Marketing Eras


  • Production Era:  Prior to 1925, most firms operating in highly developed economies focused narrowly on production. Manufacturers stressed production of quality products and then looked for people to purchase them.  The production era did not reach its peak until the early part of 20th century.
  • Sales Era: Manufacturers began to increase their emphasis on effective sales forces to find customers for their output. Firms attempted to match their output to the potential number of customers who would want it. Companies with a sales orientation assume that customers will resist purchasing products and services not deemed essential and that the task of personal selling and advertising is to convince them to buy. Although marketing departments began to emerge from shadows of production, finance, and engineering during the sales era, marketing dominated sales and other areas. Selling is thus a component of marketing.
  • Marketing: Personal incomes and consumer demand for products and services dropped rapidly thrusting marketing into a more important role. Organizational survival dictated that managers pay close attention to the markets for their goods and services. The trend ended with the outbreak of World War 11, when rationing and shortages of consumer goods became commonplace. The war years created only a pause in an emerging trend in business: a shift in the focus from products and sales to satisfying customer needs.
  • Relationship: It emerged during the 90s. Organizations carried the marketing era’s customer orientation one step further by focusing on establishing and maintaining relationships. This effort represented a major shift from the traditional concept of marketing as a simple exchange between buyer and seller. Relationship marketing by contrast, involves long-term, value-added relationships developed over time, strategic alliances and partnerships retailers play major roles in relationship marketing.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

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Productivity—the Japanese Way


Economists are forever telling us that we need to increase productivity in order to improve our standard of living. Productivity is one of those concepts that are so loaded with meaning and implications that is very difficult to define, much less explain. Not surprisingly then, improving “it” is one of the most difficult tasks facing business. More to the point, the time for improvement is quickly running out. Industrial performance is being outstripped at a frightening pace by the Japanese. In fact, it has reached the point where their productivity performance is so superior that they can literally pick any product and any market and quickly come to dominate it.

The idea that Japanese are uniquely gifted in only a few related areas has been debunked by their proven successes in industries as diverse as automobiles and semi-conductors. As well, the facile suggestion that the Japanese are somehow culturally inclined to be productive doesn’t wash. Japanese managers have taken over factories in Europe and the US and greatly improved productivity records. Productivity has also been high in their North American plants.

If corporate managers believe that their workers can be as competitive as anyone else in the world, and technically, there’s no valid reason why they can’t be, then they must find better ways to help their employees realize their potential. In that sense, study of Japanese methods is a jumping-off point that can lead to adaptations that will produce unique ways of improving productivity.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Consumer Sovereignty


Mainstream economics uses some simple starting points; it believes that they are the best possible. First is that agents have more wants than they can attain, so that they feel scarcity; in fact, for practical purposes, wants are assumed to be endless. Second, third and fourth are that agents are self-interested, rational, and the best judges of their own well-being. These four assumptions are indeed usually good starting points, rather than starting by assuming that agents are completely fulfilled, altruistic, irrational, and not well-placed to evaluate their own situation. They are not equally good as finishing points. Sometimes good arguments exist for not accepting them.

An assumption that agents are the best judges of their own well being is less questionable for businesspeople and corporations, given the resources they have for analysis. Debate focuses more on consumers. The phrase consumer sovereignty is sometimes read descriptively, to mean that consumers are sovereign, in that procedures are induced via profit-seeking and competition  to provide what consumers want. Sometimes it is read normatively, to mean that consumers should be sovereign, their wishes should prevail concerning what is good for them. The normative claim can rest on three different bases: that consumers do make good choices; that the alternative stance is worse – to use someone else’s judgments and estimates of what is good for a person and how good it is; or quite differently, that people have the right to make their own choices and mistakes.

Consumers will not make good choices automatically and unconditionally. Our wants are not simple; for example, some are wants to not to have other wants (such as the desire to smoke or a compulsion to gamble). Establishing a mature balance between wants involves skills. Choice is also unlikely to bring satisfaction if taken on the basis of weak information. Markets often do not provide consumers with full and reliable information, for it is hard to exclude people from information and therefore to ensure payment for it, so its market supply is weakened. Instead, in a commerce-dominated society, one of the main types of information that adults get will be images that say the good life is obtained through high consumption of commodities; there is too little counteracting public information.

The issue of consumer sovereignty goes beyond whether choices are good for the chooser. Other people are affected. Some wants may thus be unacceptable, notably wants that bring harm to others, including even wants to harm others. Mainstream economists have unfortunately often taken a don’t-want-to-know approach to ethics in which they confuse acceptance of all wants with a value-neutral stance.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Corporate Ghettos


When the personality of an organization breaks up, individuals develop their own cult following. A reaction common to many organizations is the establishment of corporate ghettos, where individuals gather together in the absence of proper leadership to form informal but fiercely defensive groups.

These separate ghettos become the mainstay of internal communication and loyalty switches from the organization to the ghetto. All socializing and as much working contact as possible is restricted to other members of the ghetto.

Ghettos can have amazing influence on the lives of all concerned and in time come to dominate the entire culture and effectiveness of an organization.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Bargaining Power of Suppliers


Increasing prices and reducing the quality of products sold are potential means through which suppliers can exert power over firms competing within an industry. If a firm is unable to recover cost increases through its pricing structure, its profitability is reduced by its suppliers’ actions. A supplier group is powerful when:

  • It is dominated by a few large companies and is more concentrated than the industry to which it sells;
  • Satisfactory substitute products are not available to industry firms;
  • Industry firms are not a significant customer for the supplier group;
  • Suppliers’ goods are critical to buyers’ marketplace success;
  • The effectiveness of suppliers’ products has created high switching costs for industry firms, and
  • Suppliers are a credible threat to integrate forward into the buyers’ industry. Credibility is enhanced when suppliers have substantial resources and provide the industry’s firms with a highly differentiated product.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Defining Oligopoly


An oligopoly is a form of competition in which a market is dominated by just a few sellers. Generally, oligopolies exist in industries that produce products such as steel, cereal, automobiles, aluminum, and aircraft. One reason some industries remain in the hands of a few sellers is that the initial investment to enter an oligopolistic industry is usually tremendous. Think what it would cost to build a steel mill or an automobile assembly plant. In an oligopoly, prices tend to be close to the same. Note, for example, how most credit cards charge very similar rates. The reason for this is simple. Intense price competition would lower profits for all the competitors, since a price cut on the part of one producer would most likely be matched by others. Product differentiation, rather than price differentiation, is usually the major factor in market success in a situation of oligopoly.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

Basic Organizational Structures


Although there is an almost infinite variety of structural forms, certain basic types predominate in modern complex organizations. There are three basic organizational structures. The conglomerate structure is a variant of divisional structure and is thus not depicted as a fourth structure. Generally speaking, each structure tends to support some corporate strategies over others.

  • Simple Structure has no functional or product categories and is appropriate for a small, entrepreneur-dominated company with one or two product lines that operates in a reasonably small, easily identifiable market niche. Employees tend to be generalists and jacks of all trades.
  • Functional structure is appropriate for a medium-sized firm with several related product lines in one industry. Employees tend to be specialists in the business functions important to that industry, such as manufacturing, marketing, finance, and human resources.
  • Divisional structure is appropriate for a large corporation with many product lines in several related industries. Employees tend to be functional specialists organized.
  • Strategic business units (SBU)are a recent modification to the divisional structure. Strategic business units are divisions or groups of divisions composed of independent product-market segments that are given primary responsibility and authority for the management of their own functional areas. An SBU may be of any size or level, but it must have 1) a unique mission, 2) identifiable competitors, 3)an external market focus, and 4) control of its business functions. The idea is to decentralize on the basis of strategic elements rather than on the basis of size, product characteristics, or span of control and to create horizontal linkages among units previously kept separate.
  • Conglomerate structure is appropriate for a large corporation with many product lines in several unrelated industries. A variant of the divisional structure, the conglomerate structure (sometimes called a holding company) is typically an assemblage of legally independent firms (subsidiaries) operating under one corporate umbrella but controlled through the subsidiaries’ boards of directors. The unrelated nature of the subsidiaries prevents any attempt at gaining synergy among them.

If the current basic structure of corporation does not easily support a strategy under consideration, top management must decide if the proposed strategy is feasible or if the structure should be changed to a more advanced structure.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

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