LONG ANSWERS

1. What is the competitive advantage? How do you achieve through logistics.

The key to superior performance is to gain and hold competitive advantage. Firms can gain a
competitive advantage through differentiation of their product offerings which provides superior
customer value, or by managing for lowest delivery cost .The two means of competitive advantage of
low cost of delivery and differentiation, when combined with competitive scope of activities of broad
versus narrow, result in four generic strategies:

 Differentiation
 Cost leadership
 Differentiation focus
 Cost focus

The differentiation and cost leadership strategies seek competitive advantage in a broad range of
market, whereas, differentiation focus and cost focus strategies are confined to a narrow segment.

i. Differentiation:

A company that pursues differentiation strategy selects only one or just a few of the total choice
criteria that are used by customers of the industry. It then uniquely positions itself to meet these
choice criteria by designing a product that gives a very high level of performance on the chosen
choice criteria, and only a mediocre level of performance on other choice criteria. For example, a
manufacturer of air conditioners may target customers whose choice criteria is ‘rapid cooling.’
Therefore, it designs an air conditioner which ‘cools rapidly,’ but is not very ‘energy efficient.’
strategies raise the average cost of the industry, because players of the industry are providing higher
level of performance based on one choice criteria or the other. But the players can charge premium
prices because customers are getting their desired values. Such an industry will be segmented on
choice criteria, and players will target only one or just a few of the total segments.

ii. Cost leadership:

Cost leadership involves the achievement of lowest cost position in an industry. Firms market
standard products that are believed to be acceptable to customers, at reasonable prices which give
them above average profits. Some cost leaders discount prices in order to achieve higher sales levels.

iii. Differentiation focus:

The company targets a small segment or niche, which has special needs. The special needs of the
segment offer an opportunity to the company to differentiate its product from those of competitors,
who may be targeting a broader group of customers. It designs a product to meet the unique needs of
the customers of this small segment .Therefore, when a company pursues differentiation focus
strategy, its underlying premise is that the needs of its target segment differ from the broader market,
and that existing competitors are underperforming in its target segment.

iv. Cost focus:

A firm seeks a cost advantage with one or a small number of target market segments.
Services/features may be provided to all segments but in some segments those services/features may
not be needed. For these segments, the company is over performing. By providing a basic product, a
company is able to reduce costs more than the price discount it has to give to sell it.
2. Discuss about Supply chain performance indicators

Logistics Key Performance Indicators are defined as the quantitative values used to determine
how efficiently and effectively specific logistics operational goals and objects are achieved by the
company over a certain period of time. Urgent business questions that KPIs for logistics seek to
answer include:

 What percentage of promised shipping deadlines are missed?

 How many customer orders arrive damaged per month?
 How many customers received the wrong order?
 How many customers wait extended periods of time to receive their order because it is
out of stock?
 Am I maximizing the utilization of shipping methods?

If logistics managers fail to measure and keep track of the logistics performance indicators,
customers could end up being so dissatisfied with erroneous, damaged or late packages that they
will no longer be willing to do business with the company. On top of losing business, high
numbers of dissatisfied customers can waylay the company’s marketing efforts by warning away
potential customers with negative online or verbal reviews which can further cause sales to slip.
Utilizing the right logistics key performance indicators can jumpstart a reduction in the number of
dissatisfied customers, thereby improving the company’s overall bottom line.

3. HR & IT Role in Supply chain management

Human Resource Role in scm:

 In the supply chain context, human performance refers to employees’ performance excellence
in meeting expected levels, or performance goals on various SCM-related tasks and activities.
 The expected performance in the workplace by employees is generally dictated by a set of
valid and appropriate expectations and is attained through proper education and training of
employees.
 An individual may not be performing adequately due to a lack of skill or due to inadequate
compliance with procedures.
 Employees are key to the execution of supply chain initiatives, and employee skill and
commitment can be instrumental in improving the firm performance.
 Human performance is crucial to supply chain strategy implementation.
 A firm may have sound supply chain strategies in place but sub-optimal performance from its
employees can easily sabotage the achievement of goals.
 A firm may have developed a comprehensive process for quality control in its manufacturing
processes to meet customer requirements.
 However, if the employees involved in related activities cannot perform as trained, desired
service levels or product quality standards may be in danger.
 Achieving superior human performance in the supply chain activities requires the
development of tacit knowledge of employees, which will enhance the uniqueness of a firm’s
human capital.
 Obtaining this knowledge and skill often involves individual learning processes
 Even the highest levels of automation rely on human performance to function
 People strategically important to a firm’s success, including supply chain performance.
  Supply chain council summarizes all supply chain processes into five key activities : plan,
source, make, deliver and return.
 Plan: Demand and supply planning in SCM is very important.
 But supply chain planning should be based on employees’ knowledge, skills ,experience, and
workplace.
 If there is a gap between the developed plan and the realistic human performance of
employees ,it is almost certain that the supply chain plan will fall short of its expected goals.
 Source: It is important for a firm to have a sound sourcing strategy.
 It is equally important to have capable employees to ensure the procured materials meeting
requirements in quality, quantity and delivery time.
 The sourcing employees’ ability to maintain ideal relationships with different suppliers is also
a key consideration.
 The communication skills and relationships-building capability of a company’s sourcing
employees are crucial for securing reliable and long-lasting supply sources.
 Make: The make step includes production activities, packaging, staging and releasing.
 All the activities involved in these processes are performed by human beings.
 So, Human factors play a crucial role in the activities.
 Deliver: Delivery includes order management ,warehousing and transportation.
 Consistent deliveries are largely dependent on employees’ ability to meet expected
objectives.
 Therefore, excellent customer service can be provided only with capable and dedicated
employees, educated and trained to deliver desired performance.
 Returns: Firms must be prepared to handle the return of containers, packaging or detective
products.
 Relationship management : It is an integral part of SCM.
 Supply chain relationships fall into three categories: Customer relationships ,supplier
relationships ,and cross-functional relationships.
 All relationships are among humans, capable and committed employees are the key in
relationship management.
 Continuous improvement: Any firm that desires to succeed in the long run must be willing
and be able to make continuous improvements.
 For continuous improvements, firms must engage in ongoing organizational learning.
 A firm should not only learn internally but also externally through customers, distributors
,suppliers and others .
 Any organizational learning starts at the individual level.
 It is the employees who are actually engaged in the learning activities.
 There is a need to orient the firm’s employees toward continuous learning for continuous
improvements in SCM.

Role of IT in SCM:

 Information technology is simple the processing of data via computer: the use of technologies
from computing, electronics, and telecommunications to process and distribute information in
digital and other forms.
 Information Technology, or IT, is the study, design, creation, utilization, support, and
management of computer-based information systems, especially software applications and
computer hardware.
 IT is not limited solely to computers though. With technologies quickly developing in the
fields of cell phones, PDAs and other handheld devices, the field of IT is quickly moving from
compartmentalized computer-focused areas to other forms of mobile technology.

Information and Technology: Application In Supply Chain Management

In the development and maintenance of Supply chain’s information systems both software and
hardware must be addressed. Hardware includes computer’s input/output devices and storage
media. Software includes the entire system and application programme used for processing
transactions management control, decision-making and strategic planning.

Recent development in Supply chain management software

1. Base Rate, Carrier select & match pay (version 2.0) developed by Distribution Sciences Inc.
which is useful for computing freight costs, compares transportation mode rates, analyze cost and
service effectiveness of carrier.

2. A new software programme developed by Ross systems Inc. called Supply Chain planning
which is used for demand forecasting, replenishment & manufacturing tools for accurate planning
and scheduling of activities.

3. P&G distributing company and Saber decision Technologies resulted in a software system
called Transportation Network optimization for streamlining the bidding and award process.

4. Logitility planning solution was recently introduced to provide a programme capable managing
the entire supply chain.

How IT can be applied in Supply Chain Management

Electronic Commerce: It is the term used to describe the wide range of tools and techniques
utilized to conduct business in a paperless environment. Electronic commerce therefore includes
electronic data interchange, e-mail, electronic fund transfers, electronic publishing, image
processing, electronic bulletin boards, shared databases and magnetic/optical data capture.
Companies are able to automate the process of moving documents electronically between suppliers
and customers.

Electronic Data Interchange: Electronic Data Interchange (EDI) refers to computer-to-computer

exchange of business documents in a standard format. EDI describe both the capability and
practice of communicating information between two organizations electronically instead of
traditional form of mail, courier, & fax. The benefits of EDI are:

1. Quick process to information.

2. Better customer service.

3. Reduced paper work.

4. Increased productivity.

5. Improved tracing and expediting.

 6. Cost efficiency.

7. Competitive advantage.

8. Improved billing.

Though the use of EDI supply chain partners can overcome the distortions and exaggeration in
supply and demand information by improving technologies to facilitate real time sharing of actual
demand and supply information.

4. What is the Role of price in supply chain

Pricing is a factor that gears up profits in supply chain through an appropriate match of supply and
demand. Revenue management can be defined as the application of pricing to increase the profit
produced from a limited supply of supply chain assets .Ideas from revenue management recommend
that a company should first use pricing to maintain balance between the supply and demand and
should think of further investing or eliminating assets only after the balance is maintained. The
assets in supply chain are present in two forms, namely capacity and Inventory. Capacity assets in
the supply chain are present for manufacturing, shipment, and storage while inventory assets are
present within the supply chain and are carried to develop and improvise product availability. Thus,
we can further define revenue management as the application of differential pricing on the basis of
customer segment, time of use and product or capacity availability to increment supply chain
surplus.

5. Discuss about Collaborative Activities In Strategic Alliance

6. Suppliers & Distributors Benchmarking

7. How warehouse management help logistics

To begin with, right from suppliers to customers and inventory movements, a warehouse management
system (WMS) optimizes all your warehousing operations. Usually, these systems have always been
a part of much bigger and more complex distribution functions. But now, even SMBs are recognizing
the importance of a warehouse inventory management software in today’s scenario of integrated
logistics, same-day delivery, and e-commerce fulfillment. Execution of a warehouse management lets
an organization to improve its competitive advantage by minimizing labor expenses, enhancing
customer service, improving inventory accuracy, increasing flexibility, and responsiveness. A
warehouse management system allows a firm to manage inventory in real time, with data as existing
as the latest order, shipment, or receipt and any movement in between. With help of mobility app
solution, you will increase the level of tracking the flow of system at any place of world. Here are
some of the many benefits of a warehouse management system that you should consider for your
logistics business.

Quicker inventory turns: A good inventory management system can minimize your lead times by
restricting inventory movement and enhancing the reliability of the inventory records, and hence
supporting the just-in-time environment. Therefore, the requirement for a safety stock will be
minimized, which improves the overall inventory turnover and also the goal of the working capital
management.
Effective utilization of warehouse space
Not just minimizing the safety stock needs, a warehouse management system also regularly improves
available warehouse space by systematically and effectively locating the products in relation to
receiving, packaging, and shipping areas. This improved efficiency can indeed increase the
productivity and cut the inventory holding expenses greatly.

Depletion on inventory paperwork

The execution of a real-time warehouse management software can greatly minimize the paperwork
that is conventionally associated with warehouse functions and also makes sure timely and perfect
flow of inventory and information. All the information that is traditionally maintained as hard copies
such as tickets, packaging lists, etc. can now be maintained digitally.

Enhanced cycle counting

Business can utilize a warehouse management system to note down relevant data such as particular
locations, regularity of movement, etc. So that they can schedule the staff for the cycle counts in a
proper and well-organized way. Not only do these cycle counts increase the accuracy of the inventory
records for future planning purposes, but also can greatly eradicate or minimize the requirement for
expensive physical inventories.

Improved customer service

By optimizing the processes right from product order to shipment, businesses can more efficiently
and accurately find the item availability and exact delivery dates .In addition, it can automatically
recognize and release if there are any back-ordered inventory.

Increased labor productivity

The system assists in optimizing the material flow, basically, by integrating various inventory picks
into one by “Cross-docking” and also reduces returns as a result of improved shipment accuracy.

Optimize your process:

With a WMS software system in hand, you can optimize all the warehouse processes seamlessly. You
can achieve many goals at once like establishing key performance indicators, aligning operation along
with business goals, implement automation in all equipment, and collect real-time intelligence while
the process is running simultaneously.

Reduce overall cost

A robust inventory management system plays a significant role in reducing the overall cost of
operations. It does this by many ways; firstly it allocates the labor efficiently. Secondly, it ensures
security of all the items along with streamlining the picking and package process. By all these
methods you can save a large chunk in a given fiscal year.

Increased transparency:
One big benefit that warehousing management solutions provide is of transparency. They make
processes like shipping, order fulfillment, and tracking orders completely transparent to all the
workers. The transparency is to such an extent that all the employees are able to access the real-time
data and serve their customers with precise and accurate information.

How to select the right warehouse management system

Here comes the real part. Now that you have understood the importance and the role of a warehouse
management system in the logistics business, it is now time for choosing the right system for your
 warehouse functions. However, understanding the what features and functionalities to look for can
actually help you choose the right one .If you have friends in other businesses who implemented a
warehouse management system, then ask them which systems they are utilizing for their businesses.

Also, attend workshops and trade shows to understand the comprehensive range of systems that are
available in your country.

Do basic homework
The necessary things like your business size, distribution output, etc. you would like to offer to your
customers are some of the parameters that will help you determine the kind of warehouse system you
choose.

8. Transportation role in Supply chain

Transportation is the movement of goods, animals and people from one place to another by road, air,
land or water. The transport industry is a huge one, a massive employer of labour from drivers, to
flight attendants, pilots, ticket officers and those working behind the scene amongst many others.

Most of the things around us came from somewhere else as they were manufactured in different
countries, packaged and distributed with the help of the transport industry across the world.
Transportation penetrates every area of human lives and without it many world economies will be
disintegrated. A supply chain is a body of people and activities, information involved in moving
products from the producers to the final consumers. There are major areas in a supply chain:
Purchasing, manufacturing and transportation of both raw materials and finished products.

Goods cannot be solely consumed in a place where they are produced; they must be transported to
other locations to meet the needs of other consumers and flexibility of the products. It is important for
every organization to make available, a responsive and affordable transportation network as this is the
backbone of its ability to satisfy customer services at a reduced cost because the absence of this will
lead to an increase in the cost of goods and services.

Importance of Transportation in Supply

The importance of transportation in any supply or distribution chain cannot be over emphasized. It is
one of the most vital economic activities for a business that links a company to its suppliers and
customers; an essential activity in the supply chain that supports the economic utility of time and
place therefore ensuring that customers have products when and where they demand it.

An inefficient transport system may hinder customer satisfaction as late deliveries can lead to many
complaints and even loss of customers; products may also suffer damage if delivery is delayed and
this too can cause a decline in business. But, when a company delivers promptly with complete and
undamaged goods, the confidence of the customer is built and his loyalty gained. It is the duty of the
person in charge of the supply chain to choose the most convenient, effective and economical means
of transportation that befits the company or organization. An efficient and stable transport system
brings stability in price of products as goods are transported from points of abundance to points of
scarcity and this establishes formalities between demand and supply. It helps to supply necessities to
consumers at consistent rates.

When consumers are able to get necessities at affordable rates, competition arises among producers
and this leads to a mass production at low costs. Transportation provides mobility to capital and
labour. This encourages labour and capital to invest in more productive sectors.
 Transportation establishes utility by reducing geographical distance. it encourages international trade,
uniformity and strengthens national security, it is a major contributor to economic prosperity because
a good transport system boosts commerce. It encourages division of labour and specialization on
geographical basis because cost of transportation is a core factor that affects the localization of
industries, making it possible for local resources to be utilized at maximum.

The distribution of raw materials for the purpose of production and distribution of finished goods for
consumption is solely dependent on transportation. This narrows the gap between producers and
consumers and facilities timely and affordable distribution of goods and services. Transportation can
be hazardous and risky. It causes accidental injury, deaths. Environmental pollution and sometimes
criminal activities. Transportation helps to fulfill the economic utility of time and pace; it provides the
link that connects nodes in the supply chain, linking a focal company to its suppliers and customers.

Transportation and the supply chain

A supply chain as mentioned earlier, is a network of bodies that work towards providing a good or
service for the final consumers. It is an embodiment of the planning and management procedures
involved in sourcing, procurement and logistics management .Most organizations rely on supply
chains to help them reach their end user market; they rely on outside parties for effective marketing
strategies that aid customer satisfaction .Supply chains also include coordinating and collaborating
with supply intermediaries, third party service providers or customers. It integrates the management
of supply and demand within and across companies. Effective management of a supply chain equates
to managing business relationships among companies and their supply chain partners which include
customers and suppliers. When a level of a supply chain experiences delays and difficulties, its
affects the ability of the lower levels of the supply chain to satisfy its customers. And this ultimately
affects the economy; factors that may disrupt transportation are failures of equipment, government
intervention, bad roads and natural disasters.

With right tools in place, transportation provides an opportunity for the supply chain to continuously
create operational efficiency and improve the bottom line, unlocking untapped value for investors .It
is the least complex but most critical aspect of the supply chain because it represents the biggest
percentage of the supply chain. The integration and promotion of business services have to involve
transportation systems at different stages, it plays a connective role that results in the conversion of
resources into useful goods in the name of the ultimate consumer.

The role transportation plays is more complex than carrying goods for business owners, it brings
efficacy and builds a bridge between producers and consumers. It is a base of efficiency and economy
on the supply chain and expands other functions of the chain. It brings benefits not only to service
quality but also to company competitiveness. If transportation will continue to be of great influence to
the supply chain, transportation managers need to study the supply chain to identify where the
importance of transportation was mostly felt, so as to educate their chain peers on these impacts. It is
important to further get involved with the upstream of the supply chain by driving continuous
improvements into processes and decisions to ensure that transportation continuous to deliver
excellence for their organizations. He must understand and support the company’s strategy to provide
valuable inputs.

9. What is integrated logistics management & Profit of a firm

Integrated Logistics is defined as “ the process of anticipating customer needs and wants; acquiring
the capital, materials, people, technologies and information necessary to meet those needs and wants;
optimizing the goods-or-service-producing a network to fulfill customer requests; and utilizing the
network to fulfill customer request in a timely way.”
Integrated logistics is a service-oriented process. It incorporates actions that help move the product
from the raw material source to the final customer.

Integrated Logistics Management

The movement of raw materials and components to a manufacturing company must be managed. So
must the movement of finished goods from the manufacturing plant to further processing, to the
retail, or to the final consumer. The management of this movement is called integrated logistics
management.

Variables affecting the Evaluation and Growth of Integrated Logistic

Many variables affected the evaluation and growth of integrated logistic. The first was the growth of
the consumer awareness and the marketing concept. Product line expanded to meet the rising demand
for more selections. This product line expansion put great presser on distribution channels to move
more products and keep cost down, especially in transportation and inventory.

A second factor was the introduction of the computer. Computer experts and integrated logistic
manager quickly found a multitude of computer application for logistic. The third variable leading to
the growth of integrated logistics was the world wide economy in the 1970s and 1980s. The final
factor affecting integrated logistics is the growth of just-in-time manufacturing (JIT), supply
management, transportation, and electronic data interchange (EDI) in the 1980s and 1990s. As
manufacturers adopted total quality management (TQM), JIT, and EDI, integrated logistics
management has come to the forefront. Effective TQM and JIT require optimizing the inbound and
outbound transportation and more efficient inventory management.

Activities related to Integrated logistics.

 Physical distribution.
 Materials management.
 Logistics engineering.
 Business logistics.
 Logistics management.
 Integrated logistics management.
 Distribution management.
 Supply chain management.

Although the activities include under each term vary, they share one key ingredient: “The concept of
a continuous uninterrupted flow of the product.”

Operations involved in Integrated logistics model.

 Inbound logistics: It is referred to as procurement or physical supply. It deals with the

relationship between the firm and its suppliers. It addresses the flow of materials from the
suppliers to the plant or into service operations.
 Conversion / operations: It deals with the logistical relationship between and among the
facilities of the firm. It addresses how goods and materials move among workstations within
operations.
  Outbound logistics: It is referred to as physical distribution. It is the logistical relationship
between the firm and its customers. It is the movement of finished product out of the plant to
the final customer.

Each of these relationships is sustained by the execution of 5 primary logistics activities like
transportation, facility structure, inventory management, material handling and communication /
information. These activities are interwoven throughout the integrated logistics system. Each is
vital and is found at every stage.

 Transportation: it is necessary in outbound, inbound as well as conversion processes. It

deals with the movement of a product into, through, and out of the plant / warehouse. It is the
most expensive logistics activity, accounting for 50 % or more of total logistics costs.
 Facility structure refers to the strategic placement of warehouses, service centre, and plants
throughout the supply chain. It includes the numbers and types of plants, their locations and
their operations.
 Inventory management refers to product buffers of raw materials, work in progress, and
finished goods in logistics pipelines.

If every activity worked perfectly, if there were no variation in transit time, no variation in
processing time, no loss or damage, no volume discounts for transportation, no volume discount
for products, and if firms could forecast demand accurately there would be no need to store
product.

10. Shareholders value & Impact in logistics

Shareholder value is the value enjoyed by a shareholder by possessing shares of a company. It is the
value delivered by the company to the shareholder.

Description:
Increasing the shareholder value is of prime importance for the management of a company. So the
management must have the interests of shareholders in mind while making decisions. The higher the
shareholder value, the better it is for the company and management. For this to happen, management
must exercise efficient decision making so as to earn/increase profits, thereby increasing shareholder
value. On the other hand, faulty decision making using unfair tactics might damage shareholder
value.

11. Pull & Push view of supply chain

Processes in supply chain are divided into two categories depending on whether they are executed in
response to the customer order(pull) or in anticipation of the customer order (push).
The business terms “Push” and “Pull” originated in the Logistic and Supply Chain Management.
Relative to customer demand, supply chain processes are executed, which fall into two broad
categories-“Push” and “Pull”.
 Pull Supply Chain

Under the pull supply chain, the process of manufacturing and supplying is driven by actual customer
demand. In this type of supply chain logistics, inventory is acquired on a need-basis. The benefits of
this type of planning include less wastage in the case of lower demand. For example, an auto repair
shop that only orders parts that it needs. In this case, the business waits until it gets an order to
procure the parts required for the repair.

Push Supply Chain

Under push supply chain, the logistics are driven by long-term projections of customer demand. For
example, at the end of the summer season, clothing brands start to manufacture more warm clothes.
This gives the companies meet their needs in time and also gives them time to figure out other
logistics like where to store the inventory.

12. Product development strategy ? And Why is it

Product development strategy refers to the methods and actions used to bring new products to a
market or modify existing products to create new business. Developing a product has several steps,
from producing an idea to distributing products to customers. Each stage requires a strategy to be
successful and generate revenue for a business.
The stages of product development and introduce some common product development strategies.
Product development strategy is important because it uses market research to develop a plan for
success in selling products. Your overall strategy should include the methods and techniques you will
use during each stage of product development. This can help you overcome obstacles and focus on
the strategies that are most successful. Making plans for how to develop various products can also
enable you to adjust existing products and grow your business.

Stages of product development

Product development includes all aspects of producing a new innovation, from thinking of a concept
to delivering the product to customers. When modifying an existing product to create new interest,
these stages verify the potential success of the modifications at generating business. The seven stages
of product development are:

 Idea development: Idea development involves brainstorming for new products and ways to
make existing products more relevant.
 Editing and selection: During the selection process, the product development team
determines which ideas have the most potential to do well in the market.
 Prototype creation: Once an idea has been selected, the company must create a prototype or
draft version of its proposed product. This prototype can be used to determine if the product
functions as intended and appeals to your target audience.
 Analysis: At the analysis stage of product development, the company studies market research
and evaluates the possible problems with the product.
 Product creation: After incorporating notes from the analysis into the prototype, the finished
product can be created.
 Market testing: Before releasing the product to a wider audience, products are often released
to a smaller market or focus group. The market testing phase includes evaluating customer
feedback and the effectiveness of the product's marketing.
 Commercialization: The final stage of product development occurs when adjustments are
made based on market testing and the product is released to the full market.

Product development strategies

Some companies may focus on adapting their current products while others may mostly
create new innovations, but both types of product development require a clear strategy to
implement. Here are some useful product development strategies for introducing a product
and remaining competitive within your market.
 Change ideas
 Modify an existing product
 Increase product value
 Offer a trial
 Specialize and customize
 Create package deals
 Create new products
 Find new markets
 Modify an existing product
 Creating a new version of an existing product with slight changes can provide your market
with the motivation to purchase an upgrade. Modifying one of your existing products and
focusing on the updates in your marketing influences customers to try the newer version of
the product.

 Increase product value

Many companies engage customers by including additional value with the purchase of a
product. You can increase value by including a larger quantity of product, adding customer
support or offering premium features. New customers may be drawn to your product because
of the added benefits, while existing customers may purchase your products again to receive a
better deal.
 Offer a trial
Offering a free or less expensive sample version of your product can convince customers to
try your product who might not have otherwise purchased the full version. This method relies
on the quality of the product by assuming that many of the customers who experience the free
trial will purchase the full version. Offering a trial can show customers how they can benefit
from the rest of your products.
 Specialize and customize
Many products can be specialized to target a specific customer group or customized to create
a unique and personal gift. Allowing customers to personalize your product to fit their needs
and lifestyle can encourage them to choose that product over a competitor who only offers a
generic version.
 Create package deals
You can encourage customers to purchase more of your product by creating package deals.
This strategy exposes customers to a variety of your products through sample packs or
assortments that could solve different problems for the customer. Package deals can also
introduce customers to a product they may not have otherwise purchased and encourage them
to buy it in the future.
 Create new products
Another way to develop a product line is to create a new product that relates to your market.
When creating new products, be mindful of what customers are looking for without
discouraging them from buying your other products. Any new products should supplement
what your existing product does for the customer instead of replacing the original,
encouraging customers to buy multiple products from your business.
 Change ideas
One strategy for developing a product can be to change your product idea. If a market is not
responding to an innovation, the company may consider devoting their resources to
researching what that market wants. Not all ideas will result in a successful product, so a
willingness to change ideas when needed can be an effective strategy.
 Find new markets
Many products can be successfully sold in multiple markets. One product development
strategy is to consider marketing an existing product to a different market or demographic.
This could include targeting businesses instead of individual consumers, marketing toward a
different age group or expanding your product geographically.