A buyer emerges from a mall with things he has bought.
What are the results of his shopping? The buyer got satisfaction depending on what he had bought (all the goods he wanted were available or not) and how the shopping went.
It is the service the person had been rendered at the mall that gives him satisfaction or dissatisfaction at this point.
He will experience satisfaction from the goods themselves later on after he has put them to use.
If the goods are low quality, however, the wrath of the buyer will lash at both the manufacturer and the mall.
There will also be a degree of self-blaming-where were my eyes?! How much did the manufacturer, seller, and the buyer himself contribute into the final result of the shopping-satisfaction from the bought goods? How should they share responsibility for a product which is not as expected? Anybody who does something gets a product of his work, but it is normally somebody else who consumes (uses) that product.
Manufacturer's product is the goods that the buyer buys.
The seller's product is the sales service rendered to the buyer.
The buyer consumes those two products: first, he does the seller's, and then the manufacturer's.
The result depends not only on the quality of the two, but on the way the buyer has used them.
Any deli quality food can be laid on the table in such a way that it will ruin everybody's appetite.
A consumer as he goes shopping at a local mall, or visits a wholesale company, or comes as a client to a sales department, has an idea of the results he wants to get: things he wants to buy, and kind of service he wants to get.
Thus the purpose for what the manufacturer and the seller do is defined: to satisfy the customer, their products (goods, services) must meet the customer's expectations.
However, this does not mean that the consumer always knows precisely what kind of product he would like to buy and how he should be serviced in the process of buying to feel satisfied.
In a planned economy or when fulfilling an order, the client sets out design requirements directly.
In a market economy, the design, as a rule, is not defined by the client in so many words, it must be fathomed by analyzing the market.
It is possible to manipulate the client's expectations by prompting him to desire new things and thus, as it were, creating new purpose for your business.
But in any case, overtly or otherwise, on his own accord or under force, it is the customer that sets down the purpose for both manufacturer and seller.
The manufacturer and seller in turn put the purpose in a more concrete form-objectives-for goods and services they are offering.
Henceforth both are answerable to the client for whether they understood the purpose correctly, whether the objectives correspond to the purpose and whether they have been attained.
Some forms that responsibility can take are price reduction or even loss of the customer.
If the objectives that the manufacturer and seller come forward with do not meet the purpose set out by the client, the goods and services will not be in demand.
What complicates matters, however, is the fact that the objectives cannot precisely meet the purpose, and here's why.
Besides its production cycle, any company aims to further its existence through reproduction (naturally, we leave out one-day companies that are created for a single deal).
If the production objective is one project or other aimed at manufacturing a product or rendering a service, then the reproduction objective is the future the company sees itself in.
As a minimum, it is to ensure that it will be engaged in the same activity tomorrow and get at least the same profit as today.
Reproduction objective always dominates over production objective.
The fact of the matter is if a company could have all the benefits from its work without producing anything, most companies would not work at all to produce anything.
In reality, each business has both to manufacture and sell its products to get profit and to ensure reproduction.
Accordingly, there are objectives covering products (services) and there are ones for the work the company does to provide for its future.
One peculiar thing about this combination of objectives is that although production objectives are inferior to those of reproduction one in fact can clash with the other.
Example: Company A has bought expensive machinery to better serve its clients (this has led to higher amortization costs and corporate property tax) and used expensive spare parts.
Prices are limited by how much consumers can pay.
As it slipped into a cash flow deficit, the company has tried to cut costs by reducing employee pay.
However, not being paid enough for their work today, the workers will not work their full capacity tomorrow.
Conditions for reproduction have not been met.
Expensive machinery and spare parts have not allowed the company to ensure high quality of its produce owing to high staff turnover.
A management objective has not been attained as it has not been able to reach a compromise between the desire to satisfy clients maximum way possible and meet reproduction requirements.
It is worthwhile to try and reach out to the distant future as well.
It is more than just customers that the company needs to survive.
Thus, one must speak about social value of the company, or its mission.
Mission is what the company is created for, the final social result that the creator of the business is counting on when he puts together his business concept.
One must tell mission from deliverables-the planned direct results delivered to the client.
Any company can have a mission.
For example, if a company makes ammunition, then deliverables would be ammo for particular types of firearms, whereas its mission would be ensuring that a particular branch of the armed forces has sufficient combat efficiency.
If the mission of a company is well and clearly defined and the company follows it, it means that the goods the company produces are in demand with the public.
So, the objectives of the company must correspond to its purpose and reproduction requirements, and deliverables-to be in line with its mission.
If this works, each product the company manufactures will be favored by the consumers, or, using an economic term, it will be in demand.