The management decision in product strategy and pricing

摘要

This report discusses some of the aspects, considerations, and procedures in the organization and implementation of product planning and price determination of proprietary products in a competitive homogeneous oligopoly. These problems are considered from the viewpoint of a corporate executive. It is presumed that a marketing organization is functioning smoothly, and channels of distribution have been established. The major steps and functions performed in a typical product-development cycle are outlined in a flow chart. The product-planning and price-determination process for adaptive, emulative, and innovative proprietary products is discussed from a practical, though not too commonly implemented viewpoint. Specific emphasis is given to quantitative decision theory and variable costs in an effort to minimize the subjective or emotional bias in business decisions. Management decision making in this area requires a knowledge of economic theory, management sciences, legal requirements, and experience in “real world” business practices. The greatest variable in each of these problems is the human, since the emotional predisposition of people will cause them to attach special interpretations to each decision, situation, object, or even to other people. Therefore considered judgment should be used to understand the entire situation and the reasons causing the effects, in order to provide an opportunity for interpretation and control.