Marketing: Chapter 8: Developing New Products and Managing the Product Life Cycle
A sequential product development approach is team-oriented, enabling firms to bring products to market very quickly.
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Acquisitions are not considered a source of new products for organizations.
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An abstract presentation of a product concept is likely to increase the reliability of the concept test.
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Concept testing typically follows the marketing strategy development phase of the new product development process.
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During concept testing, a product is evaluated by management without any input from external sources.
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It's important for a market pioneer to choose a launch strategy that is consistent with competitive positioning strategies.
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Manufacturers rely on distributors and suppliers as internal sources of new product ideas.
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Modifying a product is an ineffective strategy in the maturity period of the product life cycle because the product's decline is irreversible at this stage.
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Product development usually costs the least among all the steps of the new product development process.
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Salon Finish is test marketing its new smoothing shampoo by assessing consumer satisfaction in laboratory stores where hair is washed and blown dry. Salon Pro is using controlled test marketing in this scenario.
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Since suppliers are so close to the market, they are valuable sources of information about consumer problems, marketing opportunities, and new product possibilities.
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The amount of test marketing needed is the same for each new product.
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The business analysis stage is the final step in the new product development process.
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When developing a new product, concept testing should ideally be followed by the business analysis stage.
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Companies that combine a customer-centered approach with team-based new product development gain a big competitive edge by getting the right new products to market faster.
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During the decline stage of the product life cycle, product sales may plunge to zero, or they may drop to a low level where they continue for many years.
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In the new product development process, the purpose of idea generation is to create a large number of ideas and the purpose of the next set of stages in the process is to reduce that number.
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Product modifications are an important source of new products for organizations.
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The Consumer Product Safety Act of 1972 established the Consumer Product Safety Commission, which has the authority to ban or seize potentially harmful products and set severe penalties for violation of the law.
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The federal government has the legal authority to prevent a company from adding products through acquisitions if the acquisition threatens to lessen competition.
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The installation of an innovation management system allows a company to collect, review, evaluate, and manage new product ideas.
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The maturity stage of the product life cycle is characterized by a slowdown in sales growth.
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The moral of the product life cycle is that companies must continually innovate; otherwise, they risk extinction.
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Under a team-based new product development approach, company departments work closely together in cross-functional teams. Overlapping the steps in the product development process saves time and increases effectiveness.
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When a company decides to go international with a product, it must first figure out what products and services to introduce and in which countries.
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