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Product Elimination and Service Management

The elimination decision is, beyond any doubt, one of the most ambiguous questions in the marketing field. Whereas, under particular circumstances, the necessity to delete a product from the offering range seems to be inevitable, the possible negative outcomes might prevent a manager from being decisive. As long as product elimination is an involuntary measure, the question arises regarding the factors that determine the appearance of this kind of necessity. Some specialists believe that the need to delete a product is a logical consequence of the unreasonable managing policy (Lehmann & Winer 2005). Meanwhile, an opposite point of view suggests that product elimination is a natural process that cannot be avoided even with the help of an efficient management strategy (Avlonitis 1987).

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To begin with, one should note that the most typical reason for the product deleting is the lack of the customers’ demand for the relevant item. Thus, a particular product might become unclaimed due to a series of factors: the expired time limit, the competitive disadvantage in comparison to the newly appeared products, and the disappearance of the piece of reality it initially intended to serve. One of the most vivid examples of the following case is the decision of Coca-Cola to delete their product Coca-Cola Vanilla short after the latter was introduced in the market.

One can suppose that the company realized that the customers’ demand for the drink was significantly lower than they had expected; therefore, the delete of this item seemed to be the only way out. One can hardly claim that the relevant managing decision was unreasonable. On the contrary, one has a ground to assume that the managers’ unwillingness to make the elimination decision would have led to considerable financial losses for the firm.

Another case when the delete of the product does not represent the result of a poor managing strategy is the intention to introduce a new updated product. Some managers make a decision to delete the existing product so that it does not create extra competitive challenges for the new item that is about to appear in the market. In this situation, the elimination decision is rather risky, and its outcomes are often unpredictable.

The relevant strategy is particularly typical of popular catering companies. Hence, McDonalds tends to delete the existing items from the menu as soon as the new updated version of this product is worked out. The peculiarity of this management practice is that the product is deleted from the offering range notwithstanding the fact that there is a high customers’ demand for it. Such cases of the delete of products are another example that refutes the assumption that the relevant measure is determined by the faults of the management.

On the other side, the opinion that the product deletion is caused by an inefficient management practice is likewise justified. Thus, the lack of the customers’ demand might be the result of a poor management targeting and a faulty analytical prognosis. As long as the decision to delete a product from the offering range is still reasonable, the necessity to implement this measure signifies that some critical aspects have been overlooked at the planning stage. Thus, the example of a series of the unsuccessful Nokia products, such as Nokia 1209 and Nokia 1220, show that the company introduced the products that were initially disadvantaged from the customers’ point of view. In this case, the company had to delete the products short after their introduction and, consequently, bear financial losses due to the crucial mistakes of the management.

Furthermore, the need for the products elimination is often provoked by the managers’ inability to estimate the competitive capacity of the item in the global market adequately. Due to the globalization process that is rapidly gathering speed, managers have to be particularly careful while monitoring the competitors’ offer, its price, and quality characteristics. Hence, for instance, the launch of the Macintosh TV turned out to be a complete failure, and the Apple Company suffered significant losses. The principal reason for this breakdown was the poor management and its incapacity to assess the competitive environment of the current market. The company had to delete the product from its offerings as the TV they introduced was evidently losing the competitive race due to its high cost and the lack of distinguishing advantages.

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Therefore, one might conclude that the problem of a product deletion is highly complex and controversial. Practice shows that the reasons that cause the need for taking the relevant measure are varied. Thus, on the one hand, product elimination might be a natural necessity determined by the altered environment of the current market. In this case, the timely decision of the management to delete a particular product from the company’s offerings is likely to have a positive impact on its performance. Meanwhile, in some particular cases, product deletion is caused by the poor management that overlooked the opportunity to avoid taking this risky measure.

Management of services

Nowadays the question that effective management is the determining factor of a successful company’s performance seems to be undoubted. Most of the modern companies face the problem of working out managing strategies for advancing their services and products. Therefore, the question arises whether the relevant policies should be different for services and products. Some specialists believe that the main principle of management are similar regardless of the time of items the company advances (Araujo & Spring 2006). In the meantime, some analysts argue that the management of services requires a more profound planning and targeting in comparison to the products advancing (Gounaris, Avlonitis & Papastathopoulou 2006).

On the face of it, it seems that the management of service and that of products are completely alike. First of all, in both cases, one has to deal with the development of an existing option. Thus, as long as the customers’ demand for a certain item is relatively high, every company still intends to perform some allowances in order to improve the existing service or product and push up sales in such a manner.

The following assumption is well proved by numerous examples of mobile companies that introduce various apps and add new options to the existing devices. Hence, for this very reason, IPhone tends to introduce the update version of every product once in a while. The IPhone 6 is consequently followed by IPhone 6S that is almost the copy of its precedent, but it still helps the company to maintain the customers’ loyalty. Likewise, many hotels upgrade the offered services. The management employs this measure on a regular basis even if they receive no evident signal of the clients’ dissatisfaction.

Another common trait of the service and products management is the importance of a brand that sells them. Thence, one of the primarily aims of every company is to contribute constantly to its image’s development regardless of the type of items they advance. The analysis of the example of the Blackberry Corporation’s case might make one presume that the exclusively high rates of their sales are largely determined by the successful brand development. As long as the products and the services on offer do not possess any significant distinguishing advantages the company contributes large amounts of money to the advancement of the brand itself, which, in its turn, assists Blackberry in the maintenance of their clientele.

Moreover, one of the key similarities between the management of services and that of products is the necessity to act in the framework of a severe competitive environment. As a result, it is not only the offered item management has to focus on but the monitoring of the rivals’ offerings as well. One might assume that, in the current era of globalization, the competitive challenges for services and products are relatively equal. Therefore, catering establishments now have to be particularly careful about the development of their products and the services. One might easily note how the delivery offers of a particular restaurant are considerably upgraded as soon as its competitor introduces a special offer. The menu of these restaurants is likewise renewed every season in order to keep up with the competition in the relevant market.

Nevertheless, one still has to take into account some critical peculiarities of the service and products management in order to work out an efficient strategy. Some specialists note that these distinguishing features are particularly crucial while dealing with the items’ elimination. Hence, Gounaris, Avlonitis, and Papastathopoulou suggest that the deletion of a service is a more problematic procedure than that of a product; as a consequence, it requires extra consideration. According to the analysts, most of the difficulties of a service’s elimination are determined by the impossibility of replacing a service immediately by a more developed counterpart like it can be performed in the case of a product management.

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The researchers presume that the introduction of a new service might take the company a considerable time period before the offered option acquires the customers’ appreciation (Gounaris, Avloniti & Papastathopoulou 2006). As a result, the deletion of a service represents a riskier measure that the products elimination. This point of view is wide spread. Thus, some specialists explain this phenomenon by the fact the service advancement requires an introduction of a thoroughly worked-out concept. The necessity to create such a concept makes managers give their preferences to the product deletion instead of the services elimination (Araujo & Spring 2006).

Conclusion

The analysis of various company cases shows that the management of services and products represents a complex system that bases on the consistent marketing principles. Thus, both managing strategies need to consider the aspects of product and services’ updating, the brand’s improvement, and the current competitive environment. Meanwhile, one needs to be acquainted with the key peculiarities of the offered options in order to work out an efficient policy. Hence, there is an opinion that the service management is a more complex and problematic procedure than the advancement of a product.

References

Araujo, LM & Spring, M 2006, ‘Services, Products and Institutional Structure of Production’, Industrial Marketing Management, vol. 35, no. 7, pp. 797-805.

Avlonitis, GJ 1987, ‘Linking different types of product elimination decisions to their performance outcome: “Project Dropstrat”’, International Journal of Research in Marketing, vol. 4, no. 1, pp. 43-57.

Gounaris, S, Avlonitis, G & Papastathopoulou, P 2006, ‘Uncovering the keys to successful service elimination: “Project ServDrop”’, Journal of Services Marketing, vol. 20, no. 1, pp. 24-36.

Lehmann, DR & Winer, RS 2005, Product Management, McGraw-Hill, New York.

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