Fab International Limited is a well-known company for electrical company for electrical and electronic products. It is the market leader for various electrical products and enjoys second position for electronic products. The company has realized that the 80-million, strong middle-class market of India now wants world-class products and after-sale services. These customers are now ready to pay higher price for better products. On the other side, the lower middle-class customers have become very price-sensitive, with decreasing real income and increasing inflation.
So far the company was selling ‘same quality products’ to all income groups of customers. But now it has felt the need of product differentiation and value for money on one side and reasonable value for reasonable money on the other side, are going to be the further product strategies of the company.
Product differentiation is to be effected very carefully, without disturbing customer sentiments. This requires suitable change in employee skills. If employees are ready to change their style of operations, required change in product design or product quality can be achieved and customers can be made fully happy.
Employees are to be exposed to real market realities through live product demonstrations and effective workshops. Careful study of customers ideas on product value should be carried out. New designs, contents and utilities require new technology ideas. Ultimately, all this requires flexibility in productivity. If changed design or quality of product demands improvement in productivity, it should be achieved by the employees. The company should properly reward such improvements.
Fab has appointed a committee to find out ways and means for redefining productivity, based on the redefined ‘product value’.
Q.
1) Discuss the significance of timely change in product value.
2) Discuss the significance of timely changes in productivity, to suit the change in product value.
3) How would you bring in such change in productivity?
3 Comments