Developing and Managing Products

Improvements or Revisions

A category of new product that create existing products that are significantly or slightly changed.

Product Line Additions

A category of new product that creates additions to existing product lines and supplement firm's established product line.

New to the World

A category of new product that creates an entirely new market, smallest category.

New Product Lines

A category of new product that creates new products which the firm has not previously offered and enter an established market.

Lower Price Products

A category of new product that provide performance similar to competing brands at lower prices.

Repositioned Products

A category of new product that takes existing products and targets them at a new market or market segment; happens to change current market's perception of the product or company.

Product Life Cycle

A concept that provides a way to trace the stages of a product's acceptance from its introduction to its decline, used to analyze a brand or product category, tool to help marketers forecast events and suggest strategies.

Innovation

A product perceived as new by a potential adopter.

Simultaneous Product Development

A team oriented approach to new product development where all relevant functional areas and outside suppliers participate in the development process, allows firms to shorten development process and reduct cost, internet is good tool.

Concept Test

A test to evaluate a new product idea usually before any prototype has been created, get consumer reaction to description/ visual representations of proposed product, good predictors of success for line extensions.

Late Majority

Adopt new product because most of friends/ family have it; older, below average income and education, skeptical.

Simulated Market Testing

Alternative to test marketing that shows target market ad materials and test products, target market taken to store, purchases are recorded.

Focus Group

Approach for new product development where the objective is to stimulate insightful comments through group interaction.

Brainstorming

Approach for new product development, is the process of getting a group to think of unlimited ways to vary a product or solve a problem.

Introductory Stage

Full scale launch of new product, high failure rates, little competition, frequent product modification, limited distribution, high marketing and production costs must educate consumers bout product's benefits, negative profits with slow sales increase, promotion focuses on awareness and informing consumers about product's benefits.

Growth Stage

Increasing rate of sales, entrance of competitors, market consolidation, initial healthy profits, promotion focus on aggressive advertising of the differences between brands, wider distribution, key to establish strong market position and product success.

Commercialization

Introducing a new product into the market.

Decline Stage

Long-run drop in sales signals beginning of this stage, rate of decline depends on how fast consumer taste change or substitute products are adopted, large inventories of unsold items, elimination of all nonessential marketing expenses, sales decline as customers discontinue purchasing products.

Innovators

Obsessive about trying new ideas/products, higher income, worldly, well educated, first 2.5% to buy product.

Early Adopters

Oriented to the community and rely on group norms and values, greatest degree of opinion leadership.

Maturity Stage

Sales increase at a decreasing rate, saturated markets, typically longest stage of PLC, lengthened product lines to appeal to additional market segments, service and repair help manufactures distinguish their products from others, heavy promotions required to maintain market share, marginal competitors drop out.

New Product Strategy

Step 1 in the new product development process; A plan that links the new product development process with the objectives of the marketing department, the business unit, and the corporation; must be compatible with marketing, business, corporation objectives, specifies roles new products play in organization's overall plan, describes characteristics of products the organization wants to offer and markets it wants to serve; sharpens focus and provides general guidelines for generating, screening, and evaluating new product ideas.

Idea Generation

Step 2 in the new product development process...

Idea Screening

Step 3 in the new product development process; is the fist filter in product development process, eliminates ideas that are inconsistent with the organization's new product strategy or inappropriate for some other reason.

Business Analysis

Step 4 in the new product development process in which demand, cost, sales, and profitability are considered.

Development

Step 5 in the new product development process where you create a prototype and sketch a marketing strategy, examine manufacturing feasibility, can take a long time and be expensive.

Test Marketing

Step 6 in the new product development process where there is a limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation, takes over a year and can cost over 1 million.

Laggards

Suspicious of new products, tradition is dominant value, marketers typically ignore, last people to buy product.

Online Test Marketing

Test marketing that assess customer demand for potential new product, samples sent to target market.

Test Location

Test site for test marketing that should reflect market conditions in new product's projected market area.

Diffusion

The process by which the adoption of an innovation spreads, there are 5 categories of adopters in this process.

Early Majority

Weighs pros and cons before adopting new product and collect information on various brands.