Modify IPA for quality improvement: Taguchi's signal‐to‐noise ratio approach

Purpose – Importance performance analysis (IPA) is a technique widely used to assist organisations in developing marketing strategies and improving products or service quality. Many scholars have revised IPA to augment its effectiveness. However, this involves some unknown problems that could lead organisations to make wrong decisions. This paper aims to look at this issue. Design/methodology/approach – As a solution, this paper introduces Taguchi's signal‐to‐noise (S/N) ratio approach to treat ordered categorical data in analysing customer satisfaction and integrates it with gap analysis (GA) through S/N ratio to develop a modified IPA model. A Taiwan air‐conditioning manufacturer maintenance and repair service is illustrated to demonstrate the method. Findings – According to the test case, the modified IPA model obtained more reliable results than the traditional IPA method, considering the central tendency and variance from different customer perceptions. The proposed method can determine exact marketing strategies and improvement directions for product or service quality attributes, reduce variance and (or) move performance to the target value. Originality/value – This model overcomes the limitations of the traditional IPA model while retaining the merits of the traditional model. Using the modified IPA model an organisation can define its marketing strategies and take action to establish quality improvement activities. In other words, the organisation can avoid making wrong decisions when using the modified IPA model.