CH.8 - Products and Innovation

Question 1

• Idea Generation
• Idea Evaluation/Screening
• Concept Development & Testing
• Marketing Strategy
• Business Analysis
• Product Development
• Test Market
• Commercialization

8 steps

Answer 1

New Product Development Process

Question 2

Generate hundreds of ideas to find feasible ones.

Two sources of new ideas:
- internal ideas: find ideas internally in a company, R&D and contributions from employees.
- external ideas: find ideas externally.

Answer 2

Idea Generation

Question 3

Pick out good ideas, spot and pick feasible ones and drop pothers.

Answer 3

Idea Evaluation/Screeing

Question 4

Product Concept: detailed version of the idea stated in meaningful consumer terms. (product idea -> product concept -> product image)

Concepts can be presented to consumers either symbolically or physically.

Answer 4

Concept Development and Testing

Question 5

• Description of target market, planned value proposition, and sales, market share and profit goals for the first few years
• Outline of product’s planned price, distribution and marketing budget for the first year
• Planned long-term sales, profit goals and the marketing mix strategy

Answer 5

Marketing Strategy

Question 6

• Review of sales, costs and profit projections for the new product to find out whether factors satisfy the company’s objectives.

Answer 6

Business Analysis

Question 7

Process goes on with the actual product development.

Answer 7

Product Development Stage

Question 8

The product and proposed markeitng program are tested in in realistic market settings.

amount of test marketing varies with each new product

Answer 8

Test Marketing

Question 9

• To launch or do not launch product.
• Introducing new product into market.

Introduction timing: read the timing of external and internal factors that influence projected profits to introduce product
Introduction place: where to launch product

Answer 9

Commercialization

Question 10

• Continuous Innovation: does not require new behaviors
• Dynamically continuous innovation: requires only minor charger in use behavior
• Discontinuous innovation: making consumer learn entirely new patterns to use the product.

Answer 10

New Product

Question 11

• Products are available and ads are run in few randomly selected metropolitan areas
• Salas are observed and compared to sales in control markets

Answer 11

Area-test markets