Launching New Product Features, Essay Example

The manufacturing company in this case study has two complementing problems thin profits and selling prices that are not competitive in the marketplace.

One proposed remedy is to launch a new product at the cost of $700,000.00. This investment carries the most risk. There is a large financial investment, but there is also a large time investment in launching a new product. Testing and refining design and manufacturing processes to ensure durability, the development of marketing materials, audience research, sales staff training, and the development of a support channel are variables in the time it will take to bring the product to market. In that same time window, a competing product may enter the market at a different price and force the manufacturer to reconsider their strategy (Thölke, 2001).

Launching a new marketing plan at the cost of $1,000,000.00 is the largest financial outlay. This may help profits by exposing new customers to their products, but it will add overhead, ignoring the problem of products not being price-competitive.

Purchasing a new machine carries the lowest price tag and replaces a relatively fixed cost with another relatively fixed cost, making it easier to predict its impact. It also brings down the cost structure which simultaneously improves profitability and price-competitiveness.

References

Thölke, J. M., Hultinka, E. J. and Robbenb, H. S. J. (2001), Launching new product     features: a multiple case examination. Journal of Product Innovation Management, 18: 3–14. doi: 10.1111/1540-5885.1810003