MKT 3000, Ch. 12

Concept

a brief written description of the product; 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 consumers will try and then continue to use it

Product development

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

Laggards

make up roughly 16 percent of the market. These consumers like to avoid change and rely on traditional products until the products are no longer available

Late majority

represents 34 percent of the market, they are the next group of buyers to enter a new product market. When they do, the product has achieved its full market potential.

Early majority

represents approximately 34 percent of the population, is crucial because few new products and services can be profitable until this large group buys them

Brainstorming

sessions during which a group works together to generate ideas

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

Lead users

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

Pioneers

those new products that establish completely new markets or radically change the rules of competition as well as consumer preferences in a market

Alpha testing

when the firm attempts to determine whether the product will perform according to its design and whether it satisfies the need for which it was intended

Test marketing

a method of determining the success potential of a new product in which it introduces the offering to a limited geographical area prior to a national launch

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 they hire an outside firm to help generate ideas and develop new products and services

Reverse engineering

involves taking apart a product, analyzing it, and creating an improved product that does not infringe on the competitor's patents, if any exist.

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, which has the same properties as a new product but is produced through different manufacturing processes

First movers

the first to create the market of product category, they become readily recognizable to consumers and thus establish a commanding and early market share lead

Innovation

the process by which ideas are transformed into new offerings, including products, services, process, and branding concepts that will help firms grow

Diffusion of innovation

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

Concept testing

the process in which a concept statement is presented to potential buyers or users to obtain their reactions

Early adopters

the second subgroup that begins to use a product or service innovation. They don't like to take as much risk as innovators do but instead wait and purchase the product after careful review.

Product life cycle

the stages that products move through as they enter, get established in, and ultimately leave the marketplace

Innovators

those buyers who want to be the first on the block to have the new product or service

Beta testing

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