Chap 10 develop new products and service

Question 1

Product Line

Answer 1

a group of products that are closely related as they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price range.

Question 2

Product Mix

Answer 2

the number of product lines offered by a company.

Question 3

two ways to classify the products

Answer 3

i. type of users

ii. degree of tangibility

Question 4

two types of users

Answer 4

customer goods and business goods

Question 5

degree of tangibility in terms of product classification

Answer 5

i. durable goods

ii. services

Question 6

4 types of customer goods

Answer 6

i,. convenience goods

ii. shopping goods
iii. specialty goods
vi. unsought goods

Question 7

def. convenience goods

Answer 7

the goods purchased frequently with minimum shopping effort.

Question 8

def. shopping goods

Answer 8

Consumers compare several alternatives on criteria such proce, quality or style.

Question 9

def. specialty goods

Answer 9

Specialty goods are items for which the consumer makes a special effort to obtain.

Question 10

def. unsought goods

Answer 10

those products which the consumer either does not know about; or knows about them and does not initially want to have them

Question 11

what is the difference between production goods and support goods?

Answer 11

Production Goods: Items used in the manufacturing process that become a part of the final product.

Support Good:
Items purchased and used to assist in the production of the final product.

Question 12

three uses of support goods

Answer 12

Installations (e.g., Buildings, Fixed equipments; Capital intensive; Price by Competitive Bidding
Accessory Equipment (e.g., Tools and Office Equipment; purchased from distributors)
Supplies (e.g., Frequently bought with minimum efforts)
Services to assist buyers.

Question 13

Explain the difference between product mix and product line.

Answer 13

A product line is a group of products that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same type of outlets, or fall within a given price range. 
Each product line has its own marketing strategy, whereas a product mix is a number of product lines offered by a company.

Question 14

To which type of good (business or consumer) does the term derived demand generally apply?

Answer 14

Derived demand generally applies to an organizational or business good.

Question 15

how to define the newness of a new product? 4 aspects

Answer 15

1. Newness Compared with Existing Products
2. Newness in Legal Terms – 12 months
3. Newness from the Company’s Perspective
4. Newness from the Consumer’s Perspective (must involving substantive learning by the consumer)

Question 16

the three levels of newness for a company

Answer 16

in three levels: Brand Extension (Min Risk); significant innovation; revolutionary product.

Question 17

the three levels of newness for a customer:

Answer 17

1. Continuous innovation: No new behavious must be learned
2. Dynamically continuous innovation: Minor behavious are learned
3. Discontinuous innovation: Entirely new behavious must be learned

Question 18

what is the market emphasis on continuous innovation?

Answer 18

generate awareness among consumers and obtain widespread distribution

Question 19

what is the market emphasis on dynamically continuous innovation?

Answer 19

advertising benefits to consumers , highlight point of differentiation and consumer advantages

Question 20

what is the market emphasis on dynamically discontinuous innovation?

Answer 20

educate consumers through product trial and personal selling

Question 21

what are 7 categories of new services

Answer 21

1. Major service innovations
2. Major process innovations
3. Service-line extensions
4. Process-line extensions
5. Supplementary-service innovations
6. Basic service improvements
7. Style changes

Question 22

ex. . Major service innovations

Answer 22

radically new services & processes

Question 23

ex. Major process innovations

Answer 23

Major process change to deliver service in a new way (online services)

Question 24

ex. Service-line extensions

Answer 24

: Service extensions by banks in offering insurance to their customers

Question 25

ex. Process-line extensions

Answer 25

a more improved process for more convenience, less time, higher value

Question 26

ex. Supplementary-service innovations

Answer 26

Offering additional services – Fedex or Costco offering Internet

Question 27

Basic service improvements

Answer 27

Offering additional services – Fedex or Costco offering Internet

Question 28

Style changes

Answer 28

Simplest type of change – Changing styles – e.g., uniforms, colour schemes, etc

Question 29

6 Marketing Reasons for New-Product Failures

Answer 29

Insignificant “point of difference”

Incomplete market and product definitions

Too little market-attractiveness

Poor execution of the marketing mix

Poor product quality on critical factors

Bad timing

No economical access to buyers

Question 30

what is the protocol of a market and product definitions?

Answer 30

1. A well defined target, 2. Specific customer needs, wants and preferences and 3. What the product will be and do

Question 31

what are the 7 steps in a new-product process

Answer 31

1. new-product strategy development
2. idea generation
3. screening and evaluation
4. business analysis
5. development
6. marketing testing
7. commercialization

Question 32

function at step 1 new-product strategy development

Answer 32

defining the role for a new product in terms of the firm’s overall corporate objectives

Question 33

objectives at step 1 new-product strategy development

Answer 33

Identify Markets and Strategic Roles:
Types of innovation, Time Horizon, budget, the role of the new product, its fit and contributions, etc.
Cross-Functional Teams

Question 34

def. six sigma

Answer 34

A measure to delight the customer by achieving quality through highly disciplined process that is focused on developing and delivering near-perfect product and services

Question 35

What are main sources of new-product ideas?

Answer 35

(1) Customer and supplier suggestions, (2) Employee and co-worker, (3) Research and development breakthroughs, and (4) Competitive products

Question 36

What is the difference between internal and external screening and evaluation approaches used by a firm in the new-product process?

Answer 36

Internal approach means the firm evaluates the technical feasibility of the proposal and whether the idea meets the objectives defined in the new-product strategy development step. This is all done “in house.” External evaluations of concept tests consist of preliminary testing of the new-product idea (rather than the actual product) with consumers.

Question 37

function in the second stage of new-product process

Answer 37

Idea generation involves developing a pool of concepts that are candidates to become new products.

Question 38

function in the third stage of new-product process

Answer 38

Screening and evaluation involves internal and external evaluations of the new product ideas to eliminate ideas that do not warrant further effort

Question 39

what is internal approach in stage 3

Answer 39

Internal Approach: Evaluate if the new idea matches corporate objectives and it is feasible (technically, technologically, $, Time, etc.).

Question 40

what is external approach in stage 3

Answer 40

Concept Tests: written descriptions for potential customers to ask a lot of questions and generate a lot of feedback in:
On line
Simulated labs
Limited tests

Question 41

function in the 4th stage of new-product process

Answer 41

: Business Analysis involves specifying the features of the product and the marketing strategy needed to commercialize it and making necessary financial projections.

Question 42

function in the 5th stage of new-product process

Answer 42

Development. The Product ideas that survive proceed to actual development which turns the idea on paper into a prototype

Question 43

function in the 6th stage of new-product process

Answer 43

: Market Testing involves exposing actual products to prospective consumers under realistic purchase conditions to see if they will buy.

Question 44

what is a simulated test marketing

Answer 44

limited sale: asking potential customers to evaluate against competitors

Question 45

STM

Answer 45

simulated test marketing

Question 46

function in the 7th stage of new-product process

Answer 46

Commercialization involves positioning and launching the new product in full-scale production and sales.

Question 47

Retailers are now requiring two fees (ask manufacturers to pay) for featuring new products:
what are they?

Answer 47

Slotting fees and fallure fees

Question 48

slotting fees

Answer 48

a payment required of manufacturers to place a new item on a shelf

Question 49

failure fees

Answer 49

a penalty payment by manufacturers to compensate the retailer for sales its valuable shelf space never made.

Question 50

How does the development stage of the new-product process involve testing the product inside and outside the firm?

Answer 50

(1) Conducting lab tests and (2) Consumer tests

Question 51

What is a test market?

Answer 51

Market testing is the exposing of actual products to prospective consumers under realistic purchase conditions to see if they will buy.

Question 52

What is the commercialization of a new product?

Answer 52

It is positioning and launching a new product in full-scale and sales.

Question 53

def. a product

Answer 53

A good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers and is received in exchanges for money or some other unit of value

Question 54

Consumer Goods

Answer 54

Products purchased by the ultimate consumer.

Question 55

Business Goods

Answer 55

Products that assist directly or indirectly in providing products for resale.

Question 56

Support Goods

Answer 56

Items used to assist in producing other goods and services.

Question 57

Production Goods

Answer 57

Items used in the manufacturing process that become part of the final product.