Monday, February 24, 2003

That thing between products and services

The Manila Times
Business Times Section
Monday, Feb 24, 2003
By Moje Ramos-Aquino
That thing between products and services

If you have been with us since the start of our Journey in Entrepreneurship, you would have noticed that we always refer to products or services as products and services. If you have a product, then service comes with it. Even if you are selling a tangible product like fish to a housewife in the wet market or a frequency converter to a manufacturing company in an industrial park, the fish and the frequency converter comes with service, not all by their lonesome.

The fish you sell comes with honest service. You talk to your customers and help them select the freshest variety of fish you are selling. You have to weigh the fish in an accurately calibrated scale; clean it by removing the scales, gills and whatever other parts your customers wouldn’t want to eat; wash it; and wrap it twice in a clear plastic bag, then in a more portable “sando” bag. You get the payment and give the exact change. Sometimes, you even give a discount. Then, you scribble something like a receipt in a “Grade 1 pad paper.” Then you bid them goodbye, “Balik kayo, suki.” Those are expected services when you are selling fish in the public market.

When you are selling a frequency converter, there is also after sales service for repairs and maintenance aside from the pointofsale service. So, when you have products to sell, they come with service.

Or your main product might be service, e.g. laundry service or car repair service. You are actually selling them something tangible, too. It is the dress or shirt that is clean, smoothly ironed, no buttons missing, no damage to the fabric or buttons or zipper in a hanger inside a clean plastic wrap. Or it is a clean car than can now run without trouble, with new or duly repaired parts with all its nuts and bolts in place. When I used to bring my car to the repair shop, I would always tell the mechanics to please make sure that whatever nuts and bolts they remove from my car should be properly returned or replaced. Do you notice that there are so many “extra” nuts and bolts scattered around a car repair shop? Not enough service. Mechanics are too lazy to put them all back. “Puede na ito. Umaandar na, eh.”

So, Ms./Mr. Entrepreneur, when you are considering a certain product, please also think about the services that come with it; vice versa, when you are talking service, think about the tangibles that come with it.

This is where and how you distinguish an entrepreneur from a profitoriented businessperson. An entrepreneur is customeroriented. An entrepreneur knows that customers set the standards of quality products and services and remembers that the customers are the ones who will buy and pay for the product and keep your business afloat. This is the arena for mere survival or growth.

This is where you need to go into market research and market tests. Last Monday, we discussed about customer demographics and needs to help you determine what product to sell. These factors, among others, will also help you choose the right location for your business.

Other questions to ask yourself in determining products and services and doing your market research and testing your market are:

• Will you make and sell your products and services or will you just buy and sell? Is it more advantageous to make your own products? Do you have enough financial capital? If you will go into manufacturing, will you be able to hire the number of personnel with the right competencies (knowledge, skills, values and attitudes) that you will require? Do you have enough space to house your manufacturing operations, warehouse, delivery, administrative offices, etc. Where and how will you get your raw materials, supplies, equipment and others?

What we need more in our country are manufacturers, inventors, makers, producers. The real entrepreneurs are those who invent new or reinvent old and make them new products and services again.

Entrepreneurship is akin to innovation. Innovation is what separates the entrepreneurs from the usual profitseekers or fastbuck artists. All developed and progressive economies are backed by strong entrepreneurial manufacturing community. They continuously learn and innovate. Small as they are in terms of land area, the rich economies of Singapore and Hong Kong are supported by strong their manufacturing backbones and Filipino domestic helpers.

Two weeks ago at the HRD Japan 2003 Conference in Yokohama, Japan, I listened intently to the English translation of the Japanese speaker from NEC. (Sorry, I didn’t even get his name or position. The handouts and programs were all in Japanese. We were blessed with simultaneous translations, though.) He said that the threat to the dominance of Japan in the home appliance business is coming from China which is now an emerging manufacturing economy. Where five years ago Japan was ranked No. 2 in the world and China was nowhere in the list. Now Japan has slid to No. 3 and guess who is in No. 4 position? China.

Manufacturing requires real commitment and involvement. It is not easy to back out of a manufacturing business. Manufacturing is like building a cathedral for people to worship. You are not just putting hollow blocks together or simply building a cathedral.

Aside from our overseas Filipino workers, the manufacturers who create new business, new products and new technologies are the real heroes of our economy. Bill Gates continue to amass mindboggling wealth because he relentlessly pursues his dream of inventing and reinventing technology. Tiger Woods has made a selfactualizing career of his sports—always striving for new and better ways to play golf and win tournaments. Two entrepreneurs in different fields.

Indeed, we need more manufacturers, producers, makers, inventors, innovators in this country if our economy has to survive globalization and the bully tactics of wealthy countries. Our country has long been selling raw materials/inputs to production from minerals to human resources, not finished products.

• If you will be buying and selling, where will you source your products? How will you determine quality and how will you do quality control? What should be the lead time for reorders of your stockpile? Where and how big is your warehouse and display areas? How big is the area for customers to mill around while they look at and ponder upon your products? What about the area for your sales people and cashier?

Last December, my friend Lydia Castro, proprietor of Gibi Shoes, said she is willing to consign her shoes for us to sell. We were elated by her support. Then she asked: “Where would you stockpile the shoes? You need to get from us at least one truckload for our partnership to be mutually beneficial. You need to have, at least, one each of all sizes of each shoe style. You need to have a variety of styles for your customers to choose from.” Unfortunately, our booth was only two meters by three meters and we had other goods to sell. We didn’t have enough space for people to sit down and try the shoes. We didn’t have enough personnel to attend to them.

• If you want to locate, say, near the Quezon City Hall as Ms. Chat Macapanton asked last column, your question, aside from demographics, is: Will they pass by your location going to City Hall or coming from City Hall? Going to City Hall means that they would need things that they will use to transact business at City Hall, e.g. ballpen, paper, copying service, photo service, etc. Coming from City Hall means that they are either going back to their office or going home. That means they need something to bring home as in “pasalubong.” Food items or little things that don’t cost a lot for their children.

Going or coming, they need food, for sure. Food that they could eat on their feet.

We have many more questions. This is becoming more interesting and complicated than I originally intended this Journey in Entrepreneurship to be. I wish I wrote this column before I ventured into our night market store. Anyways, we’ll continue this learning adventure every Monday. Stick with us.

Meantime, I am pleased to invite you to the American Society for Training & Development (ASTD) 2003 International Conference and Exposition. It will be held at the San Diego Convention Center, San Diego, California, this May 1822. You may call Ms. Malou Amante at 7144533 for details of the conference and of joining the delegation of Paradigms & Paradoxes Consultants. To avail of our special delegation rate, please remember to write our delegation code (10429860)in your registration form.

Ms. Moje RamosAquino is president of Paradigms & Paradoxes Corporation and invites you to email your feedback to

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