Page 328 - Foundations of Marketing

Developing and Managing Goods and Services | Chapter 11 295

Line Extensions
Tide Pods represent a line
extension of the successful Tide
laundry product line.

AP Photo/Anonymous/Procter & Gamble Co

Product Modifications

Product modifi cation means changing one or more characteristics of a product. A product
modification differs from a line extension because the original product does not remain in the
line. For example, automakers use product modifications annually when they create new mod-
els of the same brand. Once the new models are introduced, the manufacturers stop producing
last year’s model. Like line extensions, product modifications entail less risk than developing
new products.
Product modifi cation can indeed improve a fi rm’s product mix, but only under certain
conditions. First, the product must be modifi able. Second, customers must be able to perceive
that a modifi cation has been made. Third, the modifi cation should make the product more
consistent with customers’ desires so that it provides greater satisfaction. One drawback to
modifying a successful product is that the consumer who had experience with the original ver-
sion of the product may view a modifi ed version as a riskier purchase. There are three major
ways to modify products: quality, functional, and aesthetic modifi cations.

Quality Modifications

Quality modifi cations are changes relating to a product’s dependability and durability. The
changes usually are executed by altering the materials or the production process. For instance,
for a service, such as air travel, quality modifications may involve increasing leg room in the
seating area.
Reducing a product’s quality may allow an organization to lower its price and direct the
item at a different target market, such as Mercedes’ launch of a new model priced under
$ 30,000 . In contrast, increasing the quality of a product may give a fi rm an advantage over product modification Change
competing brands. Higher quality may enable a company to charge a higher price by creating in one or more characteristics
customer loyalty and lowering customer sensitivity to price. However, higher quality may of a product
require the use of more expensive components and processes, thus forcing the organization to quality modifications Changes
cut costs in other areas. Some fi rms, such as Caterpillar, are fi nding ways to increase quality relating to a product’s
while reducing costs. dependability and durability

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