chapter 12 definitons

early majority

(34% of population) A group of consumers in the diffusion of innovation model that represents approximately 34 percent of the population; members don't like to take much risk and therefore tend to wait until bugs are worked out of a particular product or service; few new products and services can be profitable until this large group buys them.

alpha testing

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.

concept

Brief written description of a product or service; its technology, working principles, and forms; and what customer needs it would satisfy

premarket tests

Conducted before a product or service is brought to market to determine how many customers will try and then continue to use it.

laggards

Consumers who like to avoid change and rely on traditional products until they are no longer available.

product life cycle

Defines the stages that new products move through as they enter, get established in, and ultimately leave the marketplace and thereby offers marketers a starting point for their strategy planning.

beta testing

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.

lead users

Innovative product users who modify existing products according to their own ideas to suit their specific needs.

test marketing

Introduces a new product or service to a limited geographic area (usually a few cities) prior to a national launch. (more expensive)

reverse engineering

Involves taking apart a competitor's product, analyzing it, and creating an improved product that does not infringe on the competitor's patents, if any exist.

first movers

Product pioneers that are the first to create a market or product category, making them readily recognizable to consumers and thus establishing a commanding and early market share lead.

maturity stage

Stage of the product life cycle when industry sales reach their peak, so firms try to rejuvenate their products by adding new features or re-positioning them.

introduction stage

Stage of the product life cycle when innovators start buying the product.

decline stage

Stage of the product life cycle when sales decline and the product eventually exits the market.

growth stage

Stage of the product life cycle when the product gains acceptance, demand and sales increase, and competitors emerge in the product category.

prototype

The first physical form or service description of a new product, still in rough or tentative form, that has the same properties as a new product but is produced through different manufacturing processes, sometimes even crafted individually.

late majority

The last group of buyers to enter a new product market; when they do, the product has achieved its full market potential.

diffusion of innovation

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.

pioneer/breakthrough

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.

concept testing

The process in which a concept statement that describes a product or a service is presented to potential buyers or users to obtain their reactions.

innovators

Those buyers who want to be the first to have the new product or service.

product development / product design

entails a process of balancing various engineering, manufacturing, marketing, and economic considerations to develop a product's form and features or a service's features.

early adopters

second group after the innovators, to use a product or service innovation. dont like to take as much risk as innovators but instead wait and purchase the product after careful review