12. Products
When we think of business, we usually think of tangible products that we can see and touch: computers on the desk or cars in the showroom. We may also think of primary products like coal or agricultural goods. But manufacturing forms a diminishing part of most advanced economies: only 17 percent of the US economy, for example. What manufacturing there is increasingly lean with 'Japanese' techniques such as just-in-time (JIT) ordering of components and total quality management (TQM) becoming widespread.
There is an unresolved argument about whether economies need manufacturing at all to survive and flourish. In many people's minds, nevertheless, there is great regret when a factory closes in a 'traditional' industry: there is something more 'real' about work in a car plant than in a call centre. (The call centre may be selling intangible products such as mortgages: more and more services are described in product terms.) But the car plant may provide more work indirectly, for example at the component manufacturers that supply it.
We define ourselves partly by the products we own and use, wherever they are made. Economies in different parts of the world are at different stages of development in the way products are bought and perceived. In newly industrialised countries such as some of those in Asia, more and more people are now able to afford consumer durables like washing machines for the first time, and companies that sell these types of goods can make large amounts of money. In the West, the market for televisions or washing machines is basically one of replacement. In a situation like this, design, brand and image become more important. Previously prestigious products, like certain makes of luxury car, become increasingly affordable, and manufacturers have to be careful to stay ahead of the game to avoid their brands being perceived as 'ordinary'.
The cars, televisions and washing machines of the 1955 may have had more style, but modern products are technically far better now than they were then. Consumers may complain about designed-in obsolescence and unnecessary sophistication of products with too many features that are never used, and manufacturers may have started to take this into account, simplifying the ways they are used. Consumers are also able to obtain and compare information about different products more and more easily. Consumerism is a force that manufacturers increasingly have to reckon with.
Read on
William M Feld: Lean Manufacturing, St Lucie Press, 2000
David Lewis, Darren Bridger: The Soul of the New Consumer: Authenticity-What We Buy and Why in the New Economy, Nicholas Brealey, 2000
Paul Postma, Philip Kotler: The New Marketing Era, McGraw Hill, 1998