MTK 100 REVIEW.docx

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Department
Information Technology Management
Course
ITM 100
Professor
don'tremember
Semester
Winter

Description
Sanameet Sahota MTK 100 REVIEWSo what is marketing Marketing is responsible for the product development process and the direction of research and development that creates such innovation and creative destructionGLOBAL TRADING SYSTEM DYNAMICS New Supply Source Retailerdistributor discovers a new global source of supply Reduced transaction costs and better service New communication and transportation technologies reduce transaction costsLow labor costs and quality and ontime delivery assurance contracts make supplier attractive Trading alliance with new source formed Retailerdistributor develops a trading alliance with new source Pressure exerted on existing alliances to innovate and match benefits Domestic and global sources in existing trade alliances come under pressure to innovate to reduce prices and increase services Profits increase and prices to consumers are lower Retailerdistributor profits increase and or consumer prices drop in very pricecompetitive markets Domestic manufacturing output contracts Domestic manufacturing output contracts as profits are lowered by global competition Demand increases for lower priced goods Retailers and shareholders reinvest profits or invest in manufacturing and services insulated from global competition or leading global competitionDemand increases generally for all goods as a result of falling prices an income effect and in particular for the lower priced goods a substitution effect Employment in manufacturing sectors exposed to fierce global price competition shrinks Sectors that are insulated such as health care benefit from lower supply pricesOther sectors that lead the world in production and manufacturing innovation such as pharmaceuticals aerospace and forest products flourish If the net effect of shifting investment and employment is a recession then the retailing distribution sector will react to reduced sales by seeking more global suppliers who will reduce cost of goods soldIf they do not competitors will and they will gain market share And so the cycle repeats New Supply Source Retailerdistributor discovers a new global source of supply Page 1 of 24Sanameet Sahota PRODUCT INNOVATION LIFECYCLEINTRODUCTION When a new innovation is introducedlaunched the variance in the supply offering increases but demand may not change much Sales of the new innovation are low despite a lot of effort teaching potential consumers about the advantage of the innovation changing their preferences and changing demand The market is fermenting Sometimes demand never takes off GROWTH But when demand does takeoff supply has to greatly increase to keep up with demand Imitators enter the market with their variation of the product innovation and supply but it is often standardized around a dominant design Diffusion of the new innovation occurs through greatly expanded distribution reach Advertising is about competitive comparisons Profits are greatest It is happy times for most suppliers MATURITYAt the maturity stage there is little product design improvement and supply does not appear to change much Market shares stabilize around Brand loyalty and the rate of change in demand and supply greatly decreasesPrice competition increases particularly as suppliers innovate on production process cost reduction Page 2 of 24
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