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Product-market synergy
Product-market synergy

Product-market synergy

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  • Pages: 2 (547 words)
  • Published: October 14, 2018
  • Type: Article
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Product features and benefits describe the quality, the uses and necessity of the product and the product price. The quality and design of the product depends on the company’s innovativeness, financial support, technology and engineering processes and the time consideration with respect to production. The product is basically an answer or the solution to a need or problem on immediate time.

A competitive product gives an efficient and fast service outcome, offers unique and reliable benefits at reasonable price.Thus, the characteristics of the product should be taken into account which includes the product advantage, product-company synergy and product-market synergy. Product-company synergy signifies a strong predictor of success. (Athuane-Gima, 1995) This is related to the extent by which the resources for the new innovation intended for the market fit the firm’s skills and resources.

It involves almost every detail that the firm possess and manipulate from the plan to the purchase of materials to the procedures to the skills and manpower.In this regard, an extensive intervention and participation of the different sections and departments of the firm is needed for the positive product-market synergy. Synergy, therefore is achieved when efforts are combined within which it will be a significant factor in the New Product Development. Market research and analysis aim to get a niche from the market for the product being introduced or studied.

This involves thorough analysis of the industry the product intends to penetrate which includes the customers, competitors and the profile of the company itself.Customer’s characteristics may be their income, age, culture and profession. Getting a share of the pie means competing with the major play

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ers of the market. Competitors can be assessed by their company profile, their activities and their products features. Synergy component of strategy is a natural companion to the competitive advantage. By evaluating the potential synergy described as individual skills, facilities, organizational or management skills, the items with the strongest potential are selected for the synergy component of strategy.

The use of synergy influences the New Product Development Process through the Synergy Strategy. When a business is linked to another business with the same firm or division, Synergy Strategy occur. This link facilitates the sharing of sales force, office or warehouse and can be a vehicle in promoting the new product in combination with the existing products. (Aaker, p. 8) Service is a type of product a firm can offer the consumers.

According to Atuahene-Gima, there are two main types of service-company synergy: 1. the Innovation-Market synergy, and 2) the Innovation-Technology synergy. The Innovation-Market synergy indicates whether the new service can be more efficient than the current service in terms of research, delivery, distribution, promotion while the Innovation-Technology synergy indicates whether the new service applies new and modern technological and engineering skills and resources.(Atuahene-Gima, 1996) Synergy Strategy may also be applied in service oriented firms, in that, firm having combination with the business catering to the materials and resources related to the service will give efficiency on the rendition. Customer satisfaction sustains the business of the firm.

The demand of the customer for the new product rely on their acceptance and satisfaction, perceived product quality, outstanding performance over the existin

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products, satisfies new needs and desires and the product-communication combination. (Storey and Kelly, 2001 based on Sampson’s work in 1970)

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