II.

Tailoring the Product

Merchandise generally similar in appearance, that is, in style or design, but varying in such elements as size, price, and quality is collectively known as a product line. Product lines must be planned according to consumer needs and wants.

In order to develop a line effectively, market research is conducted to study consumer behaviour. Changing attitudes and modes of living directly affect the demand for products. For example, greater awareness of the importance of eating healthily has led to a decline in demand for foods such as crisps and chocolate bars.

Also, a high-income economy triggers a demand for products very different from those selected in a declining business cycle. The availability or lack of disposable income, meaning income over and above that spent for basic necessities such as food, shelter, and clothing, affects the buying pattern for so-called luxury products. Similarly, the purchase of durable or long-lived goods, such as refrigerators, cars, and houses, may be deferred when the economy is declining and may increase rapidly in periods of prosperity. Staple products, such as food and clothing, tend not to be seriously affected by the business cycle.

The life cycles of products require careful study. Virtually all product ideas lose in time the attraction that initially drew people to buy them. Technological changes can speed up this process, as some producers of video cassette recorders and 35-mm film cameras have found. Manufacturers may also accelerate the obsolescence of a product by introducing new, more desirable products or versions of the existing product. Consumers today expect product innovations and tend to react favourably to new features. This has an important bearing on the usable life deliberately designed into a product, which in turn has a significant effect on the costs to the manufacturer and ultimately on the price to the consumer. Competition between manufacturers of similar products naturally accelerates the speed of changes made in those products.