Quiz 12: Developing and Managing Products
Car Waxing is very tough and time-taking process. The test market for the new product would be an area which is a car care market. This area would provide immense opportunity for the exposure of the product. All the dealers from car care market will be invited for a test performance of the new product i.e. SW car wax. All the features of the product will be explained to the dealers. A small presentation on how the product is different from the competitors and the conventional technique to enhance protection is also communicated to the customers. The product gives sparkling finish to the car which is a onetime application and gives lifetime finish.
It is important for a business to develop new products and increase the number of product offerings to increase sales, improve ability to cater varied demands, and survive competition. Enhancing product mix can offer competitive edge to the company in the market. Product mix is the type and number of the product offerings by the company. For example; a fast food outlet offers snack, meals, beverages, and pastries. This is the product mix of the food outlet. It is important for C Inc. to develop new products on regular basis for various reasons. Some of the reasons are mentioned below: • Helps spread the risk - Adding new product to the product line helps the company to spread the risk on all products and not just rely on one product. • Diversification - Developing and launching new products helps the company diversify and expand. For example; a food outlet may offer Wi-Fi, play games in game-zone while waiting for the order etc. • Cater to varied needs - When a company offers more than one product, it enhances its ability to be able to cater to a large number of customers and help manage economies of scale too. • Gain customer trust - Extending the existing product line helps the company to gain trust of the customer. As the customer's association with the main or first product is already done, it will be comparatively easier to communicate benefits of the new product. • Gain brand visibility - With multiple product offerings, customer will be able to relate with the brand better. These were some of the reasons C Inc should regularly add new products to its offerings.
A line extension refers to adding a new item in the existing product line. For example, adding diet coke in the list of coke. Line extension provides a development over the product but is designed to meet the specific requirements of customers. On the other hand, product modification refers to the revision of updation in an existing product on the basis of customer feedback or any flaws in design of the product. Product modification can be done by changing one or more product's characteristics whereas line extension requires removal of the original product from the line. Modification in the product is less risky as compared to line extension.