Chapter 11: Developing and Managing Products Flashcards
New product
A product new to the world, new to the market, new to the producer or seller, or new to some combination of these.
New-product strategy
A plan that links the new-product development process with the objectives of the marketing department, the business unit, and the corporation.
Product development
A marketing strategy that entails the creation of new products for current customers.
Brainstorming (Idea Generation)
The process of getting a group to think of unlimited ways to vary a product or solve a problem.
Screening
The first filter in the product development process, which eliminates ideas that are inconsistent with the organization’s new-product strategy or are obviously inappropriate for some other reason.
Concept test (screening)
Evaluation of a new-product idea, usually before any prototype has been created.
Business analysis
The second stage of the screening process, where preliminary figures for demand, cost, sales, and profitability are calculated.
Development
The stage in the product development process in which a prototype is developed and a marketing strategy is outlined. Usually long and expensive.
Test marketing
The limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation.
Simulated (laboratory) market testing
The presentation of advertising and other promotion materials for several products, including the test product, to members of the product’s target market.
Commercialization
The decision to market a product, mass produce it, advertise it, and ship to distributors.
New-product development process
Idea generation, idea screening, business analysis, development, test marketing, and commercialization.
Adopter
A consumer who was satisfied enough with his or her trial experience with a product to use it again.
Innovation
A product perceived as new by a potential adopter.
Diffusion
The process by which the adoption of an innovation spreads.
Innovators
First 2.5% to buy; venturesome, more worldly and active, well-educated and get their information from scientific sources.
Early adopters
Next 13.5% to buy and the most important to market to, as they are opinion leaders and can influence others and are in more groups.
Early majority
Next 34% to buy. They are the friends and neighbours of the early adopters and are heavily influenced by groups and rely on them for information. They are deliberate.
Late majority
Next 34% to buy. Adoption stems from a pressure to conform because friends have the product and they tend to be older and below average in income and education, and are skeptical. Depend on word-of-mouth.
Laggards
Final 16% to adopt. Don’t rely on group norms but the past and tradition heavily influences their decisions. Adopt once the product is out-dated.
Product life cycle (PLC)
A concept that traces the stages of a product’s acceptance, from its introduction (birth) to its decline (death). Stages are introduction, growth, maturity, and decline.
Product category
All brands that satisfy a particular type of need.
Introductory stage
The full-scale launch of a new product into the marketplace.
Growth stage
The second stage of the product life cycle when sales typically grow at an increasing rate, many competitors enter the market, large companies may start to acquire small pioneering firms, and profits are healthy. Distribution is key during this stage.
