Consumer influence on Companys Production Process - Essay Example

Essay Summary: Consumer influence on Company’s Production Process Impacts of Consumers Concerns on Production Process Introduction The essay is based on Marketing Theory article, “Cocreation is chaotic: What it means for marketing when no one has control,” by Fisher & Smith (2011). As explained by the authors, over the past years, production decision has been a reserve of the company owners. They have been making the necessary decisions as to what to produce, how to produce and when to produce it. This is the classical economic belief that has ruled the production industry up until customers also felt the need to chip in. Even though production remains a reserve of company owners in some areas of production, for others, it continues to attract the input of consumers and no player in such industry can afford the cost of ignoring the impact of the consumers. This act of consumers contributing their ideas in the production process is what is referred to in this article as co-production. Some researchers refer to co-creation and co-production as almost meaning the same thing (Lusch & O'brien, 2006). This essay is going to be aimed at summarizing the trend that is now taking place in production processes. Consumers have identified that they need to play a role throughout the production process from conception of a product, its production, marketing, to final consumption stage. Marketers have also realized the need to incorporate the other players in co-production with examples being evidenced by the amount of engagement marketers have with consumers. Example is the case of Kao Corporation, the makers of Ban deodorant, with an attempt to capture the input from customers in the marketing process, held a contest asking girls and young women to create print advertisements that would resonate with other consumers (Vranica, 2005). It is reported that the contest drew thousands of entries, thereby adding to the fact that consumers are willing to participate in the product marketing. This trend where collaboration exists between producers and consumers has resulted in the struggle to control the product. Producers are now in a dilemma on how, and how much of their production should be left to the manipulation by consumers. They already know that consumers are continuously becoming a force to reckon with in production process and ignoring them is just like coating a disaster. Through virtual communities, consumers have continued to analyze products thoroughly resulting to a success or complete flop of the same depending on whether the product meets their expectations or not. For this reason, producers have been left with too little choices to choose from. Examples of how consumers' inputs have impacted the production process can clearly be seen from the studies on the 1950s Teddy Boys, Star Trekkers, and sports and music fans. The music incorporated so many consumers’ feedback while movies even before release to the theater, incorporated the input of customers. Many producers even readjusted their characters to live to the expectations of consumers. A recent New Line Cinema film “Snakes on a Plane,” is also a good example of how consumers can influence the production. The film has generated an enormous fan base via the web despite the fact that it was not going to hit theaters until the summer. The fan base grew so large and vocal that New Line Cinema had to add several new scenes based on suggestions from the enthusiasts. From the contributions, the company even encouraged consumers to make the music selections for the film via a contest. In modern society, these proactive consumers are impacting even the corporations like Google, Microsoft, and other software developers. Even Google has recognized the need to leave its software easily customizable according to the need of the consumer. Google has developed its Android operating software and distributes it widely to many different partners who also develop other applications that can operate together with Google operating system. The same is true for most Microsoft products. This phenomenon has seen Google close the gap with Apple Company, who insists on closed operating system. This approach has worked well with their online music business, but is now starting to show potential weakness when it comes to mobile phones, as the Google market share quickly closes the gap (Lyons, 2010). Google observes that in this competitive world, it's easier to conquer the market by teaming with others. Factors Contributing to the Recent Consumer Activity Product co-creation is a phenomenon in which customers participate in the creation of the product itself through all stages of product lifecycle. This has been enabled by so many factors some of which may include, but not limited to: Technology Innovations and improvement over time in technology have allowed the easy convergence of many consumers over internet to form virtual communities. These communities help a lot in sharing of opinions and analysis of products. "Innovations in technology are obvious starting points for understanding the increasing role of consumers in the co-creation of value'' (Prahalad & Ramaswamy, 2000). The recent revolution in communication technologies is rapidly changing the flow of ideas and information by removing the decision making point from producers, who owned the exact amounts of capital vital for packaging and broadcasting print or visual contents. This discouraged many consumers who wanted to air out their concerns to the public or such concerned companies. Media was a reserve of a few with such necessary capital. Information to be printed for public consumption was so scrutinized, and not everyone's opinion counted. Only a few influential characters controlled what got to consumers. This was a weakness that could be exploited by the producers by manipulating them even by the use of financial rewards to only print favorably. This arrangement established a flow of content from top to bottom; vice versa was not encouraged. However, this was then, current technology greatly favors the bottom-up flow of information and provide a two-way method of communicating that cascades from the top and trickles down to consumers. The new communication technologies not only efficiently deliver new and diverse forms of information to consumers, but are interactive, two-way means of communicating. This radical nature of print press has enabled consumers to print their views and disseminate without having to follow the bureaucratic procedures initially set by this printing press. The initial bureaucracies that set what got accepted or rejected for commercial publication, especially when marketing and promotion costs are factored in for new book releases are now no longer obstacles to personal printing. With this recent proliferation of many authors, so many forms of media can now be produced and disseminated at no cost or relatively very low costs. The media are now available in many forms like; books, videos, pictures, websites, blogs, Facebook, Twitter and many others. As a result of this, control is now shifting to consumers (Lusch, Vargo, & O'Brien, 2006). For this reason, these proactive customers have their publications competing the commercial media houses. Surprisingly, these social media users have more subscription than even the media houses. Myspace for example, had a subscription of over 25 million users by the end of 2005 with its major contents being consumer generated just from other social sites like Facebook, Twitter and others. This explains the impact of such consumer communities on production process because a negative campaign of one product may lead to a total collapse of such company. Burning Desire to Personalize Products Consumers have continuously expressed desire to customize certain products to their needs. They have been giving suggestions through chats on how certain products would have been more appealing if they were made in some specific ways. Since everybody would want to design a product according to a way he sees attractive to him, companies are now creating products with several appeals. An example is the character played by Jones, who possess both superheroes' character while not letting go the classical characters for others who prefer them. This need is also evidenced from the "snake in the plane" movie, music productions, Google operating system, and many others. This has also attracted more concerns from producers who are not sure on how much control they should let on their consumers. It is also a concern for the producers that authenticity of their products may get compromised. The brand being controlled by consumers is set to lose its authenticity with time as consumers keep altering the original design. This is the same concern that has worried Apple Company, who has been out to preserve their authenticity, as well as originality. It manufactures every application that their operating software may need to run and does not allow any foreign application to run in their systems. Opinion While it may be true that control is shifting from producers to consumers given the modern technology and existence of virtual community according to Fisher and Smith [Placeholder1], it is also imperative to critique the stand taken by the author of the article and his findings. Consumers do have an impact on the success of the product performance in the market that is for sure a fact. However, the researcher never explained what industries are controlled by consumers’ inputs and by statistics. Besides, Lusch points to goods dominant logic and service-dominant logic where the customer is usually separated from the process of value offering process in the goods dominant logic due to the efficiency required thereby making no space for customer interaction before the sales point (Lusch & O'brien, 2006) Surely by insinuating that consumers control production process/co-create while the example are of product marketing and sales only is unfair. There should have been more examples of products whose conception was contributed by consumers as well apart from Nike Company. It is also apparent that this assumes pure competitive markets. There are coercive monopolistic companies that are not subject to the law of supply and demand, they are exempt from competition, and prohibits any other competitor from entering the market and by virtue of this prohibition, they are able to exercise arbitrary power over market[Dem12]. Basically, in my opinion, what this means is that the consumer’s opinion does not matter in such a case since they will have to use the product without any option. Producer monopoly is an example of cases where the consumer may have a relatively little impact on the production process (Smith, 1776). However, facts and logics on how the consumer inputs influence production process in today's society is overwhelming, and thus I agree with the researcher on his findings. The need to personalize products even at the production point has contributed a lot to the recent customer activism. Nike Company allows consumers to give suggestions on how to customize their product. The same trend is also evident in motor vehicles industries where customers get their cars customized as well as jewelry but at a high cost due to job order costing. Wikstrom recognized that the role of consumers were changing from a passive receiver to an active and knowledgeable participant in a common process (Wikstrom, 1996). This assertion can't be overemphasized considering the recent formation of consumer communities on social media to air out their concerns. The view of Lusch and Vargo are compromised as they never acknowledged that companies still reserved the right to decide when to consider inputs of consumers. The whole relationship is biased on the favor of the companies. With these statements, I conclude that consumers have a greater influence on the production process and companies that choose to ignore this, are headed to failure. References Placeholder1: , (Fisher & Smith, Cocreation is chaotic: What it means for marketing when no one has control, 2011), Dem12: , (Demirdjian, 2012), Read More