BUS 343 Lecture Notes - Lecture 10: Comparative Advantage, Product Management, Advertising Age
3 May 2016
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Focus on the expected nature of competition over time, and planning of tactics to manage the product at each stage. Introduction: slow growth follows the launch of a new product in the marketplace & low/no profits. Competition: nonexistent if this is a really new product. Tactics: increase awareness and encourage trial by consumers; secure distribution. Growth rate depends on product adoption factors (comparative advantage, compatibility, etc. ) Growth: the product is accepted and sales and profitability rapidly increase. Competition: growth attracts intense competitor entry (see amazon) Profit margins may narrow depending on competitive intensity. Competition: many competitors objective: retain customers and create niches in the marketplace tactics: look for new uses and users. Decline: sales, profits decrease due to obsolescence or changing customer needs. Must monitor carefully to decide when to exit market. Product management includes building a product line, minimizing cannibalization and alienation. Product life cycle provides a framework for anticipating competitive intensity for a product category.
