DECA Hospitality and Tourism Cluster Practice Exam

The term that describes the process of making slight modifications to an existing product is product modification. This concept involves making changes to enhance an existing product, which can include alterations in design, features, or functionality to better meet customer needs or adapt to market trends.

Product modification is essential in maintaining competitiveness, as it allows a business to improve its offerings without the significant investment required to develop an entirely new product. For instance, a company might adjust the packaging of a beverage, improve the formula of a cosmetic, or update the software of a tech gadget, all of which can enhance user experience and satisfaction.

In contrast, product innovation typically refers to creating something entirely new or significantly different from existing products, which goes beyond mere modifications. Product diversification involves adding new products to a company's range to enter new markets or appeal to different customer segments, rather than modifying those already in existence. Product expansion would imply increasing the scale or reach of existing products, focusing more on distribution rather than changes to the product itself. Thus, the correct identification of this process as product modification highlights its focus on making improvements to an existing offering.