Creating Value > Making a Profit ?

We've talked about a wide variety of topics during the first three discussions of our Marketing Seminar course. Because this semester's class has more students than our previous course, it makes for a more interesting discussion with brand new ideas and insight. I am excited to see where our class discussions will go from here! Yesterday, we discussed some of the bold and interesting statements of Peter Drucker, a management consultant, author, and educator. His insights on the marketing industry were out of the ordinary and gave my classmates and I a lot to think about.

In the beginning of yesterday's class, Professor Spotts had each student write a quote from Drucker's article on the board that he or she found interesting or surprising. Doing this activity not only improved my understanding of the Ascendancy of Marketing reading by Peter Drucker, it forced me to look at the quotes from a different point of view. The quote that I put on the board stimulated a lot of discussion and I'd say debate- because the statement was quite controversial. The quote I chose was "...profit is not the purpose of business and that the concept of profit maximization is not only meaningless but dangerous". WOW- that is quite the controversial statement in my opinion.

As I'm nearing the end of my undergraduate business education, it seems like all of my professors have constantly stressed the importance of making a profit in a business. What's the goal of a business (I thought)? To make money. How can a business succeed? If it has money. I began to re-evaulate my thoughts on these questions that I previously thought had such simple answers. If the goal of a business isn't to make a profit, then what is it? Our class discussed how the main goal of a business must be to create value. Based on what I know about marketing, this makes a whole lot of sense.

I think that businesses need profits to get started. Until they can get a strong customer base and figure out how to really get engaged with their customers, they'll need the backing of a good profit to stay in business. One of our classmates mentioned small businesses when talking about this topic, and how they are very customer-oriented, as opposed to profit oriented. I can definitely attest to this, because I work in a family owned jewelry store in Wilbraham. The owners are extremely generous and care much more about pleasing customers and creating a valuable experience than they do about making a profit. For instance, they will often give away jewelry cleaner to people when they visit for the first time, or do a jewelry repair for free. This not only shows that the store cares about its customers, it creates a positive experience and will create repeat customers. These value creating situations will cause people to come back in the store and buy things, which will in turn create a profit. I think profit maximization can come naturally if you are customer driven and create value for people who do business with you.