Marketing Chapter 12
Why Firms Create New Products
1) changing consumer needs, 2) market saturation, 3) managing risk through diversity, 4) fashion cycles, 5) improving business relationships
Stages of Product Development
1) idea generation, 2) concept testing, 3) product development, 4) marketing testing, 5) product launch, 6) evaluation of results
Categories of Adopters
1) innovators, 2) early adopters, 3) early majority, 4) late majority, 5) laggards
Product Life Cycle Stages
1) introduction, 2) growth, 3) maturity, 4) decline
Factors Affecting Product Diffusion
1) relative advantage, 2) compatibility, 3) observability, 3) complexity, 5) triability
Diffusion of Innovation
The process by which a new product spreads throughout a market group over time and across various categories of adopters
Test Marketing
a firm introduces the offering to a limited geographical area (usually a few cities) prior to a national launch
Alpha Testing
a firm's R & D department attempts to determine whether a new product will perform according to its design and whether it satisfies the need for which it was intended
Diffusion
a process where a group thinks of as many ways to vary a product or solve a problem as possible without considering the practicality of the ideas
Premarket Tests
conducted before a product or service is brought to market to determine how many customers will try the product and continue to use it
First Mover
products that are first to market in a product category, often establishing an early and commanding market share lead
Reverse Engineering
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
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
Innovation
the process by which ideas get transformed into new offerings, including products, services, processes, and branding concepts that help firms grow
Concept Testing
the process in which a concept statement is presented to potential buyers or users to obtain their reactions
Product Development
the process of balancing various engineering, manufacturing, marketing, and economic considerations to develop a product's form and features or a service's features
Beta Testing
the use of potential consumers to examine a product prototype in a "real use" setting to determine its functionality, performance, and potential use
Pioneers
truly new, unprecedented products that establish a completely new market or radically change both the rules of competition and consumer preferences; also called breakthroughs and new-to-the-world products
Introduction Stage
when a firm actually begins to sell a new product to the entire market