Question

how do producers determine what type of differentiation to introduce? Moreover, do "quality" and "new idea" features always succeed in every market? What determines their success?

Answer 1

There is no single for success. No producers can foretell which product will be successful and which wouldn’t. A product which is successful in one market may not be successful in another market. In addition, a product that is already successful in the given market may not bring equal success for another company even when launched in the same market with very similar or even improved features. The producers keep experimenting with their product line. Some of the methods to determine which product to introduce in a market are as follows-

First mover- introduce a completely new and innovative product in the market by conducting R&D.

Market study- study the trends in the market, user preferences, market gap and introduce a new product that may not have been introduced in the marker before. Some methods to conduct these studies are- closed study group experimentation, expert opinion, trial introduction etc.

Replication- introduce a product which is already successful in one market into a new market

Benchmarking- copy and replicate the product of an already established and successful leader in the given market

Following the leader- study what products are leaders in the market and then introduce a similar product if the company does not have a similar product

New and improved- improvise an already established product of the company and market it under a new brand name

Past trend- study what product had been successful in the given market in the past but is not being sold currently due to multiple reasons and then introduce again under different market conditions

There is no guarantee that a superior quality product or an innovative product will always be successful. The producers have a better view of what are the strong holds of their company internally and externally. They use this information to determine what type of product they want to introduce. They could be the market leaders and trendsetters by introducing a totally new product; or they could be successful copiers wherein they will copy an already established and successful product in the market and introduce in under their brand name; or they could have cost advantage and introduce an already established and successful product at a much cheaper cost. A company will try to stay within their strong holds and is more likely to be successful in a familiar territory for the company than an unknown territory. A company that has focus on R&D and wishes to have a first over advantage or a blue-sky market will try to introduce a new product in the market either by innovation or by copying it from some other market. On the other end, a company which has a very strong manufacturing advantage could try to replicate an already established product and market it at a much lower price thus, having cost as their differentiator.