Book Recommended Peter Drucker Purpose of Business

Create a customer Customer satisfaction is profit Profit is investment for future = Peter Drucker

Customer
Needs A state of felt deprivation Wants Forms of needs shaped by culture, personality, etc Demand Wants backed by buying power Customers with same needs will want new thus creating demand

Ways of Doing Business (four ways of satisfying)

Self production Coercion Supplication Exchange/barter

Stages of Demand (Ashtavasu)

(a) (b) (c) (d) (e) (-)ve Demand Like attempting to sell non veg in a predominantly Veg community. Eg Roz Khao Ande No demand Before Maggi Noodles were launched no body thought of demand for fast cooking noodle. Latent Demands There is an existing demand in the market, like a low nicotine cigarette. Irregular Demands Like hotels in Hill stations which have occupancy only in summer/tourist season. Faltering Demand Like George Fernandes. From the years of Railway Strike to post Emergency cabinet berth in VP Singh cabinet, to NDA Defence Minister, Tehelka episode and back and now in wilderness. It is story replete with disappearance and come backs. Similarly, Mohinder Amarnath was the great come back man of Indian Cricket. Full Demand Supply = demand

(f)

(g) (h)

Overfull Demand Supply > Demand Unwholesome Demand Vices like cigarettes, drugs, liquor, etc

Sales = Trend, Season, Cycle and Random. (In the case of Faltering demands Random factor is very high. Unlike Irregular demands where demand can be varying to a large extent in different part of the year but the demand pattern is predictable, here the demand rises and falls at random without any predictability, like share markets movement)

Demand Tackling
Tackle the demands with 6 management orientations: (a) Product Orientation Nelco TV, Mera Nam Joker etc. Hoping to catch customer by sheer quality of the product without caring for the sensibilities of the customer or the market forces. Selling Concentrate on selling the product by sales gimmicks. Reliance Telecom, Water purifiers, etc Marketing Assess the needs and wants of the people and design the product as per that. Eg Titan, Jet Airways etc Social Marketing Build the brand name with the help of social work. Eg Tata building the TATA Nagar (Jamshedpur) Production Keep producing Customer Keeping customer welfare as the prime objective.

(b) (c) (d) (e) (f)