MKTG 345 - Chapter 11

What are the 4 distinct ways that research and development is carried out?

1. Basic research 2. Applied research 3. Product development 4. Product modification

What are the five product characteristics that can be used to predict and explain the rate of acceptance and diffusion of a new product?

1. Complexity 2. Compatibility 3. Relative advantage 4. Observability 5. Trialability

What are the 7 categories of sources that come up with new-product ideas?

1. Customers 2. Employees 3. Distributors 4. Competitors 5. Research and development (R&D) 6. Consultants 7. Other experts

What are common considerations in the business analysis stage?

1. Demand 2. Cost 3. Sales 4. Profitability

What are the five categories of adopters that participate in the diffusion process?

1. Innovators 2. Early adopters 3. Early majority 4. Late majority 5. Laggards

What are the 4 stages of the product life cycle?

1. Introductory stage 2. Growth stage 3. Maturity stage 4. Decline stage

Seven characteristics of successful new-product introduction

1. Listening to customers 2. Producing the best product 3. Vision of future market 4. Getting every aspect right 5. Strong leadership 6. Commitment to new-product development 7. Project-based team approach

Companies are most likely to succeed in developing and introducing new products when they...

1. Make the long-term commitment 2. Use a company-specific approach 3. Capitalize on experience 4. Establish an environment

What are the 7 steps in the new-product development process?

1. New-product strategy 2. Idea generation 3. Idea screening 4. Business analysis 5. Development 6. Test marketing 7. Commercialization

What are the 6 categories of new products?

1. New-to-the-world products 2. New product lines 3. Additions to existing product lines 4. Improvements or revisions of existing products 5. Repositioned products 6. Lower-priced products

The decision to commercialize the product sets several tasks in motion:

1. Ordering production materials 2. Starting production 3. Buildup of inventory 4. Distribution shipments 5. Training the sales force 6. Announcing new product to the trade 7. Customer advertising

What are 3 alternatives to test marketing?

1. Single-source research using scanner data 2. Simulated (laboratory) market testing 3. Online test marketing

New products are important to...

1. Sustain growth 2. Increase revenues and profits 3. Replace obsolete items

Occurs when a company cannot recoup its development, marketing, and production costs—the product actually loses money for the company

Absolute product failure

Which type of new products include new products that supplement a firm's established line?

Additions to existing product lines

Getting a group to think of unlimited ways to vary a product or solve a problem

Brainstorming

The second stage of the screening process where preliminary figures for demand, cost, sales, and profitability are calculated

Business analysis

The final stage in new-product development process, which is the decision to market a product

Commercialization

The degree to which the new product is consistent with existing values and product knowledge, past experiences, and current needs

Compatibility

No firms rely solely on internally generated ideas for new products. A big part of any organization's marketing intelligence system should be monitoring the performance of ______ products.

Competitors'

The more ______ the product, the slower is its diffusion

Complex

The degree of difficulty involved in understanding and using a new product

Complexity

Which product characteristic does Sherbetter fall into because it can be confusing to people?

Complexity

A test to evaluate a new-product idea, usually before any prototype has been created

Concept test

What is considered fairly good predictors of success for line extensions?

Concept test

Traditionally, ______ determine whether a company has a balanced portfolio of products and, if not, what new-product ideas are needed to offset the imbalance

Consultants

The marketing concept suggests that ______ wants and needs should be the springboard for developing new products

Customers'

In which stage of the product life cycle does a long-run drop in sales occur?

Decline stage

The stage in the product development process in which a prototype is developed and a marketing strategy is outlined

Development

The process by which the adoption of an innovation spreads

Diffusion

What is another name for new-to-the-world products?

Discontinuous innovations

A well-trained sales force routinely asks ______ about needs that are not being met

Distributors

Which category of adopters relies much more on group norms and values?

Early adopters

Which category of adopters weighs the pros and cons before adopting a new product?

Early majority

Many firms have formal and informal processes in place for ______ to propose new product ideas

Employees

One unavoidable problem is that test marketing ______ the new product and its marketing mix to ______ before its introduction

Exposes ; competitors

The objective of ______ interviews is to stimulate insightful comments through group interaction

Focus group

In which stage of the product life cycle do sales typically grow at an increasing rate, many competitors enter the market, large companies may start to acquire small pioneering firms, and profits are healthy?

Growth stage

During the introductory stage of the product life cycle, marketing costs are normally ______, sales normally increase ______, and sales are usually ______

High ; slowly ; negative

Which type of new products can be significantly or only slightly changed?

Improvements or revisions of existing products

______ products diffuse more slowly than ______ products

Incompatible ; compatible

A product perceived as new by a potential adopter

Innovation

Who are the first to adopt a new product?

Innovators

Which stage of the product life cycle represents the full-scale launch of a new product into the marketplace?

Introductory stage

By the time ______ adopt an innovation, it has probably been outmoded and replaced by something else

Laggards

Marketers typically ignore ______

Laggards

Despite the amount of time and money spent on developing and testing new products, a ______ proportion of new product introductions ______

Large ; fail

Which category of adopters relies on group norms and their adoption of new products stems from pressure to conform

Late majority

Which type of new products are products that provide performance similar to competing brands at a lower price?

Lower-priced products

In which stage of the product life cycle do sales increase at a decreasing rate?

Maturity stage

Which is typically the longest stage of the product life cycle?

Maturity stage

Succeeding in some countries often requires companies to develop products that ______ of these populations

Meet the unique needs

Which type of new products were not previously offered, but allow a firm to enter an established market?

New product lines

______ is a plan that links the new-product development process with the objectives of the marketing department, the business unit, and the corporation

New-product strategy

Which type of new products create an entirely new market?

New-to-the-world products

The degree to which the benefits or other results of using the product can be observed by others and communicated to target customers

Observability

Test marketing frequently takes how long, and costs can exceed how much?

One year or longer ; $1 million

The most important factor in successful new-product introduction is a good match between ______ and ______ needs

Product and market

What includes all brands that satisfy a particular type of need?

Product category

Converting applications into marketable products

Product development

A concept that provides a way to trace the stages of a product's acceptance, from its introduction (birth) to its decline (death)

Product life cycle

The degree to which a product is perceived as superior to existing substitutes

Relative advantage

When the product returns a profit but fails to achieve sales, profit, or market share goals

Relative product failure

Which type of new products are existing products targeted at new markets or market segments?

Repositioned products

The first filter in the product development process, which eliminates ideas that are inconsistent with the organization's new-product strategy or are obviously inappropriate for some other reason

Screening

The presentation of advertising and other promotional materials for several products, including the test product, to members of the product's target market

Simulated (laboratory) market testing

A team-oriented approach to new product development where all relevant functional areas and outside suppliers participate in the development process

Simultaneous product development

______ allows management to evaluate strategies and to assess how well the various aspects of the marketing mix fit together

Test marketing

The degree to which a product can be tried on a limited basis

Trialability

What are the two types of communication that aid the diffusion process?

Word-of-mouth communication & communication directly from the marketer to potential adopters

Increasing globalization of markets and competition provides a reason for multinational firms to consider new-product development from a ______ perspective

Worldwide