chapter 1 Flashcards
what rate do new products fail at?
40%
how many ideas does a top company have to generate in order to get one winning product?
4.5
how many ideas does a not top company have to generate in order to get one winning product?
11.4
T or F: its a companys goal to have 0 failure
F
what is a firms goal when generating ideas and failures
minimize the dollar losses on failures
Do the best new product firms have a higher or lower percent of profits from new products, and a higher or lower number of ideas per successful new product?
Higher, lower
The best firms have higher success rates and derive ___ sales from new products than other firms
2x
what are 8 strategies the best companies use in order to screen out bad ideas earlier?
- effective process
- most likely to use market research tools
- use SM/ online communities for information
- portfolio analysis for product selection
- formal processes for idea generation/concept development
- open-innovation approach
- involve senior management in decision making
- more likely to have global market
what are examples of some market research tools that top firms use to find new succeeding ideas?
creativity sessions, tradeoff analysis, concept tests, voice of customer, alpha/beta testing, test markets
why is product development challenging?
- many decisions need to be made with inadequate facts and under intense pressure
- have to apply instead of just research concepts
what is the key feature of new product teams?
they are cross-functional
why do firms use global R&D?
- cheap labor force
- talent/idea generation
- leverage global resources for other stages of product development
what are heuristics? why do marketers use them?
rules of thumb, used to move fast enough in generating ideas
process innovation
functions by which something is made, manufactured, and distributed, how its made
product innovation
total operations by which a new product is created/marketed, what is made
what products have the highest risks?
- new to world products
- new to firm product
what are new to world products?
first of their kind, inventions that create a whole new market (ex: first iphone)
what are new to the firm products?
products that take a firm into a category new to the firm, new to company but not new to the market (ex: starbucks breakfast)
what new product type yields the lowest ROI?
additions to existing product lines
what are all the different new product types?
- new to world
- new to firm
- additions to existing product lines
- repositions
- cost reductions
what could be an issue of adding a new product line
the new product line could be to similar to an existing product
1 reason for new product failure?
no need, product didnt meet user need, didnt offer user any value
Which level of product innovativeness has the least amount of financial success?
medium innovation
invention vs innovation
invention describes the dimensions of uniqueness from form to formula to function.
innovation is the overall process from invention to product.
reason for product success?
unique, superior product
Most innovative product categories account for many more
_____
product successes
What is one of the main reasons why new products are critical for companies?
To ensure long-term competitive edge and differentiate from competitors
what do firms experience pressure to do?
accelerate time to market
New Products Process (5 steps)
- opportunity identification
- concept generation
- concept/project evaluation
- development
- launch
some ideas for firms to speed up the time to market
- different teams communicate effectively
- streamline evaluation tasks
- get conditional approvals to move onto development
serial innovators are able to…
- Able to bridge the gap between
technology and the market - finds the important problems
- Understand the problem and current resources/position
- Is the customer willing to pay to solve it? Is there a company fit?
- inventing a solution and checking for customer acceptance with a prototype
- Ensuring product goes into
development and gaining market
acceptance
