With regards to the Marketing Concept, as articulated by Theodore Levitt and Peter Drucker, the standard of value to the business also resides with the individual. When seen from a business perspective, the business must create something that fulfills a consumer value such that the individual consumer assesses the offering and his or her own desire, and makes a choice to become a customer by means of voluntary trade. The objective of the business is to create customers such that each party of the transaction profits. (Explaining how and why such a system works is the task of economics.)
Each of us in our role as a consumer takes a position about what serves our life and our self-interest. The standard of value for the consumer is their desire for a good life as they perceive it. Action is taken constantly by each person through the application of judgment to remove obstacles to improving their life, thereby resulting in the pursuit of values.
People assess their current situation as compared to an imagined better situation, and choose a path or solution that is perceived to be better than the outcome without that solution. In doing so, they weight the pros and cons and assess the costs and benefits. When the value equation is assessed to provide a viable positive outcome, all factors considered, a decision in favour of action is taken, resulting in a purchase and a sale.
For a business, the standard of value must be aligned with the values of the consumer and the alternative options for action they consider viable. Without a clear purpose aligned with a standard of value, business leaders can’t focus on creating value.
The standard of value in business, as in ethics, is human life. Both serve the same end (the pursuit of values by individual actors), which is why inherently, when thought about correctly, good business is ethical business, and requires individuals in their capacity as owners, executives, and employees to focus on the needs, desires, and values of individuals and how the work they are engaged in contributes to, benefits, and promotes human life and the values their customers seek.
Business is about the pursuit of value, and value only resides in people. To breech or ignore this connection to value is to breech the ethical bond inherent in the purpose of a business.
It is important for business leaders to understand and adhere to this ethical connection.
© 2019, Barry L. Linetsky. All Rights Reserved.
Barry Linetsky is a Partner with The Strategic Planning Group in Toronto, Canada, where he and his colleagues have been helping executives and owners align their business purpose with customer values since 1994. Barry is the author of the acclaimed book The Business of Walt Disney and the Nine Principles of His Success (Theme Park Press), and an Honorary Disney History Institute Historian. Barry is a writer, photographer, researcher, and business strategy enabler.