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Producer Expectations

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Ellen Wallaesa

on 5 May 2010

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Transcript of Producer Expectations

What is a Producer Expectation? When a supplier makes a present production decision based on what they hope for in the future. Don't count your chickens before they hatch! The effect of expectations on supply are difficult to predict. Expectations at many times, can be higher or lower then the initial prediction as opposed to how the product actually sells. Let's take a look at the past... In some cases, producer expectations have had a positive effect on supply: Pumps! In 1989, Reebok came out with a new type of shoe called Pumps. The tongue of the shoe had a button so you could fill it with air, or pump it up. This was said to help you jump higher and play basketball better. This wasn't exactly the case, but kids (like Mr. B) went crazy for these shoes, causing an increase in supply. In some cases, though, the results were not so great: New Coke? No thanks! In 1985, the Coca-Cola company decided to change the taste of their product. The unofficial name for this is "New Coke." They had expected people to enjoy the product and make even more money off of it. In reality, everyone hated it and it was a complete failure. But where can this be seen today? Pointless product? Good idea! The Snuggie As we all know, in the past few years, the Snuggie was created and sold. It may have seemed like a ridiculous product, but it sold like crazy, making it a prime example for the positive side of producer expectations. http://en.wikipedia.org/wiki/Reebok_Pump http://en.wikipedia.org/wiki/New_Coke It's just not the same.. The Zune In 2006, Microsoft created their version of the iPod and called it the Zune. It failed in comparison to the simplicity of the iPod. http://saleshq.monster.com/news/articles/2613-20-worst-product-failures?page=2 The End
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