Marketing ch12

Key characteristics of maturity stage

Adoption of product by the late majority, intense competition for market share among firms, and marketing costs increase

Introduction stage of product life cycle

Characterized by initial losses to the firm due to its high start-up costs and low level of sales revenue as the product begins to take off

When new product launch is a failure..

Company may fail, negative financial impact, and product may not recover from failure

Considered of idea generation

Conducting consumer research, researching competitors' products&services, communicating with firm's R&D department, license technology from research-intensive firms, collaborate with other firm and institution, and brainstorming within the firm

During test marketing, the potential elements of marketing mix that may be used include..

Coupons and advertising

Manufacturer's suggested retail price(MSRP)

Decide at what price they would like products to sell to consumers

Product life cycle

Defines the stages products move through as they enter, get established in, and ultimately leave the marketplace

Compatibility

Degree to which one's product is consistent with the needs and habits of target consumers

Pre market test

Determine how many customers will try and then continue to use the product or service according to small group of potential consumers

Integrated marketing communications(IMC)

Encompasses a variety of communication disciplines used during the introductory phase such as trade/price promotions

Product development/product design

Entails a process of balancing various engineering, manufacturing, marketing, and economic considerations to develop product's form and feature

Decline

Exits the market

Slotting allowance

Fee paid simply to get new products into stores or gain more or better shelf space for their products

Innovators

First category of consumers in terms of their place on diffusion of innovation curve

Prototype

First physical form or service description of a new product

One disadvantage from being a first mover

Having to establish the market all alone

Product development process stage

Idea generation>concept testing>product development>market testing>product launch>evaluation of results

Maturity stage

Industry sales reach their peak which firms try to rejuvenate their product by adding new features or repositioning them

Test marketing

Introduces the offering to a limited geographical area prior to a national launch

Reverse engineering

Involves taking apart a product, analyzing it, and creating an improved product that doesn't infringe on competitor's patents

Introductory price promotion

Limited duration, lower than normal prices designed to provide retailers with an incentive to try the products

Laggards

Make up roughly 16% of the market and rely on traditional products until they are no longer available

Late majority

Next group of buyers to enter new product market

Firms with products in decline stage

Position themselves for niche segment of diehard consumers or those with special needs or they completely exit the market

Diffusion of innovation

Process by which the use of an innovation, whether a product or service, spreads throughout a market group over time and over various categories of adopters

Growth stage

Product gains acceptance, demand, and sales increase, and more competitors emerge in product category

Next step for positive result from market testing

Product launch

Key characteristics of growth stage of product life cycle

Profits rise, rising sales, and typical consumers are early adopters and early majority

Trade promotion

Promotion to wholesalers/retailers to get them to purchase the new products

Concept

Refer to brief written description of the product, technology, working principles, and forms

Trial ability and complexity

Refer to how complicated a product is and how easy or hard it is to try

Licensing

Refers to firm buying the rights to use the technology or ideas from other research-intensive firms

Innovation

Refers to process by which ideas are transformed into new offerings including product, service, process, and branding concept to help firms grow

Concept testing

Refers to the process in which a concept statement is presented to potential buyers or users to obtain their reactions

Early majority

Represents 34% of the population and is crucial because few new products and services can be profitable until large group buys them

Manufacturers coordinate delivery and storage of new products with its..

Retailers to assure that products are available to sell to consumers

Innovators most likely have...

Risk takers, trend starters, and is highly knowledgeable about product/service

When late majority enters the market...

Sales tend to stabilize or even decrease

3 interrelated factors that firms use to measure the success of new product

Satisfaction of technical requirements, customer acceptance, and satisfaction of firm's financial requirements

Promotion for new products is required at each link in..

Supply chain

Trade show

Temporary concentration of manufacturers that provides retailers the opportunity to view what is available and new in the marketplace

Alpha testing

The firm attempts to determine whether the product will perform according to its design and whether it satisfies the need for which it was intended

Early adopter

They wait and purchase the product after careful review

Advantages experienced by pioneer firms over later entrants

To command greater market share over a longer period, more recognizable to consumers, and establish early market share lead

Beta testing

Uses potential consumers and who examine the product prototype in real-use setting to determine it functionality, performance, potential problems, and other issues specific to its use

Imitators capitalize on..

Weakness of pioneers and gain advantage in the market