02 - New Product Decisions Flashcards
Types of New Products (5)
1) New-to-the-world (Innovations)
2) Replacement - replacing old technology for example
3) Variant
4) Me-too
5) Re-launched
New Product Options (5)
1) Buy other companies
2) Buy patents from other companies
3) Buy a license or franchise from another company
4) New-to-the-world items
5) Improve upon existing products
Reasons for failures of new products (8)
1) Fragmented markets
2) Social, economic, and governmental barriers
3) Development costs
4) Capital shortages
5) Shorter development time
6) Poor launch timing
7) Shorter PLCs
8) Lack of organizational support
New product development stages (5)
1) Idea Generation
2) Idea screening
3) Business Analysis
4) Market Testing
5) Commercialization
Means of generating ideas for new products (8)
1) Interacting with employees
2) Interacting with outsiders
3) Studying competitors
4) Adopting creativity techniques
5) Customer brainstorming
6) Informal customer sessions
7) “fly on the wall” research
8) Treat trade shows as intelligence missions
Ways to draw new ideas from customers (5)
1) Observe customers using product
2) Ask customers about product problems
3) Use customer advisory board
4) Form brand community of enthusiasts
5) Challenge customers to improve product
Product success requirements (4)
1) Unique or superior product
2) High performance-to-cost ratio
3) High marketing dollar support
4) Lack of strong competition
New product success probability formula
P(technical completion) * P( commercialization given technical completion) * P(economic success given commercialization)
Concept testing responses (6)
1) Communicability and believability
2) Percieved value
3) Need level
4) Purchase intention
5) Gap level
6) User targets, purchase occasions and frequency
Product Development Methods (2)
1) Physical Prototypes
2) Customer tests (alpha & beta testing)
Market Testing Methods (2)
1) Consumer-goods market testing
2) Business-goods market testing
Methods of Consumer-Goods Market Testing (3)
1) Simulated test marketing
2) Controlled test marketing
3) Test markets
Approaches to Commercialization (3)
1) First entry
2) Parallel entry with competitor
3) Late entry
Factors to consider when Commercializing (3)
1) Where (Geographic Strategy)
2) To Whom (Target-Market Prospects)
3) How (Introductory Market Strategy)
Definition: Adoption
An individual’s decision to become a regular user of a product
Stages in the Adoption Process (5)
1) Awareness
2) Interest
3) Evaluation
4) Trial
5) Adoption
Factors Influencing the Adoption Process (5)
1) Readiness to try new products and personal influence
2) Relative advantage
3) Product complexity
4) Divisibility
5) Communicability
Definition: Product Life Cycle (PLC)
A life cycle plots the sales curve of a product or a product class over a period of time
PLC Stages (4)
1) Introduction
2) Growth
3) Maturity-Saturation
4) Decline
Introduction Phase Features (6)
1) Product design and development critical
2) Frequent product and process design changes
3) Short production runs
4) High production costs
5) Limited models
6) Attention to quality
Growth Phase Features (6)
1) Forecasting critical
2) Product and process reliability
3) Competitive product improvements and options
4) Increase capacity
5) Shift towards product focus
6) Enhance distribution
Maturity Phase Features (6)
1) Standardization
2) Less rapid product changes - more minor changes
3) Optimum capacity
4) Increasing stability of process
5) Long production runs
6) Product improvement and cost cutting
Decline Phase Features (5)
1) Little product differentiation
2) Cost minimization
3) Overcapacity in the industry
4) Prune line to eliminate items not returning good margin
5) Reduce capacity
