Understanding how the factors of production include marketing can be the difference between success and failure for many businesses.
Investopedia defines “Factors of Production” as: “An
economic term to describe the inputs that are used in the production of
goods or services in the attempt to make an economic profit. The
factors of production include land, labor, capital and
entrepreneurship.” And Princeton University adds this to the definition,
“Recent usage has distinguished human capital (the stock of knowledge
in the labor force from formal education and job training as part of
Brian Gentile, CEO of Jaspersoft, a provider of business intelligence software, stated in a Oct 2011 article in Forbes, “Sometime even prior to this new millennium, the primary factors of production have now assuredly become: Time, Information and Capital.”
This Is How The Factors Of Production Include Marketing
Entrepreneurship is considered a factor of production because economic resources can exist in an economy and still not be transformed into an exchange of consumer goods. Entrepreneurs traditionally have a good grasp on how to create a valuable good or service, as well as taking on the risk with transforming economic resources into consumer products. Entrepreneurship is also considered a factor of production since someone must complete the managerial functions of gathering, allocating and distributing economic resources or consumer products to individuals and other businesses in the economy. Without marketing, there is no high level of exchange and allocation of those goods and services into profitability.
Market Research Is The Keys To Increasing Production
Market research allows you to narrow in on your potential customers that will potentially want your product. Even small businesses can benefit from such research, thus giving them an edge over other competitors in their local market. Accurate market research and data greatly reduces business risks and helps identify sales opportunities. Smartly conducted research can also pinpoint current challenges and potential problems in the current market to develop your marketing plan.
Effective Marketing Begins The Boom In Production
One of the most common omissions in any business plan is how to generate enough clientele. Many SMB owners believe that their better idea will spread due to its own merits. Moreover, they believe that word of mouth marketing (WOMM) will carry them above the make-break point, yet never grasp that WOMM is a very intricate and proactive strategy.
A strong marketing strategy must be conducted to develop and sustain continued viability. I have helped numerous businesses over the two decades that I have been a C-level executive. Contact me if you need assistance with your marketing strategy.