Making vs. marketing: personal-computer companies face a choice

Personal-computer companies trying to survive the current industry shakeout may have to stake out positions as either computer marketers or manufacturers. Larry Brewster of L.S. Brewster Inc., a Boston marketing consultant, notes that different skills are required for each area, and successful companies have to devote resources to one or the other.

Companies like the Zenith Corporation can leverage their strong manufacturing facilities by selling to firms that purchase large quantities of components or finished products and sell under their own label. In contrast, firms that buy products and market them through their own strong distribution channels (Tandy Corporation, for example) do not have to absorb a tooling loss if the market turns down; they simply cut back orders to their suppliers.

Other nonpersonal-computer companies - AT&T, for example, with its top executives of manufacturing background and stripped of its distribution channels after divestiture - must choose between marketing and manufacturing.

How can a company tell whether to aim for manufacturing or marketing?

Some questions to ask are: How mechanized is the company? How does that compare with the competition? How much of the cost of doing business is represented by nonlabor (sales, marketing) activities? Does the company's product cost less than the competitor's?

In other words, a company can determine what its strengths are and focus its efforts accordingly. It can excel as a marketer if it has healthy distribution channels, good relationships with those channels, and the ability to introduce products on time. A successful manufacturer, on the other hand, produces a high-quality product at low cost. It develops suppliers that are willing to deliver ''zero defect'' parts on short notice, and so absorb more of the ''cost of quality.''

About these ads
Sponsored Content by LockerDome

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...

Save for later

Save
Cancel

Saved ( of items)

This item has been saved to read later from any device.
Access saved items through your user name at the top of the page.

View Saved Items

OK

Failed to save

You reached the limit of 20 saved items.
Please visit following link to manage you saved items.

View Saved Items

OK

Failed to save

You have already saved this item.

View Saved Items

OK