ADM 2320 Study Guide - Brainstorming, Starbucks, Product Design

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lavendercicada601

9 Jul 2014

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Document Summary

Product: anything that is of value to a consumer and can be offered through a marketing exchange. New market offerings provide value to both firms and customers. Innovation: the process by which ideas are transformed into new products and services that will help the firm grow. The longer a product exists in the marketplace, the more likely it is that the market will become saturated. Without new products or services, the value of the firm will ultimately decline. Through innovation, firms often create a broader portfolio of products, which helps them diversify their risk and enhance firm value better than a single product can. In industries that rely on fashion trends and experience short product life cycles including apparel, arts, books, and software most sales come from new products. New product introductions, especially new-to-the-world products that create new markets, can add tremendous value to firms. These new products, services, or processes are called pioneers, breakthroughs or disruptive .

Related Questions

Explore how firms in monopolistic competition differentiate their products or services to generate a market niche and gain more control over their pricing. To what extent can product differentiation create barriers to entry? How can product differentiation help firms to increase their short-run profits? Give an example of a firm in monopolistic competition, and discuss the strategies used by the firm to differentiate itself and perhaps earn economic profits in the short run.