BBM's managers are attempting to build a new product, a better mousetrap. They began by determining the features customers wanted and what they would pay for those features. BBM's engineers then reverse-engineered a competitor's product to understand its design and related production processes. Their analysis indicated that customers would pay $10.00 for a better mousetrap. Why was it important for BBM's engineers to understand the product design and production processes of its competitor?
A) Most of the mousetrap's product costs are committed by that point in the value chain
B) They needed to explain them to customers to justify the better mousetrap's cost
C) The better mousetrap will only succeed if it is identical to their competitor's product
D) Understanding product design and production processes is not typically important; the engineers just wanted to better understand the process.

Question

Quizplus · Accepted Answer

By understanding the competitor's product design and production processes, BBM's engineers can determine what improvements can be made to the product without significantly increasing the production costs. This allows them to create a better mousetrap that can be sold at a price point that customers are willing to pay, which is important for the overall success of the product. The committed costs in the product value chain mean that any changes to the design or production process after that point will potentially result in additional costs that may make the product unprofitable.

BBM's Managers Are Attempting to Build a New Product, a Better