Marketing ch12
Key characteristics of maturity stage
Adoption of product by the late majority, intense competition for market share among firms, and marketing costs increase
Introduction stage of product life cycle
Characterized by initial losses to the firm due to its high start-up costs and low level of sales revenue as the product begins to take off
When new product launch is a failure..
Company may fail, negative financial impact, and product may not recover from failure
Considered of idea generation
Conducting consumer research, researching competitors' products&services, communicating with firm's R&D department, license technology from research-intensive firms, collaborate with other firm and institution, and brainstorming within the firm
During test marketing, the potential elements of marketing mix that may be used include..
Coupons and advertising
Manufacturer's suggested retail price(MSRP)
Decide at what price they would like products to sell to consumers
Product life cycle
Defines the stages products move through as they enter, get established in, and ultimately leave the marketplace
Compatibility
Degree to which one's product is consistent with the needs and habits of target consumers
Pre market test
Determine how many customers will try and then continue to use the product or service according to small group of potential consumers
Integrated marketing communications(IMC)
Encompasses a variety of communication disciplines used during the introductory phase such as trade/price promotions
Product development/product design
Entails a process of balancing various engineering, manufacturing, marketing, and economic considerations to develop product's form and feature
Decline
Exits the market
Slotting allowance
Fee paid simply to get new products into stores or gain more or better shelf space for their products
Innovators
First category of consumers in terms of their place on diffusion of innovation curve
Prototype
First physical form or service description of a new product
One disadvantage from being a first mover
Having to establish the market all alone
Product development process stage
Idea generation>concept testing>product development>market testing>product launch>evaluation of results
Maturity stage
Industry sales reach their peak which firms try to rejuvenate their product by adding new features or repositioning them
Test marketing
Introduces the offering to a limited geographical area prior to a national launch
Reverse engineering
Involves taking apart a product, analyzing it, and creating an improved product that doesn't infringe on competitor's patents
Introductory price promotion
Limited duration, lower than normal prices designed to provide retailers with an incentive to try the products
Laggards
Make up roughly 16% of the market and rely on traditional products until they are no longer available
Late majority
Next group of buyers to enter new product market
Firms with products in decline stage
Position themselves for niche segment of diehard consumers or those with special needs or they completely exit the market
Diffusion of innovation
Process by which the use of an innovation, whether a product or service, spreads throughout a market group over time and over various categories of adopters
Growth stage
Product gains acceptance, demand, and sales increase, and more competitors emerge in product category
Next step for positive result from market testing
Product launch
Key characteristics of growth stage of product life cycle
Profits rise, rising sales, and typical consumers are early adopters and early majority
Trade promotion
Promotion to wholesalers/retailers to get them to purchase the new products
Concept
Refer to brief written description of the product, technology, working principles, and forms
Trial ability and complexity
Refer to how complicated a product is and how easy or hard it is to try
Licensing
Refers to firm buying the rights to use the technology or ideas from other research-intensive firms
Innovation
Refers to process by which ideas are transformed into new offerings including product, service, process, and branding concept to help firms grow
Concept testing
Refers to the process in which a concept statement is presented to potential buyers or users to obtain their reactions
Early majority
Represents 34% of the population and is crucial because few new products and services can be profitable until large group buys them
Manufacturers coordinate delivery and storage of new products with its..
Retailers to assure that products are available to sell to consumers
Innovators most likely have...
Risk takers, trend starters, and is highly knowledgeable about product/service
When late majority enters the market...
Sales tend to stabilize or even decrease
3 interrelated factors that firms use to measure the success of new product
Satisfaction of technical requirements, customer acceptance, and satisfaction of firm's financial requirements
Promotion for new products is required at each link in..
Supply chain
Trade show
Temporary concentration of manufacturers that provides retailers the opportunity to view what is available and new in the marketplace
Alpha testing
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
Early adopter
They wait and purchase the product after careful review
Advantages experienced by pioneer firms over later entrants
To command greater market share over a longer period, more recognizable to consumers, and establish early market share lead
Beta testing
Uses potential consumers and who examine the product prototype in real-use setting to determine it functionality, performance, potential problems, and other issues specific to its use
Imitators capitalize on..
Weakness of pioneers and gain advantage in the market