MGT 200 Lecture Notes - Lecture 8: Cash Cow, Business Analysis, Market Failure
Document Summary
Development of a product that is closely related to existing products in the line but meets different customer needs. Less expensive, low risk- focus on same or new segment. Many new products are actually just line extensions. Product modification a change in one or more characteristics of the product and elimination of original product from the product line. Product must be modifiable, must be able to perceive modification has been made and meets customers" needs: quality- change in material or production relation to a product"s dependability & durability. Reduce quality to offer lower price and increase quality to gain competitive advantage: functional- affect versatility, effectiveness, convenience, or safety- redesign of product, aesthetic changes to the sensory appeal of a product. New product = new product + modified product + never been available + distributed in new market. Benefits- enhances product mix, increases depth in product line, attracts new customers. Risks- expensive to develop, creates risk, loss of market share.
