ECONOMY

Time for Greek firms to adopt a broader view of what it takes to be competitive

Professor Giorgos Avlonitis thinks that on the whole, Greek firms have not got it quite right. «They are trapped in their economic theories, believing that productivity gains – more products with the same, or even fewer, but qualitatively higher, factors of production – contribute to restricting costs per product unit, secure price stability in the market and, furthermore, boost the competitiveness of the economy at home and abroad,» he says. Avlonitis is director of the Athens University of Economics and Business’s MSc course, «Marketing & Communication with New Technologies» for business executives; his department celebrated its 10th anniversary this week. He explains that such views prevailing among Greek firms completely ignore the concept of the market, based as they are on the equally erroneous triple axiom, «We produce cheaply, we sell cheaply, therefore, we are competitive.» In this way, he continues, they overlook the really crucial questions such as the market’s absorption potential, and consumer requirements and preferences at home and abroad. «We place emphasis on creating a competitive advantage through low prices rather than through an effort to understand and meet the clients’ requirements with quality brand names at higher prices. I believe it is time to stop linking the competitiveness of our products with their price – particularly in foreign markets,» he insists. Avlonitis says the fixation on price is slanted. «Besides price, there are other variables that make a product competitive – quality, design, variety, brand name, packaging, service, effective salesmanship, advertising and sales promotion.» He notes that despite its low-price orientation, Greece has the lowest per capita export income in Europe. «We must get away from simple economic logic and our firms must begin to adopt the basic principles of marketing,» Avlonitis emphasizes. He explains marketing is an entrepreneurial philosophy focusing on the overall operation of a firm, aiming to promote quality, credibility and quick and proper service. «Marketing places the client at the center of a firm’s attention,» he says. In his classic book, «The Practice of Management,» about 50 years ago, management guru and philosopher Peter Drucker said the basic goal of any business is neither sales nor the return to shareholders, but attracting and retaining clients. As a result, a firm has only two functions: marketing and innovation. «No entrepreneurial activity is conceivable without a marketing infrastructure. This should be present throughout the life of the firm and its investment. «Generally speaking, investment decisions must be based on the marketing function, which aims to achieve the best possible twinning of the assets of a firm and clients’ mentality and requirements – but also of its potential clients,» Avlonitis concluded.