Question

Now, assume that the tennis racquet manufacturer has been very successful in manufacturing and marketing a single line of inexpensive tennis racquets, aimed at beginners and casual players.

The manufacturer’s current distribution channel is through large discount retailers, such as Kmart and Walmart. Recently, three major sporting goods chains also began to carry the racquets. The company puts most of its promotion budget into sales promotion to the retailers and into in-store displays. The competitive advantage for this company is its low price for good, sturdy tennis racquets.

The company wishes to expand its operations, either with new products or in new customer markets. Answer the following questions:

1. What are some possible new products for this company?

2. Do these products fit the company's image? Explain why/why not.

3. Does the firm have the technological or production expertise needed for these products? Explain why/why not. If a product is introduced and fails, what effect (if any) will the failure have on the company and its other products? Explain your answer.

Answer 1

1) The company may expand into selling different products like tennis balls or economic apparels for tennis players.

2) YES, These products fit the company's image as the company's image is to provide low price, good quality goods for its customers and providing affordable products and expanding its range fits the company's image

3) The firm may or may not have the technological or production expertise needed to create these products eg- here tennis balls need different technique and different production methods than tennis racquets hence the professional help will be needed in that aspect. And as far as the apparels range is concerned a professional and technical opinion will also be needed on that to expand into that department.

If a product is introduced and it fails then it could be due to many reasons like a)Failure to Understand Consumer Needs and Wants b) targetting the wrong market or due poor execution for the introduction of the product. This could lead to the company suffering losses and may not earn long run profits. The company's image could suffer and the reputation may be spoilt, the company could lose its customers because the customers may lose faith in the company's products and the revenue income will decrease. To recover from this the company should try to relaunch the product with some new features, additional benefits and promoting it more aggressively this time. Expanding the customer base and trying to reach to maximum clients possible. Understanding their expectations and learning from past mistakes.