FAU MAR3023 CH 6

simulated test markets

A procedure in which the firm builds a mock shopping experience for participants to observe their response to marketing stimuli.

A group of related products marketed by the same firm is known as a(n)

A product line is a group of related products marketed by the same firm.

revamped product

A product that has new packaging, different features, and updated designs and functions.

A ________ is a mock-up of a good, often created individually with the materials a firm expects to use in the final product.

A prototype is a mock-up of a good, often created individually with the materials a firm expects to use in the final product. Prototype tests ensure that the product will not be a hazard to users or their families, that it can be produced in the company's or supplier's manufacturing facilities, and that it can be manufactured at a cost low enough to generate profits.

Live Well manufactures vitamin-fortified juice. The company used to sell its product in glass jars, but it has recently switched to placing the product in vacuum-packed cartons, which weigh less. This product is an example of

A revamped product is a product that has new packaging, different features, and updated designs and functions. In this case, Live Well has revamped its product by changing the packaging and features of the product.

Disruptive Technology

A technology that displaces an established technology and shakes up the industry, or a ground-breaking product that creates a completely new industry.

open innovation

A way of generating new-product ideas by gathering both external ideas and internal ideas.

What is the first stage in the consumer adoption process?

Awareness is the first stage of the consumer adoption process. In this stage, the consumer has been exposed to the product and knows that it is available on the market.

growth stage of product life cycle

Characteristics: •Rapid increases in sales •Competition appears •Profit peaks •Advertising shifts to selective demand. •Sales grow at an increasing rate because of new people trying the product and repeat purchasers bought again. •Changes appear..."New and Improved!"

In the context of new-product characteristics that impact the adoption rate of a product, ________ refers to how well a new product fits into potential customers' needs, values, product knowledge, and past behaviors.

Compatibility refers to how well a new product fits into potential customers' needs, values, product knowledge, and past behaviors. It affects the diffusion of a new product.

An internal company way for generating innovative product ideas is through

Design thinking is a technique for internally generating new-product ideas. Design thinking is a process that encourages organizations to focus on the people they're creating products for. Cloudsourcing is an external form of idea generation.

The process by which new products are likely to be adopted, the rate at which they will be adopted, and the process through which the products will spread into markets is termed

Diffusion is the process by which new products are likely to be adopted, the rate at which they will be adopted, and the process through which the products will spread into markets. Diffusion gives marketers a way to figure out who will likely buy their product over a period of time, plan an appropriate marketing mix, and forecast potential sales.

Which stage of the product life cycle is characterized by companies taking advantage of economies of scale?

During the growth stage, sales begin to rise, as do profits, as companies begin to take advantage of economies of scale in purchasing, manufacturing, and distribution. Competitors enter the market, which forces prices down.

Fuzzy Friends launched a line of miniature-sized stuffed animals which, became extremely popular within days of their release. Customers queued up to buy the stuffed animals and stores ran out of stock rapidly. However, in a few months, demand for the product started to decline and the company soon discontinued production of the line. Based on the product life cycle curve of the product, the product can be identified as a

Fad product A fad product, one that is very popular for a relatively short amount of time, will have a steep up-and-down curve as consumers rapidly adopt, and then abandon, the product.

Floor Magic has plans to develop a new carpet cleaner. It wants to reduce risks in the development of its new product. In order to help Floor Magic reduce the risk of new-product failure, the company should

Floor Magic should listen to the customer carefully. The voice of the customer should always help guide idea generation and screening in a company, because customer needs and wants drive purchasing.

In the context of the consumer adoption process, which statement is true of the evaluation stage?

In the evaluation stage of the consumer adoption process, the consumer thinks about the product's value and whether to try it out. The consumer evaluates competing products as well to determine which product best satisfies his or her needs and wants.

Min-ji, a young, successful manager, always buys the latest gadgets on the market. She takes pride in buying new technology products as soon as they are launched and shares thoughts about her purchases on her blog. Which type of adopter can Min-ji be categorized as?

Innovators adopt a product almost immediately after the product is launched. These people are always one of the first to try a new product. They are often obsessed with the idea of newness and unafraid to take risks when it comes to trying new products. In addition, they tend to be very knowledgeable, have higher-than-average incomes, possess self-confidence, and choose not to follow conventional norms.

Mel is 60 years old and is a welder. He prefers to buy the same brands he used as a young man and does not trust online retailers. What type of adopter can Mel be classified as?

Laggards tend to be conservative and do not like change; they may remain loyal to a product until it is no longer available for sale. Laggards are typically older and less educated than members of the other categories. Many choose not to use the Internet. They tend to be tied to tradition and are not easily motivated by promotional strategies.

Late Majority (34%)

Last group to enter a new product market The product has achieved its full market potential

Which statement is characteristic of new-category entries?

New-category entries are products that are new to a company but not new to the marketplace. Entering new markets is very important to businesses because it opens up a whole new set of customers and potentially a great deal more revenue and profits.

What is the last stage in the new-product development process?

Once the firm feels the product is ready for the market, it enters the final stage of the new-product development process. The product launch involves completing all the final preparations for making the fully tested product available to the market.

________ is a practice in which companies frequently come out with new models of a product that make existing models outdated.

Planned obsolescence occurs when companies frequently come out with new models of a product that make existing models obsolete.

product

Product marketing is a process of promoting and selling a product to a customer.

Promotional strategies in the ________ stage of the product life cycle usually involve making customers aware of the product and its attributes.

Promotional strategies in the introductory stage usually involve making customers aware of the product and its attributes.

product development stage

Stage of the new product development process at which the product idea has met all expectations and is considered a candidate for further research and testing. In the laboratory, the product is converted into a finished good and tested.

product mix

The combination of all of the products a company sells.

Of all the risks that a company takes in new-product development, which is the most severe?

The highest level of risk occurs when products fail to generate sales or prove to be dangerous and defective. These risks can be devastating to a company if they permanently damage the firm's image to customers.

Product Width

The number of different product lines (categories) a business manufactures or sells

Product Depth

The number of items offered within each product line

sustainable design

The philosophy of designing physical objects, the built environment and services to comply with the principles of economic, social, and ecological sustainability

New Product Development (NPD)

The process of conceiving, testing, and launching a new product in the marketplace.

Product Life Cycle (PLC)

The series of stages a product goes through from the time it is launched into the market until the time it is removed from the market.

Your company is in the process of launching a revolutionary high-tech robotic instrument for use in surgical applications. Knowing that other companies are also looking to tap into this market, what consideration will be most important for your company's product and can mean the difference between success and failure?

The speed with which a company launches a product is its time to market. Some companies release new products in a gradual manner, but firms take a risk by proceeding slowly with product launches. For high-tech products, a quick time to market can be extremely important. Being the first company to market a new product can mean the difference between success and failure.

idea generation

The stage of new-product development in which a set of product concepts is generated from which to identify potentially viable new products.

new-product strategy development

The stage of new-product development in which the company determines the direction it will take when it develops a new product.

Idea Screening

The stage of new-product development in which the firm evaluates an idea to determine whether it fits into the new-product strategy.

maturity stage

The stage of the product life cycle during which the firm focuses on profitability and maintaining the firm's market share for as long as possible.

outsource

To procure goods, services, or ideas from a third-party supplier rather than from an internal source.

Early Majority (34%)

a category is consumers that gather more information and spend more time deciding to make a purchase than innovators and early adopters

Early Adopters (13.5%)

a category of consumers that purchase and use a product soon after it has been introduced, but not as quickly as innovators

Which scenario reflects the trial stage of the consumer adoption process?

a consumer test riding a bike at a sports equipment store to see if she likes it In the trial stage, the consumer tests or uses the product to see if it meets requirements. In this case, the consumer is trying out a bike by test riding it.

prototype

a mock-up of a good, often created individually with the materials the firm expects to use in the final product

planned obsolescence

a practice in which companies frequently come out with new models of a product that make existing models obsolete

cloudsourcing

a process by which specialized cloud products and services and their deployment and maintenance is outsourced to and provided by one or more cloud service providers.

fashion product

a product that comes in and out of favor with consumers

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

competitive advantage

a set of unique features of a company and its products that are perceived by the target market as significant and superior to those of the competition

cannibilization

a situation that occurs when sales of a new product cut into sales of a firm's existing products

concept test

a test to evaluate a new-product idea, usually before any prototype has been created

offshore

an organization that is located or based in a foreign country

consumer adoption process

awareness, interest, evaluation, trial, adoption

product launch

completing all the final preparations for making the fully tested product available to the market

Design Thinking

encourages organizations to focus on the people they're creating products for

fad product

experiences rapid sales on introduction and then an equally rapid decline

product line

group of related products marked by the same firm

New-to-the-market products

inventions that have never been seen before and create a new market

laggards or nonadopters

prefer to do things the way they've been done in the past and are very suspicious of new ideas

new category entries

products that are new to a company but not new to the marketplace

product line extension

products that extend and supplement a company's established product line

high-learning product

products that take longer for consumers to see the benefits of or that do not have a good infrastructure in place to support them

low learning product

products with benefits customers can easily see

decline stage

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

Trialability

the extent to which an innovation can be tried on a limited basis before it is adopted

test marketing

the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation

Diffusion

the process by which a product is adopted and spreads across various types of adopters

time to market

the speed with which a company launches a product

introduction stage of product life cycle

the stage in the product life cycle that occurs after the firm launches the product into the marketplace and innovators begin to buy it

Innovators

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