Product Strategies: Prepared By-Abhinay Jain PG 15-15 Kunal Parab PG 15-35
Product Strategies: Prepared By-Abhinay Jain PG 15-15 Kunal Parab PG 15-35
Product Strategies: Prepared By-Abhinay Jain PG 15-15 Kunal Parab PG 15-35
Attributes
Price
Use of application
Product user
Product class
Respect to comepititor
PRIVATE LABELING:
It refers to manufacturing a product under another companys brand name.
Eg. Companies like Samsung and LG manufacture mobile phones for TATA
and RCOM CDMA phones
DEALING WITH ORIGINAL EQUIPMENT MANUFACTURERS(OEMs):
A company may sell to competitors the components used in its own product.
This enables competitors to compete with the company in the market.
Eg. Carl Zeises make lenses for SONY, Nikon Cameras.
The product scope strategy deals with the perspective of the product mix
of the company. It is determined by taking into account the overall mission
of the business unit.
SINGLE PRODUCT STRATEGY:
The business unit only has one product and tries to live on the success of
the one product.
Concentration on a single product leads
to specialization which helps achieve economies
of scale and profitability gains. Its main advantage
is profitability.
Eg. CEAT Tyres
MULTIPLE PRODUCT STRATEGY:
To cover the risk of potential obsolescence of a single product by adding
additional products.
Eg. Seagrams
product development is an essential activity for companies seeking growth. By adopting the new product
strategy as their posture, companies are better able to sustain competitive pressures on their existing products
and make headway.
The three alternatives are
PRODUCT IMPROVEMENT MODIFICATION:
It is the introduction of a new version or an improved model of an existing product.
Eg. Autodesk
PRODUCT IMITATION:
The imitation strategy means that it transfers the risk of introducing an unproven idea/ product to someone else.
It also saves investment in research and development. This strategy suits companies with limited resources.
Eg.
PRODUCT INNOVATION:
It includes introducing a new product to replace an existing product in order to satisfy a need in an entirely
different way or to provide a new approach to satisfy an existing need.
This strategy suggests that the entrant is the first firm to develop and introduce the product.
Eg. 3M, Red Chief Shoe
DIVERSIFICATION STRATEGY
Diversification refers to seeking unfamiliar products or
markets or both in pursuit of the growth.
It is a risky strategy and the company should choose this
path only when current product does not seems to provide
further opportunities for growth.
It has three alternatives
CONCENTRIC DIVERSIFICATION:
It means the products introduced bear a close synergistic
relationship to either the companys marketing or technology,
or both.
Eg.
HORIZONTAL DIVERSIFICATION:
New products are unrelated to existing ones but are sold to the same customers.
Eg. Vijaya dairy products
CONGLOMERATE DIVERSIFICATION:
The new product bears no relationship to either the marketing or technology of the
existing product(s).
In other words we can say that a company launches itself into an entirely new p
roduct/ market.
Eg. HIRA GROUP
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