Type of Product and its Primary Characteristics
The company will be offering hard wood beds. The reason for choosing beds is that they are durable products, and they can remain in store for long periods of time without going stale. This will be an incentive for the business to survive in the startup phase, as there will be no startup losses incurred in result of products going stale. The product will be offered at inception of the business with a vision of expanding it in future to offer more compliments to bed used in the bedroom. The other reason why beds will be offered by the company is that the product is unlikely to become obsolete in the market, and hence demand will always be there, the amount of returns to realized will be determined by the level of differentiation of the product from those of competitors (Cooper, 1984).
The primary characteristics of the product are that, first of all, the beds will be made from hard woods, camphor and mahogany; this will offer an incentive for customers to buy due to the high durability of the products, translating into high value for their money. The other characteristic is that the beds will come in various sizes ranging from king size and queen size beds to baby beds. The different sizes of beds will ensure that all customer tastes and preferences in terms of bed size are met.
Thirdly, the beds will come in a variety of colors, including silvery and gold plated surfaces; the differentiated colors will meet various customers’ tastes and preferences in terms of color. Lastly, the beds will come with drawers fixed to enhance comfort of customers; they will be able to keep their stuff in the drawers, which will make them prefer the company’s beds more than those of competitors. These characteristics will be improved in future through substantial investment in R&D to discover what the consumers want as the company expands its activities.
Service Component and how it will be Used to Improve the Product
Adding a service component to a product is synonymous with increasing the revenues realized from its sales (De Jong & Vermeulen, 2003). The product will have two service components, including transportation services and repair and maintenance. The company will have delivery vans, offering transport services to customers who purchased beds. This service is expected to increase the sales, as beds are bulky commodities and customers will be worried about transportation and delivery.
The other service that will come in handy with the product is repair and maintenance. This service will be offered to customers in two phases. In the first phase the service will be offered to the customers for free, this phase will extend to a spun of one year from the date of purchase; because the beds will have a one year warranty. The other phase will kick off after a one year warranty is over. This will increase sales as the company’s customers will be assured of ready services from experts; it will create a perpetual relation between the company and its customers who will develop loyalty to the company’s products even as the company expands its activities to include new products.
The two services in addition to attracting customers to the company will also generate more income to the company to supplement the amount realized from point sales of the beds. The product will be preferable to customers as the repair warranty service will serve as quality assurance measure to customers (Susman, Warren & Ding, 2006). The Company will invest in R&D on market dynamics to improve the service base as its activities expand.
How the Product can be Expanded to a Product Line, its Breadth and Depth
As the company grows, the initial product can be expanded into a product line. The product line will include products that are compliments to beds. Offering the product line to customers will ensure that they can buy all they need for their bedroom from one shop. The product line will include such products as duvets, bed sheets, blankets, mattresses and bedside tables. Stocking multiple compliments in the company will enhance sales of the company products, as it will encourage impulse and intended purchases by customers. If a customer wants a bed, for example, he or she may end up buying bed sheets and a duvet, even when he or she has not planned to buy them all, just because they are there.
Breadth of a product line relates to stocking everything that a customer may want as pertains to a product; or, in other words, stocking a variety of product categories. The breadth of the product line will be limited to items used in the bedroom and the compliments to the bed itself, including bed sheets, mattresses, duvets and bedside tables. On the other hand, depth of a product line refers to stocking a focused product line, or, in other words, stoking one category of products. The company’s product line will be deeper than broader; the company will only deal with bedroom products and only those which compliment the bed itself. As the company expands, it could introduce more product categories to cover all home products; this would make its product line broader.
How the Core Business may Change in Respect to Market and Industry Changes
Market and industrial factors form the company’s macro environment, which means that the company is not in position to control change factors originating from them. It must either institute the necessary changes or else be faced off from the market. For example, if the company’s commodities lose substantial demand in the market due to high pricing, it will be forced to reduce its prices; this means that it will be forced to reduce its costs, for example, it may choose to use softwoods rather than using its usual hardwoods. The company may also stock electrical appliances used in the bedroom in future in a bid to increase its customer base to outperform its competitors in the market. Industrial factors may change the company’s core business, for example, if its competitors are using new and cheaper technology to manufacture their products, the company will have to change its culture, to include the new technology, and to change methods of manufacturing its beds in order to cope with new technology. Failure to do so will result in the company operating at high costs and gaining low profits. The company will keep itself abreast with market and industrial dynamics in order to make the necessary changes.