MKT 574: Chapter 8: Product strategy and new product development

Why is the PLC useful?

1. provides a strategic framework for market analysis 2. tracks historical trends 3. identifies future market conditions

_______ references the length of product usage

durability

_______ products have a long product life and are often more expensive.

durable

The _____ benefit is the fundamental need met by the product.

essential

True or false: Most customers care about how the product arrived in the marketplace.

false

new to the world product

product that has not been available before

Which of the following are categories of diffusion of innovations groups? Select all that apply.

1. early majority 2. late majority 3. laggards 4. innovators 5. early adopters

A(n) __________ is any product attribute or performance characteristic.

feature

durable products

longer product life and are often more expensive.

style

look and feel of the product

_____ are natural or farm products that become part of the final product

mateirals

laggards

product avoiders want to evade adoption as long as possible. resistant to change, they will put off the purchase until there is no other option.

innovators

product enthusiasts enjoy being the first to try and master a new product. Individuals in this group are prime candidates for beta testing and represent a good source of feedback late in the product development process or early in the product launch phase

staples

products people buy weekly or at least Ince a month

unsought goods

products that consumers do not seek out and, indeed, often would rather not purchase at all.

shopping goods

products that require consumers to do more research and compare across product dimensions

speciality goods

a unique purchase made based on a defining characteristic for the consumer

Products that consumers do not seek out and often would rather not purchase at all are called:

unsought goods

nondurable products

usually consumed in a few uses and, in general, cost less than durable products.

A new to the _______ product has not been available before.

world

5 stages before adopting a product

1. awareness: know of the product, but insufficient information to more forward through the adoption process 2. interest: receive additional information and motived to seek out added information for further evaluation 3. evaluation: combine all information and evaluate the product for trial purchase 4. trials: purchase the product for the purpose of making a value decision 5. adoption: purchase the product with the intent of becoming a dependable user

Everyday items that a company needs to keep running are called:

MRO supplies

business case analysis

an overall evaluation of a product and usually assesses the product's probability of success

features

any product attribute or performance characteristic and is often added to or subtracted from a product to differentiations it from competitors

product

anything that delivers value to satisfy a need or want and includes physical merchandise, services, events, people, places, organizations, information, even ideas.

Companies generally try to match product performance quality with the market's perception of the _______.

brand

_______ goods are major purchases in support of a significant business function.

capital

parts

consist of equipment either fully assembled or in smaller pieces that will be assembled into larger components and, again, used in the production process.

target market

consists of many people with different predispositions to purchase a product.

Frequently purchased, relatively low-cost products for which customers have little interest in seeking new information or considering other options are rely heavily on prior brand experience and purchase behavior are called _______ goods.

convenience

The company's translation of the essential benefit into physical, tangible elements is called the _______ product.

core

Extending the core product to include additional features, designs, and innovations that exceed customer expectations results in the __________ product.

enhanced

When developing the product opportunities, the product's physical characteristics are defined by targeting the ______ delivered to the customer.

essential benefits

enhanced product

extends the core product to include additional features, designs, and innovations that exceed customer expectations.

True or false: the best product is always the most successful product.

false

True or false: the majority of ideas from external sources, including distributors, will pass the screening process.

false

The size, shape, color, and other physical elements of a product is called its:

form

convenience goods

frequently purchased, relatively low-cost products for which customers have little interest in seeking new information or considering the options and rely heavily on prior brand experience and purchase behavior

mateirals

goods incorporated into the company's finished product as a result of the manufacturing process - nature or farm products that become part of the final product

individual diffusion process

how long it takes a product to move from first purchase to last purchase

The _____ ______ process is how long it takes a product to move from first purchase to last purchase.

innovation diffusion process

New products are created either through acquisition or ________.

internal development

Product ideas are generated in one of two ways: ______ or ______ to the firm.

internal or external

A group of products linked through usage, customer profile, price points, and distribution channels or needs satisfaction is called a product:

line

go to market mistakes

made when a company fails to stop a bad product idea from moving into product development

emergency products

objects people purchase in an emergency such as a hurricane

early majority

product watchers want to be convinced of the product's claims and value proposition before making a commitment. This group is considered critical to long term success as they take the product into the mainstream

impulse products

purchased without planning

form

size, shape, color, and other physical elements - many products considered very similar In functionality can be differentiated by variation in packaging or product delivery

product mix

small, start up companies frequently have a relatively limited product mix, but, as companies grow, their list of products grows as well

Unique purchases made based on a defining characteristic for the consumer are called _____ goods.

specialty

_____ refers to the physical aspect of products.

tangibility

The two product classifications that define the nature of the product are ______ and ______.

tangibility and durability

MRO (maintenance, repair, operating) supplies

the everyday items that a company needs to keep running

essential benefit

the fundamental need met by the product.

tangibility

the physical evidence of a service or the observable aspects that help customers form advanced opinions about the service despite its general intangibility

What is the essential component in delivering value?

the product experience, which is why it is considered the heart of marketing

conformance

the product's ability to deliver on features and performance characteristics promised in marketing communications

durability

the projected lifetime of the product under specific operating conditions, an important discriminating product characteristic and are willing to pay a premium for products that can demonstrate greater durability

True or false: Since the 1990s, companies now screen new products much earlier in the development process.

true

stock keeping unit (SKU)

unique identification number used to track a product through a distribution system, inventory management, and pricing.

stop to market mistake

when a good idea is prematurely eliminated during the screening process

Product life cycle (PLC)

defines the life of a product in four basic stages 1. introduction 2. growth 3. maturity 4. decline

repairability

ease of fixing a problem with the product, as part of the product evaluation process.

Products that require consumers to do more research and compare across product dimensions such as color, size, features, and price are called ______ goods.

shopping

identify product opportunities

1. companies must generate sufficient new product ideas 2. ideas need to be evaluated before resources are committed to development

3 specific tasks of the development stage

1. define and test the product idea 2. create a marketing strategy for the product 3. analyze the product's business case

Place the tasks in the define the product opportunity process in the proper order.

1. define and test the product idea 2. create a marketing strategy of the product 3. analyze the product's business case

Which of the following are tasks associated with identifying potential product opportunities?

1. companies must generate sufficient new product ideas 2. ideas need to be evaluated before resources are committed to development

the criteria used to prioritize ideas vary by company but often include:

1. time to market: how long will it take to develop and get the product to market 2. ROI: what is the expected date of return for the dollars invested in the project 3. new product fit with overall company product portfolio

business goods 2 dimensions

1. whether or not they are used in the manufacturing process 2. cost

product line

a group of products linked through usage, customer profile, price points, and distribution channels or needs satisfaction

Match the term to its corresponding sales/profit outlook.

introduction: sales are low, typically high failure rate. High marketing and product costs growth: sales grow at increasing rate. profits become healthier as operations are streamlined maturity: sales continue to increase but a decreasing rate. Cost minimization has reached full extent. decline: long-run drop in sales. profit margins dramatically reduced

durability

length of product usage

capital goods

major purchases in support of a significant business function

_______ products are usually consumed in a few uses.

nondurable

Equipment either fully assembled or in smaller pieces that will be assembled into larger components and, again, used in the product process are called:

parts

late majority

product followers are price-sensitive and risk-averse. They purchase older-generation or discontinued models with lower prices and fewer product features

The _____ _______ ______ defines the life of a product in four basic stages: introduction, growth, maturity, and decline.

product life cycle

reliability

the percentage of time the product works without failure or stoppage.

The combination of all the products offered by a company is called the product:

mix

Which of the following are the three categories of business goods classification? Select all that apply.

1. mateirals 2. parts 3. MRO supplies

3 major activities in new product development

1. identify product opportunities 2. define the product opportunity 3. develop the product opportunity

Place the major activities in the new-product development in the proper order

1. identify product opportunities 2. define the product opportunity 3. develop the product opportunity

Which of the following are stages of the innovation diffuse process? Select all that apply.

1. interest 2. evaluation 3. awareness 4. trial 5. adoption

generate new ideas

1. internal 2. external

Which of the following are a part of the product launch? Select all that apply.

1. define the product's objectives 2. specify the value proposition 3. plant the marketing tactics 4. implement the marketing plan

Which of the following are primary objectives of the screening process? Select all that apply.

1. eliminate product ideas judged unworthy of further consideration 2. help prioritize ideas that pass the initial screening and evaluation

product classifications

1. tangibility 2. durability 3. consumers 4. business - both tangibility and durability define the nature of the product - both consumers and businesses deal with who uses the product

Which of the following are important considerations in determining the amount of market testing that will be done on a new product?

1. the cost of being wrong (the cost of launching a failed product) 2. the selling season, which may demand a faster product rollout 3. competitors' marketing strategies

core product

companies translate the essential benefit into physical, tangible elements

Match the reason for new product failure with its corresponding category

company: inadequate value proposition customers: change I purchase priorities competitors: aggressively attack new competition environment: economic changes

Match the category of consumer goods classification with its typically examples

convenience: toiletries, gasoline, and paper products shopping goods: clothes, furniture, and major appliances speciality goods: iPhones, porches, and Bang & Olufsen electronic equipment Unsought goods: life insurance, fire extinguishers, and medical supplies

early adopters

product opinion leaders seek out new products consistent with their personal self-image. This groups is not price-sensitive and is willing to pay the prime premium for a product. At the same time, they demand a high level of personalized service and product features