FINAL EXAM/Fall 2016 (5 marks) #4 The company wants to develop a new product to
ID: 380896 • Letter: F
Question
FINAL EXAM/Fall 2016 (5 marks) #4 The company wants to develop a new product to preemptively enter the marketplace. Current information from marketing is sketchy and the market size cannot be predicted accurately. Indications are that foreign imports are about to foray the market, causing the company to lose the precious opportunity of preemptive entry (a) Should the company initiate a product development program now or wait for more marketing information? Discuss your answer with supporting argument (b) Are there other options available to the company? Discuss the pros and cons of each option.Explanation / Answer
a) The company should initiate a product development program now otherwise it would miss the first mover advantage. As there are no products available in the home market which is shown by lack of information, it would make sense to develop and launch the product now. Since imports are imminent, one could surmise that the market is attractive to foreign players. If it were not attractive, foreign players won't export their product.
b) The other option available is to study another market from where the imports are expected to happen. All the data available for that market can be collected and then the market size of the home market can be estimated by comparing the size of the economy using the variables such as GDP, GNP per capita, etc.
The company can also conduct a research on a similar product in some other industry of the home market if information is available. It can also try to gauge from the market whether there is a hidden need in the market for the product by talking to would be cutomers, experts and consultants.
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