Peter Drucker, the longtime management thinker, and who was/is extremely popular in Japan, even had a manga, comic, about his management thinking, and a baseball team and student manager written, has stated, "
There is only one valid definition of business purpose: to create a customer." Drucker analyzed six major ideas of what he called the marketing concept: 1. consumer sovereignty, 2 consumer rationality, 3. the utility function, 4. the distinction between sales and marketing, 5. the systems approach, 6. the demand factor.
How do all of these play out with and in Japan business? Japan, for the most part, seemed to embrace Drucker's ideas more than US business. Drucker essentially became star in Japan, while not so much in the US.
A brief review of each of these ideas; And relate them to Japan business and consumers:
1 Consumer Sovereignty: Give priority to the customer.
Drucker claims he came up with the idea of what he saw in Misui, the sixteenth-century retailer.
Basically Drucker states that no business has control of the consumer, because the consumer can buy or not buy, it is their decision not the companies.
Just go almost anywhere in Japan and you can see this idea in full display in the type of products and services in Japan. One can do a case study, for example, on the Japanese convenience stores and how they have transformed themselves into customer oriented almost full service type places for busy consumers to visit for their daily needs.
2.Consumer Rationality: The customer know what he/she wants.
Drucker, with this idea, states that too many companies think they know more about what consumer's needs or wants than what consumers think they need or what or even more what is real value. He goes on the state companies make a big mistake in not realizing consumer know more about what is value to them than companies do. He goes on to say companies should interview customers to find out how they define value, whether in a product or a service.
In Japan, its seems companies place great emphasis on creating products and services that consumers value. One can also do a case study on customer service in Japan, a customer service that creates value of the customer. In Japan, or so it seems, the customer is still king, and as such Japanese companies make sure consumers know they are valued.
3.The Utility Function: The product should have value.
According to Drucker products are just worthless commodities until they are perceived has having value or utility for a customer. He goes on the say perceptions of the producer and consumer vary substantively. "
A customer never buys a product, he or she, buys satisfaction." What matters is not what the producer puts in but what the customer gets out of the product or service, Drucker states. In other words, what the customer feels is the value he or she receives from the product or service.
Again, this can easily be seen in Japan business. Products and services seemed to be designed in such as way as to provide customer value and provide customers with the best quality products and services as possible. Products seemed to be designed in mind of the customer for the use and benefit of the customer and not necessarily for the benefit of the company that produced the product. Even to the point of practicality in terms of how to use a product, it seems Japanese companies go out of their way to make sure the products are consumer friendly.
4.The Distinction Between Sales and Marketing: Everything in a company should be about marketing.
The marketing concept, according to Drucker, emphasizes producing what the market needs. He goes on the state, that if marketing is done correctly, then selling would become less needed or less important than it is. The purpose of marketing is to make selling almost un-needed. The goal of marketing is to know and understand the customer so well that the product or service fits the customer and the product sells itself.
Again Japanese business seem to have zeroed in on this concept in a remarkable way. They see a company is a marketing company, not so much a sales company. Provide the products and services needed, with the correct marketing and the products can sell themselves.
But at the same time, Japanese companies still see the need for quality customer service and not just sales. Quality customer service is a major component of business in Japan, and it should never be overlooked to just selling a product.
Drucker goes on to say, he is less enthusiastic with how technology has transformed, not in a good way selling and customer service, for example in retail stores. He states that quality customer service is still an important component. And Japan seems to have still embraced quality customer service despite improvement or changes in technology.
5. The Systems Approach: Marketing should be center in a company.
Basically, what Drucker is trying to say here, is that marketing should be the main component of any business and not just a separate function. Drucker preferred a holistic approach for an enterprise in that marketing was the main component of every department in a company, with the idea, the customer is only thing that matters to a company. He further suggest there are only two things in a company: costs and customers.
For example, while a while ago, Drucker states that companies should find their core concept and how it relates to companies. He gives he example of Sony's focus on a concerted concentration on the miniaturization of its product line. Build our core concept along a marketing line that brings value to the customer.
6. The Demand Factor: Create demand among non-customers
According to Drucker's version of economic theory, a market is created by demand. He goes on to say that most businesses miss the most important idea of demand. He says most companies focus on the customers they have, but they fail to recognize, the huge potential non-customers that are not par of their customer base. In other words, find out why this large non-customer base is not buying your products instead of focusing only on your present customers.
Again I think Japan has been able to bridge that gap between its present customers and potential customers. The creation of new products and services is always important to any company, but probably even more, or even more so in Japan, is quality customer service. Customers and word of mouth, or Line or Twitter, or even old-fashioned email, is still a viable option, whether good or bad, for the spread of information and opinions. Any company that thinks quality customer service is not important faces the backlash of customers venting their feeling across the any media now days. Even if a company has quality products but poor customer service in Japan, is even more at risk losing customer demand.
Conclusion:
Peter Drucker, while a management thinker, has put marketing has the key component for any company in any industry. Marketing and the customer should be the number one focus of any company. We see this in Japan, maybe more so than any economy around the world, as his ideas and concepts were adapted more readily than in any other country.
Reference: John E. Flaherty (1999).
Peter Drucker: Shaping the managerial mind. John Wiley & Sons, Inc.
© 2020 Tom Metts, all rights reserved
