Homework Clinic
Social Science Clinic => Business => Marketing => Topic started by: charchew on Dec 2, 2019
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A joke among the Japanese says that the only way to escape from the salesperson is to leave the country. Explain this statement highlighting the differences between lean producers and U.S. mass producers.
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The primary difference between lean producers and U.S. mass producers is in the way they do business deals with their respective dealers, distributors, and customers. U.S. mass producers follow the basic industry model and maintain an "arm's-length" relationship with dealers that is often characterized by a lack of cooperation and even open hostility. There is often no sharing of information because there is no incentive to do so. All parties try to keep information about what they really want from the others. The manufacturer uses incentives and other schemes to persuade the dealers to accept the unpopular models. The dealer then has the problem of persuading customers to buy the unpopular models. The production process portion of the value chain is also broken. Thus, there is a compounding of problems all along the way between manufacturer and dealer. This is very different than what the lean producer business practices are. In Japan, where lean producers are predominant, the dealer's employees are true product specialists. They know everything about their products. A customer deals with one person in the dealership, and that person takes care of everything from the initial contact through eventual trade-in and replacement and all the problems. The linkages between dealers, marketing divisions, and product development teams are totally optimized. Once a Japanese dealership gets a customer, it is absolutely determined to hang on to that customer for life. The difference between U.S. mass producers and the Japanese lean producers reflects their fundamental differences in business objectives. The U.S. producers focus on short-term income and return on investment. Today's sale is a discrete event that is not connected to upstream activities in the value chain and has no value in tomorrow's activities. The Japanese see the process in terms of the long-term perspective. There are two major goals of the sales process. The first is to maximize the income stream from each customer over time and the second is to use the linkage with the production processes to reduce production and inventory costs and to maximize quality, and therefore, differentiation.