Product Modification

Thesis Submitted to: Miss Amna Shahzadi

Submitted By: Rida Hussain

Roll No: 1410404

Session: 2014-2018

Govt. Post Graduate Islamia College for Women, Cooper Road Lahore

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 Acknowledgement

The accomplishment of this research project would not have been possible without the dedication,
inventiveness and guidance provided by a number of people all through the study.

First and foremost I want to express my appreciation to my Teacher; Miss Amna Shahzadi for the
academic guidance she accorded me in every stage of this research project. The wealth of knowledge in
academic writing attained through this collaboration is precious.

I also want to thank my good friends for proof reading this research. It is never easy to go through pages of
such writing in a field we are not familiar to. However as friends they made this happen while providing
positive feedback.

Finally, to my family for their continuous encouragement and support, without which I would not have been
able to concentrate and complete this research.

Thanks you

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 Dedication

This research project has been moderately satisfying and delightful to conduct. However this would not have
been possible without the encouragement and sacrifices of time made available to myself by my family. I
therefore dedicate this research project to my whole family.

I also dedicate this research to my mother who taught me at a very tender age to always aim higher in my
academic searches. This research is an important innovation in this journey. To my mother also for the
discipline that came in convenient in keeping with the constricted timelines for this study.

Lastly, to my loving friends for their encouragement and feedback. May the completion of this study be an
inspiration to you to strive for success in all that you do in your life.

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 Table of Contents

Chapter No. 1
Introduction
1. Introduction…………………………………………………………………………..7
1.1. Problem Statement…………………………………………………………………...8
1.2.Research Objectives…………………………………………………………………..8
1.3.Definitions of Variables………………………………………………………………8
1.3.1. Product Modification……………………………………………………………..8
1.3.2. Sales Organization…………………………………………………………….......8
1.3.3. Profit……………………………………………………………………………....8
1.4.Importance of the Study………………………………………………………………8
1.5.Research Question…………………………………………………………………….9

Chapter No. 2
Literature Review
2. Literature Review…………………………………………………………………….10
2.1.Background of the Study…………………………………………………………….10

Chapter No. 3
Theoretical Framework
3. Theoretical Framework………………………………………………………………14
3.1.Organizational Sales and Profit depends on Product Modification…………………14
3.2.Hypothesis……………………………………………………………………………14

Chapter No. 4
Research Methodology
4. Research Methodology……………………………………………………………….15
4.1.Research Design………………………………………………………………………15
4.1.1. Purpose of the Study……………………………………………………………...15
4.1.1.1.Exploratory Study…………………………………………………………………15
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 4.1.1.2.Descriptive Study………………………………………………………………….15
4.1.1.3.Inferential Study…………………………………………………………………...16
4.1.2. Types of Investigation……………………………………………………………...16
4.1.2.1.Causal Relationship………………………………………………………………...16
4.1.2.2.Correlation………………………………………………………………………….16
4.2.Extent of Researcher Interface…………………………………………………………16
4.2.1. Minimal Interface…………………………………………………………………..16
4.2.2. Study Setting……………………………………………………………………….17
4.2.2.1.Non-Contrived setting……………………………………………………………...17
4.2.3. Measurement and Measures………………………………………………………...17
4.2.3.1.Operational Definition………………………………………………………………17
4.2.3.2.Unit of Analysis……………………………………………………………………..17
4.3.Sampling Design………………………………………………………………………...17
4.3.1. Non-Probability Sampling…………………………………………………………..17
4.3.2. Convenience Sampling………………………………………………………………17
4.4.Population………………………………………………………………………………..17
4.5.Sample……………………………………………………………………………………18
4.6.Time Horizon…………………………………………………………………………….18
4.6.1. Cross Sectional……………………………………………………………………….18
4.7.Data Collection…………………………………………………………………………..18

Chapter No. 5
Descriptive Statistics
5. Descriptive Statistics……………………………………………………………………..19
5.1.Demographic Statistics…………………………………………………………………...19
5.1.1. Demographic Profile of Respondents………………………………………………..19
5.2.Descriptive Summary…………………………………………………………………….22
5.3.Reliability Analysis………………………………………………………………………22
5.4.Correlation Analysis……………………………………………………………………...23

Chapter No. 6
Conclusion
6. Conclusion………………………………………………………………………………..24
6.1.Discussion………………………………………………………………………………...24

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 6.2.Conclusion………………………………………………………………………………24
6.3.Recommendations & Suggestions for future Research…………………………………24

References………………………………………………………………………26
Appendix…………………………………………………………………………26

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 Chapter No. 1
Introduction

1. Introduction:
An important product technique for firms in fully-prepared markets is value- adding modification to
existing products, marketing information that disclose consumers choice, buying habits and life style is
important for the act of identifying of such product modifications. We consider two types of value-adding
modifications that are often easy by marketing information; power of retaining-type modifications that
increase the attractiveness of a product to firm’s true customers and subjugation-type modifications that
allow a firm to increase the appeal of its product to a rivals loyal customers. We examine aspects the of
markets for product modification information:(1) the manner in with power of retaining and subjugation
modification affect common strife for the same object between down-stream firms and (2) the optimal
selling and pricing policies for a seller who markets product modification. We consider several aspects of
the sellers contracting problems, including how a seller should package and target the information to the
down current firms and whether the seller should limit the type of information that is sold. This research is
also examined when a seller can get the offering exclusively to a firm.
We communicate with words problems in a model consisting of an information seller facing two
downstream firms that sell differentiated product. The form analyzing how information contracting is full of
affection by differentiation in the down current market and the quality of the information. We analyze two
possible scenarios. In the first the information facilitates modifications that increase the appeal of products
to the loyal customers of only one of the two downstream firms. In the second scenario, the information
facilitates modifications that are attractive to the loyal customers of both the firms. The effect of
modifications on downstream competition depends on whether they are of the retention or the coquetting
type.
A retention- type modification increases the effective differentiation between the firms and softens price
competition. Coquetting’s modifications however, have benefits as well as associated cast. A coquetting
modification of how impact reduces the “effective” differentiation between competing products and leads to
increased price competition.
However, when coquetting modifications are of sufficiently high impact, they also have the benefits of
helping a firm to capture the customer of the competitor. The vendor strategies for one sided information
always involve selling to one firm. The firm for which the modifications are of the preservation type. When
the identified modifications are of low impact, this result is expected because coquetting modification are

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profit- producing for downstream firms. However, even when the information identifies high-impact
modifications, the sell strictly better off by targeting his information to the firm for which the modification is
retention type.

1.1. Problem Statement:

A problem statement is a brief explanation of the issue that need to be address by a problem solving team
and should be existing to them (or created by them) before they try to resolve the problem. On the other
hand, a statement of the problem is a say of one or two sentences in length that outline the problem
addressed by the study. The statement of the problem should for a short time address the question: What is
the problem that the research will address? The main purpose of a problem statement is to focal point the
attention of the problem solves team. However, if the focus of the problem is too narrow or the scope of the
solution too limited, the creativity and innovativeness of the solution can be quiet.

What is the impact of product modification on organization sales and on profit as well?

1.2. Research Objectives:

 Explain the planned meaning of product and service design

 identify the major objectives of product and service design

 talk about the significance of standardization

1.3. Definitions of Variables:

1.3.1. Product Modification: Product modification means varying one or more of the product's facial
appearance and may involve reformulation and repackaging to improve its customer request.

1.3.2. Sales Organization: sales organization is a prepared structure specify the formal ability and
responsibility among persons working in the organization. It consists of collection of individuals
working to attain selling objectives to raise sales etc.

1.3.3. Profit: Profit is the disparity between price and the costs of bring to market whatever it is that is
come across as an activity in terms of the mechanism costs of deliver goods/or services and any in
service.

1.4. Importance of study:

It is always important to get better or change a product or service because

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  Product or service become familiar approximately the area it is base.
 Raise your sales regeneration pace.
 Facilitate raise sales.
 Rise in diversity and choice pertaining to recompense.
 Increase aggressive advantage over rival
 It is important for the business to be well known because ‘Traditional original’ is a new business and
needs it announcement so it interest new customers and increase the amount of profit coming in to
the business.
 It is important to increase the sales regeneration for ‘Traditional Originals’ so they have a chances to
grow their business and once more make more profit thus having a possibility to grow.
 It is important to add to in variety and choice of the products sold so that the business can keep their
customers paying attention makes more profit.
 It is important to increase a good standing for ‘Traditional Original’ because they will help them
make more profit, increase of their business and customers.
 It is important to have a benefit over spirited rival because this will give you knew clients thus
making more profit and make the business rise in the market.

1.5.Research Questions
 Is there any relationship?
 What is the impact of Product Modification?
 What is the validity of Variable in the research study?

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 Chapter No. 2
Literature Review
2. Literature Review:
2.1. Background of the study:
Marketing in sequence sold by office data seller is one the best mounting segment of market
study in the 1990s.1 office sellers are mostly full of life in as long as marketing managers with in
sequence that helps to prepare and modify product strategy. vendor such as ICOM, Acxiom,
Yankelovich, and NFO universal, to bring up a few, offer office systems that pathway continuing
changes in consumer preference, brand attitude export habits, way of life and demographic trend.
This information facilitates marketers with information on how to add value to their product
contributions. In many mature package goods markets, this in sequence is a vital store that aids in
the growth of competitive strategy. Table 1facilitates information of syndicated information
systems offered by 6 of the top 50 market research organizations in the United States that help
consumers in conniving or modifying their products.
This type of information is mostly significant because almost 90% of new product activity
involve modifications to presented products rather than completely innovative products. These
modifications include change to product facial appearance; line extensions, position, and
packaging.2 Syndicated database systems of the type made known in Table 1 have some vital
reward in this context. First, they help customers to always monitor change in consumer and
market trend (with associated implications for their products). Second, the growing technological
difficulty of syndicated databases enable firms to add value in a greatly under fire fashion. The
following example illustrate how in sequence is used to modify and add value to a product.
Example. ICOM is one of North America’s best growing syndicated providers of database
marketing in sequence The company has urbanized a relational database that incorporate
domestic-level in sequence on demographics, behavior preference, and brand expenditure in a
number of product category Some of the most forceful users of ICOM’s data are pharmaceutical
companies that challenge in OTC category such as pain relievers. Motrin (Johnson & Johnson)
and Advil (American Home Products or AHP) are ibuprofen-base products that compete in the
OTC pain relief market. Both brands have the same on the go element (ibuprofen). However,
investigation of ICOM’s database exposed that Advil’s practice was comparatively high among
pain wounded. In contrast, Motrin usage was elevated among sufferers of back pain and
menstrual cramp. In March of 1999 using ICOM’s database, J&J urbanized a brochure and a
marketing program in particular under fire at the consumers in the database who were recognized
as everyday sufferers of backaches and menstrual cramp The brochure was planned to “educate”
consumers about the effectiveness of Motrin for this type of pain assistance Clearly, J&J is using
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this exacting plan to construct Motrin’s application with its more loyal users Marketing in
sequence existing from the ICOM database enable J&J to add value to Motrin by as long as
important information/facts that was related to its loyal users. This is labeled as a retention-type
modification. However, J&J could also have used the information to enhance the appeal of
Motrin among regulars who are trustworthy to Advil by substance its efficiency for headaches.
We call this a coquetting-type modification.3 the reason of this article is to examine the optimal
strategy for a syndicated data seller who markets information useful for guide the product
strategy of firms in fast-moving consumer goods markets. This requires us to examine how in
sequence which points to retention or coquetting modifications, affects opposition between
downstream firms. Several important questions arise in the context of sympathetic the
information vendor’s options and their subsequent impact on market struggle:
Should the seller sell this information completely or broadly within a category? • Should the
vendor’s plan differ depending on whether the information helps a firm to target its own as
different to its competitor’s customers?
Should the seller sell complete information packets, or should she boundary the type of
information that a buyer will receive (e.g., information on own versus competing customers)?
A large body of research on product modifications deal with the measurement of consumer
effectiveness for provides additional value to consumers in a under attack fashion (i.e., benefits
that are more valued by some customers in the market than others). Shaffer and Zettelmayer
(1999) have also examined the role of information that adds value based on consumer reliability
in the context of a allocation channel relationship. In a model of two manufacturers and a
common merchant they analyze how the division of profits in the channel might be precious by
the provision of information related to loyal or nonlocal consumers of a producer.
There are some important difference in analyze the sale of syndicated marketing data (versus sale
of financial information). First, financial markets are efficient in brilliant the information that
traders have: uneducated traders learn, and can adjust, their behavior relatively rapidly. In
contrast, product modifications are designed and implement over a longer time period, and the
benefit of a modification often obtain from the time needed by an opponent to react. Second, the
value of financial in sequence does not typically differ from corner to corner buyers in the
industry. In the case of product modification in sequence the value of the information can vary
considerably across potential buyers. For example, information that facilitates a retention
modification for one firm will facilitate a coquetting modification for a competing firm. Thus a
important part of our analysis is devoted to accepting how downstream firms use information
once they enjoy it. We show how a seller takes this into account in choose her strategy.
Raju and Roy (1997) considered the value of information to firms that are of diverse sizes. Our
article deal with buyer firms with different valuation for the information, not because they are of
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diverse sizes (firms in our framework are ex-ante symmetric), but because information allow a
manufacturer to differentially adjoin value based upon customer faithfulness. This article
proceeds as follows. The following section presents the model. In §3, we analyze how coquetting
and retention product modifications have an effect on the downstream opposition between the
firms. This sets the step for the major analysis in §4, where we talk about the seller’s equilibrium
selling strategy. In §5, we discuss the managerial implication, and we bring to a close in §6.
Selling and sale management is a new instruction and its significance is rising since companies
are becoming more and more marketing slanting. The problem of recent business is not how to
create but how to put up for sale the product. It means that there is no winning private sale
without efficient sales management because more and more products need to be bringing closer
to the customer in the advertising process. In this paper I will meet point on one aspect of
advertising and sale management, sales organization and functionality. There are two methods of
sales organization and functionality, observed technique and systematic technique. The reason of
my research was to find out if the sale organization and functionality in Bosnia and Herzegovina
companies was in harmony with the scientific process or empirical technique. regardless of the
fact that the source on selling and sales management are regularly alert on B2C (business to
customer) market, my investigation was alert on B2B (business to business) market companies in
order to find out if the speculative aspects on sale and sale management on B2C market are
relevant on B2B market. The objects of my research are five most important companies on
Bosnian and Herzegovina manufacturing market.
Profit is an surplus of revenues over connected fixed cost for an movement over a period of time.
Terms with similar meanings include ‘earnings’, ‘income’, and ‘margin’. Lord Keynes remarked
that ‘Profit is the steam engine that drives the business endeavor’. Every business should earn
adequate profits to stay alive and grow over a extended period of time. It is the index to the
economic progress, improved national income and rising standard of living. No doubt, profit is
the rightful thing, but it should not be over emphasize. Management should try to exploit its
profit custody in mind the interests of the society. Thus, profit is not just the prize to owner but it
is also linked with the attention of other segment of the society. Profit is the measure for judge
not just the monetary, but the decision-making competence and societal objectives also.
Profitability means capability to make profit from all the business behavior of an organization,
company, firm, or an endeavor. It shows how competently the management can make income by
using all the property obtainable in the market. According to Hayward & Upton, “productivity is
the ‘the aptitude of a given asset to be paid a go back from its make use of.”
However, the term ‘productivity’ is not synonymous to the term ‘competence’. Profitability is a
directory of competence; and is regard as calculate of competence and management direct to
better competence. Though, productivity is an important measure for measure the competence,
12
the degree of profitability cannot be taken as a final evidence of efficiency. Sometimes
acceptable proceeds can mark incompetence and equally, a proper amount of competence can be
accompanied by a nonexistence of profit. The mesh profit shape simply reveal an acceptable
equilibrium between the principles receive and worth given. The alter in operational competence
is just one of the factor on which productivity of a venture mainly depends. Furthermore, there
are many other factor besides competence, which have an effect on the productivity.
From time to time, the terms ‘income’ and ‘productivity’ are used interchangeably. But in
genuine intelligence, there is dissimilarity between the two. Profit is an total term, while, the
productivity is a relation idea. However, they are intimately connected and equally mutually
dependent, having separate role in commerce. Profit refers to the total income earn by the
business enterprise during the exact era of time, while productivity refers to the operating
competence of the venture. It is the skill of the venture to make profit on sale. It is the capacity of
endeavor to get enough return on the capital and human resources used in the commerce process.
As Weston and Brigham rightly explanation “to the financial organization profit is the test of
competence and a calculate of manage, to the owner a measure of the worth of their asset, to the
creditors the border of security, to the government a calculate of taxable ability and a foundation
of governmental act and to the country profit is an directory of economic development, national
income generate and the increase in the standard of livelihood”, while productivity is an outcome
of income. In other words, no profit drives towards productivity. Firms have same amount of
earnings may vary in terms of productivity. That is why R. S. Kulshrestha has rightly affirmed,
“Profit in two divide business apprehension may be the same, yet, many a period, and it
frequently happen that their productivity varies when deliberate in terms of size of speculation”.

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 Chapter No. 3
Theoretical Framework

3. Theoretical Frameworks:
The theoretical framework is the arrangement that can hold or maintain a theory of a research study.
The theoretical framework introduces and describes the theories that explain why the research difficulty
under study exists. Swanson, Richard A. Theory Building in Applied Disciplines.

Product Organizational

Modification Sales and profit

Independent Variable Dependent Variable

3.1. Organizational sales and profit depends on product modification:

In this theoretical framework organizational sales and profit depend on product modification.

3.2. Hypothesis:
𝑯𝒐 ;There is a relationship between product modification and organizational sales and profit.
𝑯𝟏 ;There is no relationship between product modification and organizational sales and profit.

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 Chapter No. 4
METHODOLOGY
4. Research Methodology:
The procedure used to gather information and data for the cause of making commerce result. The
methodology may hold journal research, interview, survey and other research technique, and could
comprise equally in attendance and past in sequence.

4.1. Research Design:

The research design pass on to the in general plan that you decide to put together the dissimilar
mechanism of the learn the study in a logical and rational way, thereby, ensure you will
efficiently speak to the research problem; it constitute the design for the collected works,
capacity and examination of information.

4.1.1. Purpose of the study:

The Purpose of the Study declaration helps the topic charge the significance of the study
relation to person values. The declaration should comprise not only the instant reason of the
learn, but also any better, ultimate reason. There are three purposes the learns:
a. Exploratory Study
b. Descriptive Study
c. Inferential study

4.1.1.1. Exploratory Study:

Exploratory Research is research behavior for a problem that has not been deliberate
more obviously, recognized priority, develop prepared definition and get better the
last research design.[1] Exploratory research help decide the most
excellent research design, data-collection method and selection of subject. It must
sketch ultimate conclusion only with great concern. Given its basic natural world,
exploratory research frequently concludes that a apparent problem does not in fact
live.

4.1.1.2. Descriptive Study:

Descriptive research is used to describe individuality of a population or occurrence
life form deliberate. It does not answer questions about how/when/why the
individuality occur. Rather it addresses the "what" question (what is the individuality
15
 of Minnesota condition population or circumstances organism studied?) [1]The
individuality used to portray the circumstances or populations are frequently some
type of unconditional system also known as expressive category.

4.1.1.3. Inferential Study:

Inferential study makes inference about populations by means of data strained from
the population. as an alternative of using the whole population to collect the data, the
statistician will gather a example or sample from the millions of inhabitants and make
inference about the whole population by means of the sample.

4.1.2. Types of investigation:

There are two forms of investigation:
a. Causal Relationship
b. Correlation

4.1.2.1. Causal Relationship:

A correlation between variables, though, does not mechanically mean that the alter in
one changeable is the reason of the alter in the principles of the other changeable.
Causation indicates that one occasion is the consequence of the incidence of the other
happening; i.e. there is a causal relationship between the two actions.

4.1.2.2. Correlation:
Correlation is any of a wide class of statistical relations connecting confidence,
though in ordinary practice it most often refers to the level to which two variables
have a linear connection with each other well-known examples of dependent
phenomenon contain the connection between the physical statures of parents and their
progeny, and the correlation between the demand for a manufactured goods and its
cost.

4.2. Extent or Researcher Inferential:

4.2.1. Minimal Interface:
Minimalism refers to the application of minimalist philosophy and main beliefs
in hardware and software design and practice.

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 4.2.2. Study Setting:
4.2.2.1. Non Contrived Setting:
A non-contrived setting is the usual surroundings in which actions normally happen.
Field studies and ground experiment are examples of non-contrived settings. A field
study is a study accepted out in the usual environment with minimal interference from
the researcher.

4.2.3. Measurement and Measures:

4.2.3.1. Operational Definition:
An operational definition is the application of operationalization used in important the
terms of a procedure wanted to decide the nature of substance or phenomenon and its
property such as period, quantity, conservatory in space, chemical work of art, etc.

4.2.3.2. Unit of Analysis:

The unit of analysis is the main entity that is being analyzed in a study. It is the 'what'
or 'who' that is organism studied. In social science research, typical units of analysis
comprise individuals (most common), group, social organizations and social artifact.

4.3. Sampling Design:

4.3.1. Non probability sampling:
A core feature of non-probability sampling technique is that samples are chosen based on
the subjective decision of the researcher, somewhat than random selection
(i.e., probabilistic techniques), which is the foundation stone of probability
sampling technique.

4.3.2. Convenience Sampling:

A convenience sample is one of the major types of non-probability sampling method.
A expediency sample is made up of people who are simple to reach. Believe the subsequent
example. A researcher interviews shopper at a local mall.

4.4. Population:
A population is the number of all the organisms of the same collection or species, which live in a
exacting geographical area, and have the ability of interbreeding. The region that is used to
describe a sexual population is definite as the region where inter-breeding is potentially likely
17
 between any couple within the region, and where the probability of interbreeding is better than
the probability of cross-breeding with persons from other region. The population of my research
study is the Punjab.

4.5. Sample:
A data sample is a set of data composed and/or selected from a statistical population by a definite process.
The basics of a sample are known as sample points, sampling units or explanation. We select the data
from the colleges in Lahore city. The sample for my study is Lahore colleges.

4.6. Time Horizon:

4.6.1. Cross Sectional Studies
Cross-sectional study is descriptive studies (neither longitudinal nor experimental). Different
case-control studies, they can be second-hand to explain, not only the odds ratio, but
also absolute risks and relative risks from occurrence. They may be used to describe some
feature of the population.

4.7. Data collection Method:

Data compilation is the process of meeting and measuring in sequence on under attack
variables in an recognized methodical FASHION, which then enable one to answer
applicable questions and assess outcome.

18
 Chapter 5
Analysis and Results

5. Descriptive Statistics:
Descriptive statistics are recycled to investigate the records, all in determination to examine the
influence and relation among exchange rate fluctuations to foreign direct investment in Punjab. The
method for data collection is questionnaires. The investigation used the Statistical Package for Social
Sciences (SPSS) to assessment the consequence of the correlation of the variables.

5.1. Demographic Statistics:

Statistics

Age of Qualifications of Gender of Marital Status of

respondents respondents respondents respondents

Valid 50 50 50 50
N
Missing 0 0 0 0
Mean 1.5400 2.3400 1.5800 1.4800
Median 1.5000 2.0000 2.0000 1.0000
Mode 1.00 2.00 2.00 1.00
Std. Deviation .57888 .87155 .49857 .50467
Variance .335 .760 .249 .255
Range 2.00 3.00 1.00 1.00

5.1.1. Demographic Profile of Respondent:

Majority of our respondents are fall in the age group of 21-23 years. It means that we have
collected most of our data form youngsters. Mostly respondents’ qualification is bachelors. 80%
of our respondents are female and remaining 20% are males. 77% of our respondents are single
and remaining 23% are married.

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20
21
 5.2. Descriptive Summary:
1 2 3 4 5 6 7 8 9 10

N Valid 50 50 50 50 50 50 50 50 50 50
Missing 0 0 0 0 0 0 0 0 0 0
Mean 2.8800 3.6400 2.9000 3.3200 3.0400 3.2200 2.9000 3.2200 3.6800 3.5400
Median 3.0000 4.0000 3.0000 3.0000 3.0000 3.0000 3.0000 3.0000 4.0000 4.0000
Mode 4.00 4.00 3.00 4.00 3.00 4.00 3.00 3.00 4.00 5.00
Std. Deviation 1.3346 1.06445 1.19949 1.05830 1.30868 1.25014 1.05463 1.38932 1.2687 1.31258
Variance 1.781 1.133 1.439 1.120 1.713 1.563 1.112 1.930 1.610 1.723
Range 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00

5.3. Reliability Analysis:

Reliability Statistics

Cronbach's Cronbach's N of Items

Alpha Alpha Based on
Standardized
Items

.292 .269 10

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5.4. Correlation Analysis:

1 2 3 4 5 6 7 8 9 10
1 1

2 .156 1

3 -.059 -.029 1

4 -.059 -.004 .138 1

5 -.161 .098 .250 -.127 1

6 .126 .168 -.094 -.101 .032 1

7 -.357 .185 .08 -.062 -.101 -.184 1

8 -.041 .165 -.060 .090 .264 .218 .043 1

9 .158 .064 -.129 .154 -.115 .148 -.024 -.029 1

10 .201 .069 .022 .035 .118 .249 -.240 .180 .228 1

*Correlation is significant at the 0.05 level.

23
 Chapter 6
Conclusion, Limitations
6. Conclusion:
6.1. Discussion:
In this section, we examine the relevance of our analysis to observed markets. We discuss how the results
are useful for providing guidance to marketing managers about the expected impact of alternative product
strategies and to data vendors about the selling of product modification information.
A message of this article is that retention modifications are more likely to be observed in real-world markets.
Several authors in the descriptive literature have offered prescriptions that are consistent with this message.
For example, Reichheld and Sasser (1990) and Reichheld (1996) have provided evidence from a range of
industries that shows that the costs of retaining a firm’s loyal customers are much less than the cost of
attracting new customers. Our analysis provides a strategic perspective on retention that goes hand-in-hand
with the cost-based perspective in the descriptive literature. In the context of product modifications, we
have shown that retention modifications have the potential to make one’s competitor behave less
aggressively and thereby reduce the level of competition in the market. This highlights the importance for
practitioners of considering the strategic benefits of modifications that build value for loyal customers (i.e.,
retention modifications). Furthermore, our analysis suggests that conquesting modifications frequently
intensify competition to the detriment of all downstream firms. To proceed with a conquesting modification,
a manager must be convinced that the modification is highly impactful and that the competition will be
unable to react to the modification.

6.2. Conclusion:
Consider the different situations that an information vender can face. A vender might have information that
can facilitate modification that is attractive to the loyal consumers of both firms. We define this as “two
sides” information. An example is the ICOM information that points to marketing activity that yield
differential benefits to the users.
Given the vender discussion the downstream firms decide whether or not to buy the information and once
they have purchased information they decide which modification to implement.

6.3. Recommendation & Suggestion for Future Research:

Value-adding modifications to existing products are a common component of the marketing strategy of
firms. This strategy is particularly critical in mature categories where firms compete for market share. This
Article is motivated by the importance of “external” markets for information that allow these modifications.

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Firms like ICOM, R.L. Polk, Acxiom, and Yankelovich Partners, to name a few, sell syndicated information
that is used to facilitate product strategy. This article examines how such information affects the
competition between downstream firms and the optimal contracting approach for a vendor who sells it.

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References:

 Green, Paul E., Abba M. Krieger. 1989. Recent contributions to optimal product positioning and
buyer segmentation. Eur. J. Oper.
Res. 41 127–141.
 Hauser, John R., Steven M. Shugan. 1983. Defensive marketing strategies. Marketing Sci. 2(4) 319–
360.
 Pasa, Mehemet, Steven M. Shugan. 1996. The value of marketing expertise. Management Sci. 42 (3)
370–388.
 Raju, Jagmohan S., Abhik Roy. 1997. Market information and firm performance. Working Paper,
The Wharton School, University of Pennsylvania, Philadelphia. PA.
 W. E. Sasser. 1990. Zero defections: quality comes to services. Harvard Bus. Rev. September–
October, 105–111.

Appendix:

Product Modification

Dear Sir/Madam,
I am the student of Govt. Post Graduate Islamia College for Women, Cooper Road Lahore, I am
conducting research on product modification and I assure you that your information will be kept personal.
This survey is conducted to obtain information that will help my research on “Product Modification” and I
also wanted to identify the wants and needs of organization’s employees.

Demographics:
Name: _______________________ Age: _____________Qualifications: ______________
Gender: _____________Marital Status: _____________ Experience: ________________

These options are provided for the following questions:

1. Strongly Disagree 2. Disagree 3.Neither Disagree nor Agree
4. Agree 5. Strongly Agree

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Sr. Product Modification 1 2 3 4 5
No.

1 I have knowledge about product modification.

2 For product features I am willing to pay more.

3 Product modification is always over-priced.

4 Lack of availability of access is a major reason for low

popularity and demand of product modification.

5 Going product modification could be a beneficial investment

in long run.

6 The product is easy to use.

7 The size of the product is large.

8 The product last for a long time.

9 The material is good to look at.

10 I would recommend this product to my family and friends.

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