Question

You are thinking about launching a new line of hats. You need to decide whether to make your hats relatively similar or different from other hats that are currently being sold. Other than considering consumer preferences, what strategic consideration should you consider in choosing how much to differentiate yourself from other hat sellers/milliners?

Answer 1

While launching a new line of Hat, to decide whether we need to keep the hats similar or different from other hats, the strategic considerations apart from consumer preferences are-

1. Product- You will have to consider if making any changes in the product is adding any value to the product with respect to the consumer. This is because if there is no value addition/differentiation which is values by the customers, it won't be of any use.

2. Market: You will need to consider which kind of market exists for hats. If there are too many competitors, then it would be a perfect competition and the market would definitely be very price sensitive. Hence, making a lot of customizations in the hat will lead to an increased cost and will not be beneficial if it is a cost-sensitive market.

3. Technology: You will have to consider if you have the right technology to make the desired changes in the hat and if the technology is available, it should also be economically feasible to use that technology.

4.Production Capability: It is very important to consider the production ability of your plant since that will decide what amount of changes can be done in the hat. If the changes require a lot of effort, it will result in less production and hence again, it will not be a profitable option for the producer.

5. Finances: It is very important to evaluate the finances associated with the production of hats. It will make sure that funds are available regularly as per the business requirements. Also, profit calculations for each type of hats need to be considered in order to decide the kind of hats you wish to produce.