Marketing, Grewal & Levy, 7th Edition, chapter 12

R&D consortia

A group of firms and institutions, possibly including government and educational institutions, that explore new ideas or obtain solutions for developing new products.

test marketing

A method of determining the success potential of a new product; it introduces the offering to a limited geographical area prior to a national launch.

product development (product design)

Also called product design; entails a process of balancing various engineering, manufacturing, marketing, and economic considerations to develop a product's form and features or a service's features.

alpha testing

An attempt by the firm to determine whether a product will perform according to its design and whether it satisfies the need for which it was intended; occurs in the firm's research and development (R&D) department.

Product Life Cycle (PLC)

a concept that explains how products go through four distinct stages from birth to death: introduction, growth, maturity, and decline.

Brainstorming

a group activity used to generate ideas.

Licensing

a method used in developing new products in which a firm buys the rights to use a technology or idea from another firm.

Outsourcing

a practice in which the client firm hires an outside firm to facilitate some aspect of its business. in the context of new product development, the outsourced firm helps its client develop new products or services.

concept

brief written description of a product or service; its technology, working principles, and forms; and what customer needs it would satisfy.

premarket test

conducted before a product or service is brought to market to determine how many customers will try and then continue to use it.

laggards

consumers who like to avoid change and rely on traditional products until they are no longer available

beta testing

having potential consumers examine a product prototype in a real-use setting to determine its functionality, performance, potential problems, and other issues specific to its use.

lead users

innovative product users who modify existing products according to their own ideas to suit their specific needs

Reverse Engineering

involves 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

pioneers (breakthroughs)

new product introductions that establish a completely new market or radically change both the rules of competition and consumer preferences in a market

first movers

product pioneers that are the first to create a market or product category, making them readily recognizable to consumers and thus establishing a commanding and early market share lead.

maturity stage

stage of the product life cycle when industry sales reach their peak, so firms try to rejuvenate their products by adding new features or repositioning them.

introduction stage

stage of the product life cycle when innovators start buying the product

decline stage

stage of the product life cycle when sales decline and the product eventually exits the market

growth stage

stage of the product life cycle when the product gains acceptance, demand and sales increase, and competitors emerge in the product category

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 immediately.

late majority

the last group of buyers to enter a new product market; when they do, the product has achieved its full market potential

innovation

the process by which ideas are transformed into new product and services that will help firms grow

diffusion of innovation

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

concept testing

the process in which a concept statement that describes a product or a service is presented to potential buyers or users to obtain their reactions.

early adopters

the second group of consumers in the diffusion of innovation model, after innovators, to use a product or service innovation; generally don't like to take as much risk as innovators but instead wait and purchase the product after careful review

Innovators

those buyers, representing approximately 2.5 of the population, who want to be the first to have the new product or service.

early majority

those whose adoption of a new product signals a general acceptance of the innovation