It is not wise to gamble the business resources on the concept of pure intuition or gut instinct. However the understanding of human behavior is the base for all products and service sold. The best of managers, limit risk to secure, assets for their company or business (Merton, 2003). As a manager I would out perform the other stores by ramping up on inventory before season while the competitors would wait for the corporate analytics to stock up on seasonal items. Someone once asked me "How does price elasticity influence pricing policies made by your company and those of your competitors?" Economist would refer to the law of supply and demand to illustrate how price elasticity influences the market price. The density of the market pertaining to the amount of competitors offering a similar product or service determines the market respond to price elasticity, alongside new innovations of similar products, life cycles of products & services, and overall utility (Copeland, Weston, & Shastri, 2014).
The five areas as discussed creates the map "if you will", leading up to the final destination of supply chain. The actual placement of the product is perhaps the most important detail if we believe that there is indeed a market for almost any product or service. But since there is an uncertainty of factors such as (consumer receptiveness, product acceptance, market competitiveness), to list a few; research is conducted to examine market acceptance of the product or service (Hair, Bush, & Ortinau, 2009). The five analysis tools mentioned creates a measurement that will help researchers conclude on assumption about performance concerning the products or service according to price, environment, supply chain, packaging, competition, legal regulation (Clow, Baack, 2010).
Reference
Copeland, T, W., Weston, F, J., Shastri, K., (2014). Financial Theory and Corporate Policy . Boston , Massachusetts: Pearson.
Merton, R. (2003, February ). Thoughts on the future: Theory and practice in investments and management . Financial Analyst Journal, 59(1), 17-23. Retrieved from http://search.proquest.com
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