The product research and development essay
The product research and development and changing the pricing of the product is very important for the successful marketing performance of the company and maintenance of the competitive position of the product in the market. In this regard, company should introduce improvements that can make the product better and more attractive for the target customer group. Therefore, the policy conducted by Joe was absolutely erroneous, as he failed to introduce any changes in the product and pricing. In such a situation, the major task of the new VP is to upgrade the products of the company to enhance their competitiveness in the market and to accelerate the business development of the company.
On analyzing the financial performance of the company in the course of last five years, it is important to place emphasis on the fact that the company has deteriorated its performance since 2010. In this regard, it is possible to distinguish different reasons for the deteriorating financial performance. For instance, the lack of investments in research and development of the products of the company, the unchangeable pricing policy of the company and deteriorating competitive position of the company’s products are among the major reasons for the steady deterioration of the financial performance of the company. Therefore, the focus on these key issues is crucial for the further successful business development of the company.
In fact, the product development has stopped in recent years. Products X5, X6 and X7 have not been improved since their introduction in 2010 till present, 2015. This means that the product has not been changed since 2010. At the same time, it is obvious that technologies have made a considerable progress in the course of four years. Therefore, the company has started to drop behind its major rivals because its product remains unchanged. At this point, the customers also grow dissatisfied with the lack of any changes in the products of the company. The company can perform successfully only on the condition of steady and regular improvements of its products. The lack of investments in research and development increases the gap between the company’s products and those of its rivals. As the company has failed to invest in research and development because of Joe’s policy, products of the company become less competitive. Moreover, customers are dissatisfied with the quality of the products sold by the company. The lack of upgrades of the products makes the products out of date.
At this point, it is worth mentioning the fact that customers’ needs change in the course of time, but products fail to meet these changes as products do not change. As the company has failed to upgrade its products, they fail to meet customers’ needs and changes in customers preferences. In such a situation, customers naturally turn their attention to other products which are more up-to-date.
In addition, the lack of investments in research and development and the lack of changes in the products of the company raise the problem of the declining quality of the products. What is meant here is the fact that products may have certain drawbacks, when they are just introduced. In such a situation, improvements have to be introduced to eliminate drawbacks that may be identified at the beginning of using products by customers. Therefore, in 2016, the company should focus on the complete upgrade of its products that means that the company should boost its research and development and introduce improvements that would make its products X5, X6 and X7 more competitive in the market.
Furthermore, the pricing of products has not changed as well. The company starts losing its revenues since the unchangeable pricing fails to take into consideration expenses of the company and the growing inflation rate. The company should conduct flexible pricing policy and change its price respectively to the current situation in the market. Until firing, Joe refused from changing the pricing of the company’s products that naturally led to substantial financial losses of the company. On the one hand, the company failed to set the objective marketing price that would mirror the current situation in the market and economy. For instance, the price of the products fails to take into consideration the inflation rate, which has grown in the course of four years. On the other hand, some products were sold at the price, which was higher than the price of its rivals because they were of the higher quality compared to products of rivals. However, in the course of time, the difference has disappeared, while the price remained unchanged that made the price irrelevant to the actual position of the products in the market. More important, the buying power of customers changes too and the pricing policy of the company should meet the buying power of customers. As Joe ignored changes in pricing of the company’s products, the price of products is currently set regardless of the buying power of customers. As a result, sale rates of the company drops as well as revenues. In such a situation, there is a risk that the company would lose its loyal customers.
The performance against competitors deteriorates as the major rivals of the company upgrade their products and offer customers more up-to-date products of a higher quality. Moreover, products fail to meet customers need that change in the course of time that deteriorates the marketing performance too. The competitive position of the products deteriorates and so does the performance of the products against products of the major rivals of the company. In this regard, the lack of upgrades and ineffective pricing policy are major factors that undermine the competitiveness of the company’s products in the market.
In such a situation, the company should focus on substantial investments in research and development in 2016 because the company has to upgrade its products substantially to keep them up-to-date and to make them competitive again. At the same time, the company should also change the pricing policy of its products. In this regard, the price should be lowered, at least for a while, because products fail to match customers’ expectations and they are in a disadvantageous position compared to products of rivals in terms of quality. As soon as products become up-to-date, the price can rise steadily.
Thus, the pricing policy, the research and development and competitive position of the company’s products need consistent changes. Joe’s policy should be totally abandoned and consistent improvements have to be introduced to maintain the competitive position of the company’s products and the company itself. Otherwise, rivals will outpace the company.
