Modify Products For Profit

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MODIFY PRODUCTS FOR PROFIT

Most writing on product planning concentrates on new product development, product pricing and product elimination. Here, John Winkler sets out seven ways to modify existing products for bigger profits. He says that constant tiny changes can keep nudging up sales, reduce costs and increase margins. But such a process needs a well thought out marketing approach. The article has been adapted-from the author's book, Winkler on marketing planning, published by Casselli Associated Business Programmes.

A company's product mix sets the upper limit for its potential profitability. The quality of the company's marketing programme determines how far this limit is reached. Therefore there are two factors to adjust constantly in order to optimise profits. One is the product range, and the other is the marketing programme to support the product range. The term "product planning" embraces both of these factors at the same time and is at the core of company profitability.

Products within the range are constantly being modified; more often than not by managers outside the marketing function. For example, different classes of raw materials are purchased from time to time, yielding different quality levels. Alterations in production systems, or in quality control, provide different product results.

Changes in distribution systems may affect product quality, in terms of freshness, or breakage. Countless pressures are exerted on all products every day, and strictly these should result in only marginal changes. All these changes should be within the levels of tolerance agreed by the marketing function as being acceptable in relation to competitive standards.


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