PRODUCTIVE FLOW, PRODUCT QUALITY AND INCREASE IN SALES AND PROFITS
Different companies employ different strategies to ensure that they stay in the market. However, a common thing among all companies is to ensure that all their strategies lead to the maximization of resources to make more sales and huge profits from the opportunities they enjoy in the market (Kimmel, et al., 2010, p. 22). Therefore, companies and organizations establish and implement different strategies to achieve their short-term and long-term strategies. These strategies are aimed at achieving sales increases, improve production capacities, reduce costs, improve return from investments and increase profit margins from the increase in product awareness. Improvements in productive flow and product quality can help increase sales and profits, largely.
Flow production is a phrase used to refer to a continuous movement of products, items or goods through a production process. It means that when one task is completed in a production process, another task must start immediately. Therefore, the time taken on tasks of similar importance must be the same. Productive flow contributes heavily on the sales and profits that a company or an organization can reach in the market (Ryans, et al., 2008, p. 241). Productive flow determines whether a company or an organization has its products in the market, on a continuous manner or not. Improvements on the productive flow ensure that a company continues to produce its goods and taking them to the market on a continuous basis, thus increasing its sales (Elias, 2008, p. 111).
Mere productive flow may not assure more sales and profits in the market. This is because initiating a continuous product flow without tying it to issues relating to cost of production, the availability of resources and the time taken cannot be successful. However, the improvements in productive flow means that an organization or a company pays attention to issues that makes the productive flow profitable to the company (Wolff, 1999, p 17). For instance, the improvement in productive flow ensures that a company balances its costs of production with the sales and profits it expects to gain from the market. It also helps an organization to achieve a balance between the available resources and the expected outcomes and to plan time in a proper manner to the advantage of the company through sales. Therefore, improvements in productive flow helps to increase sales and profits for the fact that it ensures a constant flow of products in the market while at the same time ensuring that the production and the costs are balances appropriately.
The quality of a product highly determines the sales and profits that a company or an organization can acquire from the market. A product can be said to be a quality product when it meets certain standards and specifications (Vickers, 1995, p 70). The bureau of standards and other organizations are the ones mostly responsible for setting these specifications and standards. However, when it comes to customers and consumers, they do not use such objective criteria when considering the quality of a product. In most cases, the perceived quality is in the mind of a customer and the level of quality can vary from one person to the other. Despite this, some aspects, such as durability, efficiency and safety among others determine the quality of a product.
Improvements in the quality of products are remarkably influential in an increase of sales and profits that a company or an organization can get. The improvement of product quality must in all circumstances meet the needs of the customer, as opposed to the producer. The customers determine whether a company or a business can achieve increased sales and profits by way of purchasing products. Therefore, when a product is made in a manner that meets the needs of a customer, then it achieves increased sales and profits. Therefore, improvements in product quality must reflect customer needs even though these needs may not coincide with other standards in the industry. When customers are satisfied with the initial purchase, they will regard the product as a quality good and will repurchase it. On that basis, product quality increases sales and profits.
When addressing the issues of product quality, branding of the product comes in as one of the most important aspects. A strong product brand is essential for its success in the market. However, a product cannot have a strong brand or cannot succeed, in the market when it is not of a quality value. The strength of a product brand reflects the experiences of customers in buying and using the product (Pilat, 1996, p 45). Therefore, making product quality an essential part of the brand value is important in ensuring that a product attracts customers repeatedly. This means that the quality of a product goes hand-in-hand with its brand image and plays a significant role in increasing the sales and profits that a business can get. Product quality and brand determine the perception that customers have on the product. Therefore, when a product is of a quality value it will definitely attract more customers and further sales and profits (Nickell, Nicolitsas & Dryden, 1997, p 56).
It is also important to state that the quality of a product contributes to its advertisement and sales. All people are attracted to quality products even if some cannot afford to buy it. When a product attracts customers due to its quality, the product will make more sales and profits (Hay & Liu, 1997, p 40). People tend to pass information about quality products to their friends and families. This increases the awareness of the product to many people helping the product get more sales. This way, it becomes easier for the product to achieve more sales and profits in the market (Waterson, 2003, p 21).
Improving productive flow and product quality does not mean that a company or business should make the processes of production and the product itself expensive. When improving the productive flow and product quality, some companies may make the product become that of a higher quality but so expensive to the point that only a few customers can buy it (Geroski, Machin, & van Reenen, 1993, p 89). This will minimize the sales and further negatively affect the profit margins. Therefore, improving productive flow and product quality can only be beneficial in the increase of sales and profits when the product is continuously available in the market and its price is reasonable to the target market.
In conclusion, the improvement in productive flow and product quality leads to an increase in sales and profits in the sense that they ensure a continuous flow of products in the market and customer satisfaction. Customer satisfaction of the product determines the sales and the profits that can be achieved by a company. However, improvement in productive flow and product quality may fail to increase the sales and profits of products in the market, it the improvement causes the product to be expensive or fail to meet the needs of the customers or consumers.
Elias, D., 2008. Globalization: prospects and problems. London: Routledge.
Geroski, P., Machin, S. & van Reenen, J., 1993. The profitability of innovating firms, RAND Journal of Economics, Vol. 24(2), p 89.
Hay, D.A. and Liu, G.S., 1997. The efficiency of firms: What difference does competition make? The Economic Journal, 10, p 40.
Kimmel, P. D., Weygandt, J. J. & Kieso, D. E., 2010. Accounting: Tools for Business Decision Makers. New York: John Wiley & Sons.
Nickell, S.J., Nicolitsas, D. and Dryden, N., 1997. What Makes Firms Perform Well? European Economic Review, Vol. 4, p 56.
Pilat, D., 1996. Competition, productivity and efficiency, OECD Economic Studies, No. 27, p 45.
Ryans, A., More, R., Barclay, D. & Deutscher, T., 2008. Winning Market Leadership: Strategic Market Planning for Technology-Driven Businesses. New York: John Wiley & Sons.
Vickers, J., 1995. Concepts of Competition, Oxford Economic Papers, vol.47 (1), p.70
Waterson, M., 2003. The role of consumers in competition and competition policy, International Journal of Industrial Organization, p 21.
Wolff, E.N., 1999. The productivity paradox: Evidence from indirect indicators of service sector productivity growth, Canadian Journal of Economics, 32 (2), p 17.
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