Table of Contents
Product distinction may be achieved and maintained through frequent changes in product design. In this regard, marketing executives have to take two important policy decisions viz.,
- The frequency with which the product is required to be changed; and
- The extent to which product design. should be protected from being imitated by the
The decision pertaining to change in product design is quite costly, for it involves huge expenditure on the part of production, R 8r. D., market research, testing and tooling sections for the redesigned product. Even for a simple product like a gas stove or cosmetics, the preparation of rupees. For such sophisticated complicated products as computers, automobiles, etc. the preparation expenses are quite substantial; and they rise if the product is changed frequently. Also the cost of inventories goes up, for enough stock of the old product is required to be maintained to feed the existing demand, and a higher inventory level of the new products is required to cope with the uncertain demand for them. There are also many problems of distribution at various levels with wholesalers, retailers and, at times with customers.
The production of a new model often leads to wide fluctuations in the inventory levels of manufacturers. If they want to keep the channels well stocked, they have to accept old stocks or provide price concessions to wholesalers and retailers. The service problem, too, is accentuated by a change in design, for the service staff of both producers and middlemen are forced to refurbish their technical expertise. Finally, more competent and trained staff are required to deal with production problems. But how-so-ever risky or costly a product redesign decision may be, a manager cannot ignore the pressure of changes. In fact, SAT changes force companies to change their design so that they may best satisfy customer needs. The electronic revolution of the present century has sounded the death-knell of radios, transistors, etc., by flooding the market with such products as videos, cassette players, TVs, etc. In industries like textiles, electronics, ready-to-wear garments, and domestic appliances, changes in product design have become a focal point of marketing strategy.
It goes without saying that a change in the product design helps in breaking down sales resistance, reducing emphasis on price, and assisting the sales personnel in achieving a high sales target.
A company’s policy in respect of product decision protection is closely linked with its policy of frequent design changes. In certain industries such as textiles, women’s apparel and electronics, the pace of change is quite rapid. It is not, therefore, feasible to protect a new design. However, in industries where design changes are less frequent or rare, a legal protection of product design is both practical and desirable.
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