The Key Aspects of Product Proliferation - Essay Example

Running header: Product Proliferation Student’s Name: Instructor’s Name: Course Code & Name: Date of Submission: Product Proliferation Product proliferation is the introduction variations of the same products in the market. Product proliferation is an emerging trend which is inevitable in marketing and manufacturing strategies in today’s competitive world (Xia 2008, p 6). Product proliferation is achieved by integration of various aspects into the products for instance different flavors, color combinations, specific features and many other strategies. Product proliferation is more than often used by organizations with an aim of capturing a more market share. This is due to the fact that each variation is likable by a specific type of people. In fact, product proliferation is a means of a targeting strategy. The producing organization accesses the needs in the market and tries to cater for them by producing products which fit the consumers in that specific target group. Normally, the organization looks at the gaps and loopholes which competing organizations have not been able to fill. Product proliferation has numerous advantages which include increasing the consumer selection base, enabling an organization to survive in a competitive environment and increased publicity hence broadening the market base (Bertini, Wathieu & Iyengar 2011, p 7). However, product proliferation should be done strategically. This is because unplanned product proliferation can lead to the cannibalism of the existing product line in the market. Cannibalism of the product line in this context refers to the decline/ demise of the product. In such a scenario, instead of an organization increasing its market share, the organization finds itself in a losing end hence disadvantaging itself. Product proliferation leads to the confusion of the consumers hence making their selection a hard task. Product proliferation therefore needs to be planned and strategic so as to achieve its objectives. The paper is a discussion paper discussing the question ‘Product proliferation can sometimes also lead to cannibalization of the existing product line of the company and should be justified by overall increase in market share’. The paper is being done as an assignment. As pointed out earlier, product proliferation can lead to various disadvantages to an organization. In a bid to expand the product variations in the market, product proliferation can lead to cannibalization of the existing product line. This happens when strategic product proliferation is not carried out by the marketing and production departments of a company. The constant factor that should be put under consideration while considering product proliferation is the market share. Without a broad and stable market share, an organization is more likely than not to harm its existing product line. There are various reasons for this as discussed below. Quality control becomes hard to manage and sustain when a company is producing many variations of the same product. When a company introduces a new variation in the market, it must alter its production line so as to favor both the previous product and the new product. This means that the company has to alter its production processes and may be forced to add/ remove some component in the production line. In the case of a production line which was specifically constructed for a specific product, proliferation leads to the altering of quality of product produced by the production line (Koss 2010, 61). Product variation also means that the company must purchase new machinery and add it on to the existing machinery so as to support the variations of the product. If the company fails to enjoy a broad and solid market share, proliferation is more likely to lead to the cannibalism of the existing product line. In such an instance, the organization loses its market due to poor quality or runs at a budget deficit which may lead to loss due to unplanned and un strategic market proliferation. Product proliferation makes it easy for counterfeiting of products of a certain company. Often, unplanned product proliferation bombards the market with numerous products. Rival production companies which may be wishing to enter into the market but do not know how to venture may opt to producing products which bear the name, features, logo or at times small alterations of another company’s brand hence counterfeiting the products of a company. This happens in instances where a company has produced many variations of its products but has failed to manage the variations due to unforeseen circumstances. For instance product proliferation has resulted to counterfeiting of dental products (Christensen 2011, 90). In cases where the company does not enjoy a stable and growing market which is able to distinguish the company’s products from the many products at their disposal, instances of the customer buying a counterfeit product are high. To avoid such instances, a company must make sure that it is able to manage its product line in the market so as to reduce instances of their products being counterfeited (The economist intelligence unit 2011, p 34). Many products are introduced into the market for reasons which are aimed at benefiting the company other than the consumers. A research by the economist intelligence unit revealed that 60% of companies introduce new products into the market because of competitors other than because of consumers. 31 % introduce new products due to pressure from the middlemen .The introduction of new products in the market should be instigated by the needs of the market. A growing market usually comes with new preferences and new demands which eventually lead to proliferation by a company. If a company does not enjoy a stable growing market, introduction of new products into the market will certainly lead to consumer confusion hence leading to the demise of the existing product line. For this reason. A company should carry out a professional market analysis so as to figure out what the market needs and the best way of meeting the needs without causing undue harm to the existing market and product line. A growing market demands for specification of products not aggression of product bombarding into the market. The rate at which a company introduces new products into the market should be directly proportional to the rate of market growth. With due respect to the fact that a growing market will certainly necessitate product proliferation, it is sometimes wise for accompany to sit back and analyze the market before it releases a new band into the market. This forms the success story behind Mercedes Benz, a renowned car brand in the world. The car has to maintain its might and prowess in whichever instance hence the production and marketing departments venture into the product proliferation with the caution it deserves. If the company released a new car series after every 3 months, it could have caused a disaster to the already released car brands hence leading to cannibalization of old models by the new models. The company practices product proliferation at the best since it must cope up with the existing market demands and trends in a bid to be able to reach its customers and provide them with the latest speeds, technologies, comfort and many more demands (Autostar 2011, p 28). This can be evidenced by the Mercedes Benz model of 2000 and the S class of 2010. A big difference exists in the two models a can attest to this. This is only possible because the company enjoys a growing market which is able to support the products the company offers in the market. In conclusion, product proliferation has many advantages to a company. But product proliferation needs to be conducted in the most professional manner possible. The rate of product entry into the market should be made against a countercheck of various factors. First the market, a company should be able to analyze the market structure. Here, the company identifies key elements in the market which need to be addressed for example the supply and demand trends. This enables the company to be able to adjust the production to fit the requirements of the market. Product proliferation may set in at this instance so as to enable the company fulfill specific needs of the customer. The market share and expansion should be put into consideration. With the right analysis, the growth of the market can be established. Future expectations and prospects of the company can also be established hence making it easier for accompany to predict the performance of a product that is to be introduced into the market. The nature of the market should also be put into context for instance monopoly and oligopoly. Each of the market structures demand for a different approach in product proliferation and this should be put into context when creating product variations. Lastly, a company must ensure that it does adequate marketing on its products so as to create awareness in the market via extensive advertising (Bharat & Scachar 2011, 2010). Indeed, product proliferation can lead to cannibalization of the already existing product line of a company if the company does not enjoy a growing market. References Autostar ,2008 . Automotive Industry to Establish New Open Standard for Electronic Architecture, Autostar , vol.25, no 2, pp 23-45 Bayus, B & Putsis, W, 1999. Product Proliferation: An Empirical Analysis Of Product Line Determinants And Market Outcomes, Marketing Science , vol. 18 no. 2, pp. 137-153 Bertini,M, Waitheu, L & Iyengar, S.2011. The Discriminating Consumer: Product Proliferation and Willingness to Pay For Quality, (1st Ed.) London Business School Bharat, A & Scachar, R, 2011. Advertising The Matchmaker, The Rand Journal of Economics, vol 42, no 2, pp 208-245 Christensen,G, 2011. Are You Using Gray Market Or Counterfeit Dental Products?, Oral Health. Vol. 101, no. 3, pp 86-93 Koss, P, 2010. Product/ Package Proliferation, Beverage World, vol.129, no. 13, pp 61-62 The Economist Intelligence Unit, 2011. Managing The Challenge of Product Proliferation, The Economist, vol. 67, no.2, pp 12-45 Xia, N, 2008. Managing Product Variety in a Competitive Environment. University of Southern California 2008 Read More