Thursday, July 12, 2012

Product Vs. Service

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What would you rather market, a pure product or a pure service?

I definitely would rather market a pure product versus a pure service.

Why?

In the U.S., a doctor, a stockbroker and a lawyer typically are held in a high esteem due to their profession and potential for wealth creation.

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However, in Europe these service professionals don’t come close to the high regard that the manager of factory. That is because in both Europe and Japan the people understand the power of making a product. That factory creates good paying jobs not only for it’s employees, but also it’s material supplies, its service providers, etc.

When a factory shuts down this can be an economic disaster for the local economy.

Here is an excerpt for the L.A. Times

Importance of manufacturing

Average manufacturing job pays $5,000 more than the average service job

Upward mobility for under-skilled workers

For every one manufacturing job, .5 more jobs are created - the highest multiplier of any sector

High paying jobs evaporated with the closing of Lockheed Martin, General Motors and Hughes Aircraft facilities in the early 0s(L.A. Times, 00)

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(California, 00)

“ .....the Milken Institute provides a new foundation of understanding for a sector of our economy that literally sustains and enhances millions of lives - and yet is widely misunderstood and significantly at risk.”

.....an example, for every job created in the state’s manufacturing sector, an additional .5 jobs are created in other associated sectors. By comparison, it would require more than six times as many service jobs to create a similar standard of economic growth.

.......... also highlights manufacturing’s seldom-considered social significance, including its vital importance to California’s emerging diverse population. Specifically, the report details how the manufacturing sector is a reliable opportunity for unskilled workers, allowing them to climb the economic ladder and achieve a better future. (Milken Institute,00)

In conclusion, the state of California is waking up to its loss of manufacturing jobs and is trying to find a way to stem the losses and eventually regain some.

It would be a good thing for all of America to wake up to the facts of having that manufacturing plant in your town is usually a darn good thing!

References

L.A. Times, Importance of manufacturing, August 7, 00, as retrieved from the web on February 1, 00 at http//www.cmta.net/turning_california_around/index.php

California State Employement Development Department, Manufacturing Employment, as retrieved for the web on February 1, 00 at http//www.cmta.net/turning_california_around/index.php

Milken Institute, Unprecedented Economic Analysis Details Manufacturing’s Importance, 00 as found on the web on February 1, 00 at http//www.cmta.net/press/080milken.php?phpSID=aa6bff1088d8400ad606

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