Lecture7_Canvas - Lecture 7 Product Design Product Design I...

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Lecture 7: Product Design Product Design - I • Product design is another aspect of non-price competition. • Typically one has a choice of what sort of characteristics you want your product to have. – Cars (Size, Horsepower, MPG) – Restaurants/Retail Stores (Location, products) – Computers (speed, storage space, tech. support) – OS (GUI, multitasking ability) – App (features) – TV shows/Movies (Genre, Cast)
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Product Design - II • Economists often divide product characteristics into two categories (note: this is a distinct classification from search vs. experience characteristics): • Vertical characteristics – characteristics that all consumers prefer “more” of (though perhaps to different extents), e.g. quality, number of cores. • Horizontal characteristics – characteristics that consumers differ in opinion on. (e.g. geographic location, design, taste) Vertical Characteristics – I • The primary issue in choosing vertical characteristics is
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