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The Determination of Product Objectives

13 May, 2016 - 13:23

There are a great many objectives that relate to the product management effort. Rather than attempting to provide a complete list, a discussion of the most common product objectives will provide an adequate illustration.4

It is safe to conclude that a universal objective is growth in sales as a result of the introduction of a new product or the improvement of an existing product. Certainly, there is little need to engage in either product activity unless this objective is present.

An objective related to growth in sales is finding new uses for established products. Since this process is generally easier than developing new products, the search for new uses of older products goes on endlessly. For example, Texas Instruments has found numerous uses for their basic product, the semiconductor.

Using excess capacity is another commonly stated product objective. This objective is prompted by the rapid turnover of products and the resulting changes in market share. Of course, such utilization is always a short-run consideration. In the long run, only those products that can generate a continuing level of profitability should be retained, regardless of the problem of excess capacity.

Maintaining or improving market share may also be an objective shared by many companies. In such cases, the emphasis of the firm is on their competitive position rather than attaining a target level of profits. Creating product differentiation is often the primary strategy employed to reach this objective.

Developing a full line of products is another typical objective. A company with a partial product line may well consider the objective of rounding out its product offerings. Often, the sales force provides the impetus for this objective in that they may need a more complete product line to offer their customers or the resellers themselves may request a greater assortment.

Expanding a product's appeal to new market segments is a common objective. John Deere is attempting to increase its small share of the consumer power products market by aiming at suburbanites and women farmers. They have introduced a series of redesigned lawn and garden tractors, tillers, and snow blowers that are easier for women to operate.

Although this represents a limited selection of objectives, it does suggest that there must be a reason for all product-related activities. These reasons are best expressed in the form of specific objectives.