• Home
  • Soft Skills
    • Adaptability
    • Confidence
    • Change Management
    • Unlearning and Learning
    • Collaboration and Teamwork
    • Cultural Sensitivity
  • Marketing
  • Finance
  • Economics
    • Introduction to Managerial Economics >
      • Basic Techniques
      • The firm: Stakeholders, Objectives and Decision Issues
      • Scope of Managerial Economics
    • Demand and Revenue Analysis >
      • Demand Estimation and Forecasting
      • Demand Elasticity
      • Demand Concepts and Analysis
    • Prodution and Cost Analysis >
      • Production Function
      • Estimation of Production and Cost Functions
      • Cost Concepts and Analysis I
      • Cost Concepts and Analysis II
    • Pricing Decisions >
      • Pricing strategies
      • Market structure and microbes barriers to entry
      • Pricing under pure competition and pure monopoly
      • Pricing under monopolistic and oligopolistic competition
    • Narendra Modi Development Model of Gujarat
  • JBDON Golf
  • Let's Talk
  • MBA Project Sharing
  • About Us
  • CET Knowledge Zone
    • Tips From JBIMS Students >
      • Prasad Sawant
      • Chandan Roy
      • Ram
      • Ashmant Tiwari
      • Rajesh Rikame
      • Ami Kothari
      • Ankeet Adani
      • Sonam Jain
      • Mitesh Thakker
      • Tresa Sankoorikal
    • Speed Techniques
    • CET Workshops

COMPARISON OF MARKET AND PRODUCTION

When W. Edwards Deming proposed his method for statistical quality control, he emphasized the
importance of the production system beginning with the customer. Customer input provides the foundation
for creation of products that meet market needs. For decades prior to Deming, manufacturing industries in
most industrialized nations elected to manufacture goods based on their ability to be produced, what is
referred to as the "production orientation". The challenge became finding ways to promote the products to
potential purchasers in such ways as to create a perceived need for the good in the minds of potential
buyers. Today, the advertising industry still finds itself constantly battling social critics who suggest that
advertising, especially as practiced in the U.S. and Europe, creates false needs resulting in society's
unnecessary expenditures for unneeded products or services.

Marketing matured in the 1950s and 1960s. The "marketing concept," a concept that had been around for
centuries in practice if not in theory, re-emerged to suggest that the most effective and efficient marketing
strategy is to survey markets to identify unfilled needs and then to produce products that satisfy those
unmet needs. The thought was that if a product or service sufficiently satisfies consumers, the product or
service will sell itself as people with the need seek to fill it. The marketing concept means that an
organization aims all its efforts at satisfying customers. This concept requires marketers to focus their
research on what potential consumers want, then to translate that to product traits, packaging
characteristics, price levels, or availability of products to consumers.

Compare some differences in outlook between the Marketing Concept and the Production Concept and see
if you can identify differences that might be reflected in a company's relationship with customers.

Topic

Market Orientation

Product Orientation

Attitudes

toward

customers

Customer needs determine

company plans

They should be glad we exist since

we're trying to cut costs and bringing

out better products

Product offering

Company makes what it can sell

Company sells what it can make

Role of marketing research

To determine customer needs

and how well company is

satisfying them

To determine customer reaction, if at all

Interest in

Innovation

Focus is on locating new

opportunities

Focus is on technology and cost cutting

Role of

customer credit

Seen as a customer service

Seen as a necessary evil

Role of

packaging

Designed for customer

convenience and as a selling tool

Seen merely as protection for the

Product

Inventory levels

Set with customer requirements

and costs in mind

Set to make production more efficient

Transportation

arrangement

Seen as a customer service

Seen as an extension of production and storage activities, with emphasis on cost minimization

Focus of

advertising

Need-satisfying benefits of

product or service

Product features and how products are

made

Role of sales

force

Help customer buy if the

product fits his needs; coordinating

with rest of firm for

overall customer satisfaction

Sell the customer; don't worry about

other aspects of firm's relationship with

customer; get commissions

 

Powered by Create your own unique website with customizable templates.