Chapter 11: Developing and Managing Products

Question 1

New product

Answer 1

A product new to the world, new to the market, new to the producer or seller, or new to some combination of these.

Question 2

New-product strategy

Answer 2

A plan that links the new-product development process with the objectives of the marketing department, the business unit, and the corporation.

Question 3

Product development

Answer 3

A marketing strategy that entails the creation of new products for current customers.

Question 4

Brainstorming (Idea Generation)

Answer 4

The process of getting a group to think of unlimited ways to vary a product or solve a problem.

Question 5

Screening

Answer 5

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.

Question 6

Concept test (screening)

Answer 6

Evaluation of a new-product idea, usually before any prototype has been created.

Question 7

Business analysis

Answer 7

The second stage of the screening process, where preliminary figures for demand, cost, sales, and profitability are calculated.

Question 8

Development

Answer 8

The stage in the product development process in which a prototype is developed and a marketing strategy is outlined. Usually long and expensive.

Question 9

Test marketing

Answer 9

The limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation.

Question 10

Simulated (laboratory) market testing

Answer 10

The presentation of advertising and other promotion materials for several products, including the test product, to members of the product’s target market.

Question 11

Commercialization

Answer 11

The decision to market a product, mass produce it, advertise it, and ship to distributors.

Question 12

New-product development process

Answer 12

Idea generation, idea screening, business analysis, development, test marketing, and commercialization.

Question 13

Adopter

Answer 13

A consumer who was satisfied enough with his or her trial experience with a product to use it again.

Question 14

Innovation

Answer 14

A product perceived as new by a potential adopter.

Question 15

Diffusion

Answer 15

The process by which the adoption of an innovation spreads.

Question 16

Innovators

Answer 16

First 2.5% to buy; venturesome, more worldly and active, well-educated and get their information from scientific sources.

Question 17

Early adopters

Answer 17

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.

Question 18

Early majority

Answer 18

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.

Question 19

Late majority

Answer 19

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.

Question 20

Laggards

Answer 20

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.

Question 21

Product life cycle (PLC)

Answer 21

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.

Question 22

Product category

Answer 22

All brands that satisfy a particular type of need.

Question 23

Introductory stage

Answer 23

The full-scale launch of a new product into the marketplace.

Question 24

Growth stage

Answer 24

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.

Question 25

Maturity stage

Answer 25

A period during which sales increase at a decreasing rate. Usually longest stage, where most sales are repeats and the market is closer to saturation. Focus on service and repair during this stage.

Question 26

Decline stage

Answer 26

A long-run drop in sales. Consumer tastes may have changed or substitute products have been adopted.

Question 27

Factors influencing diffusion

Answer 27

Product complexity, compatibility, relative advantage, trialability, and visibility.