Emmanuel AhoulouVineet Kumar Tyagi

Tatiana SerranoXingang Yu

How quality is defined?1.Greater conformance to product specifications-----high market share.2.Superior or more expensive features-----low market share.

RELATIONSHIP BETWEEN PRODUCT QUALITY, PROFITABILITY AND MARKET

SHARE.

•A broad product line can reduce the chances of market share erosion.• The relationship

between product line breadth and profit is

equivocal.

THE IMPACT OF PRODUCT LINE BREADTH ON MARKET SHARE AND PROFITABILITY

VERTICAL INTEGRATION

Expenditures can be referred to the cost of companies for acquiring the inputs and manufacturing a product.

Is a firm’s acquisition of the control of the different stages of production process from the earliest processes of raw materials to the distribution of the final products.

There are two types of vertical integration: • Forward• Backward integration.

EXPENDITURE AND COMMUNICATION ELEMENTS

The marketing communication elements are a specific mix of advertising, personal selling, sales promotion, public relations and direct marketing, a company uses to pursue its marketing objectives.

Advertising refers to any form of paid of non-personal presentation of ideas, goods or service by an identified sponsor.

Sales promotion refers to the short-term incentives to encourage the purchase or sale of a product or service and others.

Personal selling refers to the presentation by the firm’s sales force for the purpose of making sales and building customer relationships.

• Favorable effect on market share to the extend that they satisfy customer needs better than the existing goods and prevent competitors from taking away business's customs with their own new products.

• New products and profits are positively related in the long term.

• New products and profits are positively related when consumers are willing to pay a price premium for superior new products that cannot be readily duplicated by competitors.

• New products cannibalizes the sales of existing products and consume the marketing resources that would otherwise go to them.

• There is evidence to suggest that new product introductions could hurt business profits in the short run.

• They require large investments in R&D, plant, equipment, advertising, promotion and investigation.

POSITIVE

NEW PRODUCTSNEGATIVE

RESEARCH AND DEVELOPMENT EXPENDITURES

This field, is concern with product innovation and process innovation, trying to endow the business with competitive advantages.

Innovative new products and improvements in existing products resulting from R&D are less likely to be vulnerable to price wars and more likely to command a price premium.

It has a long run results.

The question is addressed by examining whether

standardization is better than adaptation in a company.

PRODUCT

• Production economies of scale.• Economies in research and

development.• Stock cost reduction.• Consumer mobility.• Create world wide uniformity.• Psychological meaning.• Consistency with customers.• Improved planning and control.• Synergetic effects.

• Meet differences at the stage of development, consumer differences in taste, needs, wants, socio cultural differences, lifestyle, consumer perception, beliefs and consumer practices, physical environment, etc.

• Meet differences in technology.• Psychological meaning and the effect

on the consumer.• Meet standards required.

PRICE

• Better control.• Price uniformity and

consumer mobility.

• Meet development stage differences.

• Meet exchange rate fluctuation.• Market demand rate.• Meet competition and competitive

practices.• Meet differences in the product life

cycle.• Meet legal and political restriction.

PLACE

• Transfer of experience and efficiency.

• Economies of scale.

• Meet different development stage and consumer buying behavior patterns.

• Meet differences in the physical environment.• Number and size of intermediaries involved.• Meet market size requirements.• Specialization among channels of distribution.• Differences in distribution structures and

patterns.• Meet legal, political and technological

restriction.• Difference in logistical decisions.• Difference in the product lifecycle.• Meets competition and competitive products.

PROMOTION

• Economies of scale.• Consumer mobility and

consistency with customer.• Create world-wide uniformity.• Synergetic effects.• Psychological meaning.

• Meet differences in the physical environment.

• Meet legal and political restrictions, • Meet development stage differences.• Meet exchange rate fluctuation.• Market demand rate.• Meet competition and competitive

practices.• Meet differences in the product life

cycle.• Meet legal and political restriction.

PEOPLE, PROCESS AND PHYSICAL

• Achieve consistency with customers.

• Offer universal appeal message and image.

• Achieve a strong corporate identity.

• Allow better identification by customer.

• Motivate and empower employees.• Allow flexibility in meeting consumer

non-identical needs and requirements.

• Meet local competitive practices.

Reasons for adapting and their level ofImportance UKhttp://www.businessperspectives.org/journals_free/im/2007/im_en_2007_04_Vrontis.pdf