Intro to Marketing Chapter 8

What are the eight major steps in the new product development process?

(1) Idea generation -> (2) Idea screening -> (3) Concept development and testing -> (4) Marketing strategy development -> (5) Business analysis -> (6) Product development -> (7) Test marketing -> (8) Commercialization

Describe the five distinct stages of PLC:

(1) Product development begins when the company finds and develops a new product idea. During product development, sales are zero, and the company's investment costs mount (2) Introduction is a period of slow sales growth as the product is introduced int the market. Profits are nonexistent int his stage because of the heavy expenses of product introduction (3) Growth is a period of rapid market acceptance and increasing profits (4) Maturity is a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits level off or decline because of increased marketing outlays to defend the product against competition (5) Decline is the period when sales fall off and profits drop

What is Business Analysis?

A review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company's objectives

What is a Fad?

A temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity. It may be part of an otherwise normal life cycle (poker chips) or it may comprise a brand's pr product's entire life cycle

What are some reasons new products fail?

Although an idea might be good, the company may overestimate the market size; the actual product may be poorly designed, incorrectly positioned, launched at the wrong time, priced too high, or poorly advertised

What are some sources of internal ideas?

Beside an internal R&D process, a company can pick the brains of its own people, from executives to salespeople to scientists, engineers, and manufacturing staff. Many companies have developed internal social networks and intrapreneurial programs that encourage employees to develop new product ideas.

What is Product Development?

Company growth by offering modified or new products to current market segments

Define Marketing Strategy Development

Designing an initial marketing strategy for a new product based on the product concept

What are some sources of external ideas?

Distributors and suppliers; competitors; trade magazines, shows, websites, and seminars; government agencies; advertising agencies; marketing research firms; university and commercial laboratories; inventors; customers

What is Commercialization?

Introducing a new product into the market

What is Crowdsourcing?

Inviting broad communities of people - customers, employees, independent scientists and researchers, and even the public at large - into the new product innovation process

What is one limitation of the team-based approach?

It sometimes creates more organizational tension and confusion than the more orderly sequential approach.

What happens when a company tries modifying the marketing mix?

Modifying the marketing mix involves improving sales by changing one or more marketing mix elements

Define team-based new product development

New product development in which various company departments work closely together, overlapping the steps in the product development process to save time and increase effectiveness.

Describe Customer-Centered New Product Development.

New product development that focuses on finding new ways to solve customer problems and create more customer-satisfying experiences

What the three things a PLC concept can describe?

Product class (ex: gasoline-powered cars) Product form (ex: SUVs) Brand (Ford Explorer)

Which of the PLC concept applications has the longest life cycles?

Product classes [the forms can change over time; for example dial telephones, VHS tapes, film cameras]

One framework for evaluating a new product during screening is the R-W-W framework. It asks three questions, describe them.

R - Is it real? Is there a real need and desire for the product and will consumers buy it? W - Can we win? Does the product offer a sustainable competitive advantage? W - Is it worth doing? Does the product fit the company's overall growth strategy? Does it offer sufficient potential?

Define Concept Testing

Testing new product concepts with a group of target consumers tp find out if the concepts have strong consumer appeal

What is the Introduction Stage?

The PLC stage in which a new product is first dsitributed and made available for purchase

Describe the decline stage.

The PLC stage in which a product's sales fade away. The decline may be slow (postage stamps & mainframe computers) or rapid (VHS tapes) Sales may plunge to zero, or they may drop to a low level where they contunure for many years.

Describe the Maturity Stage

The PLC stage in which a product's sales growth slows or levels off

Define the Growth Stage

The PLC stage in which a product's sales start climbing quickly

True/False Profits increase during the growth stage as promotion costs are spread over a large volume and as unit manufacturing costs decrease.

True

If the new product satisfied the market, it will enter a __________ stage.

growth

A company launching a new product must first decide on ___________ ___________.

introduction timing

At some point, a product's sales growth will slow down, and it will enter the _____________ stage.

maturity

The _________ stage usually lasts longer than the previous stages, and it poses challenges to marketing management.

maturity

In ___________, the company tries to increase consumption by finding new users and new market segments for its brands.

modifying the market

The first idea-reducing stage is ____________. Which is..

screening new product ideas to sport good ones and drop poor ones as soon as possible

To get their new products to market more quickly, more companies use a ________________________ approach.

team-based new product development

Define Product Life Cycle (PLC)

The course of a product's sales and profits over its lifetime

Define new product development

The development of original products, product improvements, product modifications, and new brands through the firm's own product development efforts

A firm can obtain new products in two ways:

(1) acquisition - by buying a whole company, a patent, or a license to produce someone else's product (2) new product development

What is a Style?

A basic and distinctive mode of expression

What is a Fashion?

A currently accepted or popular style in a given field

An attractive idea must then be developed into a product concept. What is a product concept? (Do not confuse with product idea)

A detailed version of the new product idea states in meaningful consumer terms. [Note that this differs from a product idea, which is an idea for a possible product that the company can see itself offering to the market. ]

If the product passes both the concept test and the product test, the next step is test marketing. Describe Test Marketing.

The stage of new product development in which the product and its proposed marketing program are tested in realistic market settings

What is Idea Generation?

The systematic search for new product ideas

What is a product image?

The way consumers perceive an actual or potential product