SHAD Traders is dealing with import quality juices in Pakistan. The business is growing due to local industry is preferred against the imported ones after international events in 2024-25. The taste remains good but the market is becoming highly competitive as multiple brands are entering in market.
09 SHAD Traders have 2 options; developing a new product versus lowering prices to increase sales. Recommend which option the business should choose? Evaluate. [12]
Please read the answer of the previous student & if the answer seems well developed don't use the same KN in your answer, try to give new one.
09 SHAD Traders have 2 options; developing a new product versus lowering prices to increase sales.. [12]
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Sir Afzal Shad
- Grand Commerce Guru
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Shuraim Arif
- Corporate Commander
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Re: 09 SHAD Traders have 2 options; developing a new product versus lowering prices to increase sales.. [12]
(DEF) Developing a new product is the process of creating and introducing a new or improved good to the market whereas lowering prices is a pricing strategy where a business reduces the selling price of its products.
(KN) Developing a new product is a great way to increase sales as it maintains the brand image.
(APP) Since SHAD Trader's sales are being threatened due to an increase in competitiveness, developing a new flavor, such as raspberry flavor, would show customers the import quality juices they produce.
(AN) This would make many customers loyal to SHAD Traders as they would choose them over competitors, improving SHAD Trader's brand image and eventually helps them gain a larger market share. However, developing a new product can be very risky if market research is not done. If majority of the customers don't like raspberry flavor, they wouldn't want to try it, leading to no visible benefits gained from launching the new flavor, and in fact, this would lead to a lot of wastage, of money, time and space.
(KN) Another way to increase sales is to lower prices to attract price sensitive customers.
(APP) Lowering prices would lead to a huge short term boost in sales as many customers would choose SHAD Trader's juices over competitors because of the low prices.
(AN) Offering lower prices on flavors that customers don't like also increases the chances of them being sold, leading to reduced wastages and also lower storage costs. These lower storage costs would lead to higher profits for the company. However, charging lower prices may damage SHAD Trader's brand image badly as customers may start associating their import quality juices with "cheap" rather than "quality".
(EVA) In my opinion, the best way to increase sales is to develop a new product. This is because it allows many customers to become loyal to the business, leading to SHAD Trader's problem of having too much competitors in the market, being solved as customers would prefer them over competitors. The problem of launching a new product being too risky also, can be avoided if market research has been properly done, involving questionnaires, interviews and focus groups.
(KN) Developing a new product is a great way to increase sales as it maintains the brand image.
(APP) Since SHAD Trader's sales are being threatened due to an increase in competitiveness, developing a new flavor, such as raspberry flavor, would show customers the import quality juices they produce.
(AN) This would make many customers loyal to SHAD Traders as they would choose them over competitors, improving SHAD Trader's brand image and eventually helps them gain a larger market share. However, developing a new product can be very risky if market research is not done. If majority of the customers don't like raspberry flavor, they wouldn't want to try it, leading to no visible benefits gained from launching the new flavor, and in fact, this would lead to a lot of wastage, of money, time and space.
(KN) Another way to increase sales is to lower prices to attract price sensitive customers.
(APP) Lowering prices would lead to a huge short term boost in sales as many customers would choose SHAD Trader's juices over competitors because of the low prices.
(AN) Offering lower prices on flavors that customers don't like also increases the chances of them being sold, leading to reduced wastages and also lower storage costs. These lower storage costs would lead to higher profits for the company. However, charging lower prices may damage SHAD Trader's brand image badly as customers may start associating their import quality juices with "cheap" rather than "quality".
(EVA) In my opinion, the best way to increase sales is to develop a new product. This is because it allows many customers to become loyal to the business, leading to SHAD Trader's problem of having too much competitors in the market, being solved as customers would prefer them over competitors. The problem of launching a new product being too risky also, can be avoided if market research has been properly done, involving questionnaires, interviews and focus groups.
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Fatima ibtehaj
- Enterprise Emperor
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Re: 09 SHAD Traders have 2 options; developing a new product versus lowering prices to increase sales.. [12]
I believe SHAD trades should develop a new product.
[KN]Developing a new product could help them to differentiate themselves in a crowded market.
[APP]Since many brands are entering, offering a new flavour or a healthier option could create a unique selling point (USP).
[AN]This would reduce direct price competition and help attract customers who value quality and innovation rather than just low prices leading towards a competitive advantage due to USP resulting in a larger customer base.
However another method which they can adopt is reducing prices.
[KN]Lowering prices could quickly increase sales volume, especially in a highly competitive market where customers may be price-sensitive.
[APP]If local juices are becoming more popular, competitive pricing could help SHAD Traders retain market share and attract new customers from rival brands.
[AN]This strategy may also be effective if SHAD Traders benefits from economies of scale, reducing average costs as output increases however lowering prices reduces profit margins and competing mainly on price is risky when many new entrants can also lower prices.
[EVALUATION]Overall, developing a new product is a better option for SHAD Traders. Although it is riskier and more costly in the short term, it provides long-term benefits such as differentiation, stronger brand image etc. In a competitive market, relying solely on lower prices is unlikely to be sustainable. However, SHAD Traders could support product development with limited promotional pricing rather than reducing prices altogether hence balancing growth with profitability.
[KN]Developing a new product could help them to differentiate themselves in a crowded market.
[APP]Since many brands are entering, offering a new flavour or a healthier option could create a unique selling point (USP).
[AN]This would reduce direct price competition and help attract customers who value quality and innovation rather than just low prices leading towards a competitive advantage due to USP resulting in a larger customer base.
However another method which they can adopt is reducing prices.
[KN]Lowering prices could quickly increase sales volume, especially in a highly competitive market where customers may be price-sensitive.
[APP]If local juices are becoming more popular, competitive pricing could help SHAD Traders retain market share and attract new customers from rival brands.
[AN]This strategy may also be effective if SHAD Traders benefits from economies of scale, reducing average costs as output increases however lowering prices reduces profit margins and competing mainly on price is risky when many new entrants can also lower prices.
[EVALUATION]Overall, developing a new product is a better option for SHAD Traders. Although it is riskier and more costly in the short term, it provides long-term benefits such as differentiation, stronger brand image etc. In a competitive market, relying solely on lower prices is unlikely to be sustainable. However, SHAD Traders could support product development with limited promotional pricing rather than reducing prices altogether hence balancing growth with profitability.