Strategic Product Design for Retail Channel Acceptance Under Uncertainty and Competition

University Of Maryland, College Park, College Park MD

Investigators

Abstract

The objective of the research is to develop a strategic product design approach that results in new products that have high probability of success in the market. The approach will model retailer acceptance of possible engineering designs and account for the important effect of uncertainty on the profitability of retailers by estimating demand from conjoint surveys from ultimate consumers. The proposed research will focus on linking engineering design decisions with the observed multi-tier channel structure that exists in modern retail markets, where increasingly large and dominant retailers can have a significant impact on the types of products that reach the consumer. Specifically, the issues of retailer preference, customer preference for particular retailers and products, and the strategic responses of retailers under different channel structures (e.g., one dominant retailer versus two dominant retailers in the market) will be accounted for in the designs of competing manufacturers under conditions of uncertainty. Ultimately, the proposed approach will serve to integrate strategy, marketing and engineering design to maximize the profit of a focal manufacturer while taking into consideration the dynamic nature of competition. Results from this research will have important implications for US manufacturers in creating successful design innovations and maintaining/sustaining competitive advantage in products as well as in services by accounting for the retail structures that characterize global markets. The research will lead to development of curricular content for undergraduate and graduate students that combines engineering and marketing in the context of new product design. Specific contributions will be made to education in the areas of engineering design methodology, engineering decision making, multidisciplinary product development, service design and marketing.