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Techsonic Industries, Inc. Humminbird—New Products case solution Case Solution

Solution Id Length Case Author Case Publisher
1419 1539 Words (6 Pages) Eric Beinhocker Harvard Business School : 591007
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There are various risks and limitations of using inquiry to obtain customer input when developing new products. The first limitation of the seeking customer input is the high cost associated with the marketing research. The organization needs to hire a marketing research company to conduct research (Servi, 2010). The process of the creation of the research questionnaires, conducting interviews and carrying out analysis is quite time consuming and costly. Questioning some individuals is not enough to get figures and reliable and credible market research information (Servi, 2010). The time associated with doing research by administering structured questionnaires and conducting interviews represents a sizeable cost (Servi, 2010).

Case Analysis for Techsonic Industries, Inc. Humminbird—New Products case solution Case Solution

1. Another risk associated with seeking customer input is the selection bias. A major factor that has a negative influence on the process of market research is the voluntary participation of the research subjects. For example, the company will probably only investigate a group of people in which all respond that the product is very interesting (Annacchino, 2007). The reason for the favorable response can be the fact that the participants are already a loyal customer of the company’s products. This is a major risk with seeking customer input during product development (Annacchino, 2007). The marketing decision will be biased by the opinions of existing users. The results of the research will not reflect the opinions of a representative sample of the target market.

Techsonic is particularly vulnerable to many of the risks and limitations that are mentioned above. The reason for the high vulnerability of the organization is the segregation of the target market and the distributors of the company. If Techsonic focuses only on a single distribution channel to carry out the market research, its findings will be highly polarized and biased. In addition, the will be a very high cost associated with the marketing research for the company since its products are technical in nature. These are not consumer products and their testing requires extensive usage by the consumer before forming a decision to market the product to masses.

Techsonic’s marketing function does not contain employees with sufficient experience in carrying out marketing research. The organization will need to hire a marketing research company to conduct research which will be costly for the business. There are three potential products to be launched by the company; namely, “901”, VHF marine radio and a navigation device. The process of seeking customer input will be incredibly time consuming and costly for Techsonic. The creation of the research questionnaires, conducting interviews and carrying out analysis for these three technical products (“901”, VHF marine radio and a navigation device) may lead the company to miss the launch date.

The riskiness of selection bias for Techsonic is also high due to market segmentation. Techsonic has already alienated marine dealers and distributors. For this reason one of the major disadvantages for Techsonic will be biasness of the market research due to the voluntary participation of the research subjects. For example, the company will probably only investigate a group of people in which all respond that the product is very interesting. The reason for the favorable response can be the fact that the participants are already a loyal customer of the company’s products. The results of the research will not reflect the opinions of Techsonic’s entire target market rather it will only reflect the opinions of mass merchants and catalogers. Hence, the marketing decision will be biased by the opinions of the two stakeholders in the distribution channel of the company.

The key reason behind Techsonic’s success is the continuous product innovation. Techsonic engages in small improvements in the existing products of the company that are being sold to the consumers. At the same time, the company continues to generate radical changes in the design of the depth sounders. The innovation process at the company is both continuous and discontinuous (Mukesh, et al., 2009). For instance, the business has developed and introduced to the market a new product whose consumption requires a change in consumer behavior. Continuous innovation is also carried out at the company which relates to the upgrades to existing depth sounders that does not involve or require changes in consumption behavior. For example, the VHF marine radio does not require a change in behavior for consumption, and fall within the category of continuous innovation (Mukesh, et al., 2009).

The reason for Techsonic’s success is taking advantage of continuous innovation. Also, the management of the company has the foresight to make necessary investment in infrastructure, acquisition of new skills and knowledge by the employees and to educate consumers regarding the consumption of the new products. For the new depth sounder “901” the company has chosen to educate the consumers regarding their use.

2. The key criteria adopted to evaluate the three new products comprise the following:

• Possession of the factor conditions by the organization

The organization should have the ability to manage the production of the new product while maintaining a competitive advantage in the market. The factor conditions cinlude human resources (quantity, cost of personnel qualifications), physical resources (abundance, quality, accessibility and cost of land, water etc), knowledge resources (scientists, technicians and markets), capital resources (quantity and cost of capital to finance industry), and the infrastructure for the creation of the new product.

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