The subject of research in this thesis is the analysis of the impact of quality management and quality perception on the business performance of companies in the cosmetics industry in the Republic of Croatia. The main goal of the paper is to show the influence of the consumer's perception of quality on the market positioning and operations of companies in the cosmetics industry in the Republic of Croatia. Therefore, the research part of the work is based on the empirical survey of the perception of quality and satisfaction of users of cosmetic products in the Republic of Croatia. The purpose of the paper is to determine the impact of the perception of product quality on the business performance of companies in the cosmetics industry. The hypothesis of the work is that the quality of the product has a positive significant effect on the market positioning of the company in the cosmetics industry, which directly affects the business performance of the company. Quality is defined through the following characteristics of cosmetic products: durability, practicality, reliability, health and quality certificates. The research confirms that the quality of the product has a positive and significant effect on the market positioning of the company in the cosmetics industry, which directly affects the business performance of the company. The respondents consider the cosmetic products of the analyzed companies to be of high quality, and the analysis of the company's operations shows that they are successful companies with an excellent market position on the Croatian cosmetics market.