Ch 11: Developing and Managing New Products Flashcards
Define:
Line Extensions
Development of a product that is closely related to exisitng products in the line but meets different customer needs
What are the three aspects of Product Modifications
Quality Modifications
Functional Modifications
Aesthetic Modifications
Define:
Product Modifications
A change in one or more characteristic of the product and the elimination of the original product from the product line
Define:
Quality Modifications
Changes in material or production processes related to a product’s dependability and durability
Define:
Functional Modifications
Changes affecting a product’s versatility, effectiveness, convenience or safety; usually requiring redesign of the product
Define:
Aesthetic Modifications
Changes to the sensory appeal of a product such as altering taste, texture, sound, smell, or appearance
What are the benefits and risks of developing new products
Benefits: Enhances poduct mix
Risks: Expensive to develop, creates risk of market failure, loss of market share without new products
What are the seven phases of New-Product Development
Idea Generation
Screening
Concept Testing
Business Analysis
Product Development
Test Marketing
Define:
Idea Generation
Seeking product ideas to achieve objectives
Internal Sources: Field Staff/Salespeople, Think Tanks, Venture Teams, Skunk Works, Employee Referral Programs
External Sources: Customers (staff interactions, suggestion boxes, social media, New Product Consultants
Define:
Screening
Choosing the most promising ideas for further review
Define: Concept Testing
Seeking potential buyer’s responses to a product idea
Define:
Business Analysis
Assessing the potential of a product idea for the firm’s sales, costs and profits
Ask questions like “Does product fit in with existing product mix?”
Define:
Product Development
Determining if producing a product is technically feasible and cost effective
Construction of a prototype or working model
Define:
Test Market
Introducing a product on a limited basis to measure the extent to which potential customers will actually buy it
Such as Rochester, NY
Define:
Commercialization
Deciding on full-scale manufacturing and marketing plans and preparing budgets
