they need, as soon as possible, to recognize the values and
elements that need to be developed. Steve Jobs once said: "Be a yardstick of quality. Some
people arent used to an environment where excellence is expected."
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