ideas transformed into new products that will help firms grow
question
Why do firms create new products?
answer
Changing Customer needs
Market Saturation(longer in market-decline in value)
Managing Risk through Diversity : multiple products enhance value,can withstand shock from change
Fashion Cycles: short life cycle, needs new products to survive
Improving Bus. Relationships: suppliers
question
Diffusion of Innovation
answer
the process by which the use of an innovation, whether a product or a service, spreads throughout a market group over time and over various categories of adopters.
question
Pioneers/Breakthroughs
answer
new product that establish a completely new market and change the rules of competition
question
First Movers:
answer
first to create market category readily recognizable
greater market share over a long period of time
question
Innovators
answer
buyers that want to be first in line
2.5%
risk taker
highly knowledgeable
help create market acceptance
question
Early Adopters
answer
not as much of a risk taker
13.5 %
Wait to buy after reviews
wait a week or two
question
Early Majority
answer
34%
question
Late Majority
answer
34%
question
Laggards
answer
don't like change 16%
question
Relative Advantage
answer
The degree to which a consumer perceives that a new product provides superior benefits.
diffusion is quick
question
Compatibility
answer
Consumers features for cultural difference
firefox for Chinese
question
Observability
answer
Easy observation=easily communicated to others
this enhances the diffusion process
botox-no one talks about
question
Complexity and Trial ability
answer
diffuse more quickly
easy to use-less complex
question
idea generation
answer
the systematic search for new-product ideas
question
internal R&D
answer
scientists work to solve complex problems and develop new ideas
question
R&D Consortia
answer
groups of other firms and coporations coming together to explore new ideas or obtain solutions
educational/gov
investments come from whole group
share results
question
Licensing
answer
buying rights yo ideas
saves R&D costs
question
Brainstorming
answer
no idea immediately accepted/rejected
channeling ideas
question
Outsourcing
answer
hiring outside firms to generate new ideas hire people with special skills to help foster creativity
question
Competitors Products
answer
a new product may trigger a market opportunity
reverse engineering
question
Customer Input
answer
surveys, info, data, stats on patterns/habits reviews
question
Reverse Engineering
answer
taking a part a competitors product analyzing it and creating an improved product that does not infringe on patents, if they exist
question
Concept Testing
answer
written description of product report
presenting to potential buyers to get reactions
helps estimate sales value
helps avoid a unsuccessful products
if fails during focus groups , very doubtful it will succeed
question
lead users
answer
innovative product users who modify existing products according to their own ideas to suit their specific needs
question
Product Development
answer
process of balancing various engineering, manufacturing, marketing, economic considerations to develop a products form and features
question
prototype
answer
first physical form or service of a new product
rough
sometimes crafted individually
question
alpha testing
answer
An attempt by the firm to determine whether a product will perform according to its design and whether it satisfies the need for which it was intended; occurs in the firm's research and development (R&D) department.
question
beta testing
answer
having potential consumers examine a product prototype in a real-use setting to determine its functionality, performance, potential problems, and other issues specific to its use
question
Premarket tests
answer
conducted before a product or service is brought to market to determine how many customers will try and then continue to use it
question
test marketing
answer
new product to a limited geographical area prior to national launch
question
Trade promotions
answer
advertising to wholesalers or retailers togged them to buy the new product, introduce price promotions, special events, personal selling
question
Introductory Price Promotions
answer
Short term price discounts to encourage trial
question
trade show
answer
temporary concentration of manufacturers that provides retailers the opportunity to view what is available and new
question
Place
answer
keep manufacturers close by
question
Manufacturers suggested retail price
answer
a retail price suggested by the manufacturer to the retailers to sell their merchandise
easier to start with high MSRP than lower
question
Slotting Allowance
answer
Fees firms pay to retailers simply to get new products into stores or to gain more or better shelf space for their products
question
Evaluation of Results
answer
(1) satisfaction of technical requirements
(2) customer acceptance
(3) satisfaction of financial req.,sales
question
Product life cycle
answer
The stages through which goods and services move from the time they are introduced on the market until they are taken off the market.
question
Introduction stage
answer
Low sales
Negative/low profits
Innovators
One or few competitors
question
Growth stage
answer
Rising sales
rapid rising profits
Early adopters/early majority
Few but inc. competition
question
Maturity
answer
Peak sales
peak-declining profits
late majority
high # of competitors
usually try to rejuvenate product/new features
question
Decline
answer
Declining sales, profits, competitors,
Laggards
question
Even if they succeed, new-to-the-world products are
Select one:
a. not always profitable.
b. not subject to the law of first movers.
c. sometimes copycat brands.
d. typically very short-lived.
e. not adopted by everyone at the same time.
answer
E
question
The diffusion of innovation theory focuses on
Select one:
a. the rate at which consumers are likely to adopt a new product or service.
b. the relationship between pioneer brands and imitators.
c. the way a product moves through the product life cycle.
d. the psychological traits of innovators.
e. the geographic boundaries of innovation.
answer
A
question
Between concept testing and market testing, a firm should engage in which stage of the product development process?
Select one:
a. brainstorming
b. determining potential ROI
c. securing financial backing
d. marketing research
e. product development
answer
E
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