Chapter 4: Decisions on new products

Question 1

Ways to develop products

Answer 1

Acquisition:
- All of the company
- A patent
- A license for manuufacturing
Development of new products:
- New products
- Uprgades or modifications from ones already existing

Question 2

Risks of developing new products

Answer 2

• Company could over estimate the market
• Product is poorly designed
• Lack of market research
• Poor launch
• Higher costs than expected

Question 3

Requirements for the company when developing new products

Answer 3

• Understand their customers, market and competitors

- Develop products that deliver superior value to customers

Question 4

Steps of new products development

Answer 4

1. Generation of the idea
2. Screening of ideas
3. Development and concept test
4. Marketing strategy and economic analysis
5. Product development
6. Product test
7. Market test
8. Launch and commercialization of the product

Question 5

Steps of new products development: generation of the idea

Answer 5

Internal sources:
- R&D
- Employees
External sources
- Distributors
- Provides
- Competitors
- Journals, shows, seminars
- Customers

Question 6

Steps of new products development: Screening of the ideas

Answer 6

RWW model:
- Is it real?
- Can we win?
- Is it worth doing?
The risk matrix:
- How familiar iis the company with the target market
- How familiar the product or technolgy is
- Each point in the matrix represents an innovation and the risk it’s positioned in

Question 7

Steps of new products development: Development and concept test

Answer 7

1: Transform product idea into concept
2: Test the concept
3: Choose the best one

Question 8

Steps of new products development: Marketing strategy and economic analysis

Answer 8

Marketing strategy:
1: general description, target market, value proposal, sales, market share…
2: Planned price, distribution budget and commercialization
3: benefits and sales objectives, marketing mix strategy
Economic analysis:
- Review of product sales, costs and profit forecasts to see if they meet objectives

Question 9

Steps of new products development: Product development

Answer 9

Developing a prototype close to the product to verify characteristics, performance, etc

Question 10

Steps of new products development: Product test

Answer 10

Testing of prototype by consumers to check fidelity to the concept

Question 11

Steps of new products development: Market test

Answer 11

• Product and marketing strategy are tested under rel market conditions
• Reduced scale commercialization
• Limited market
• Tests:
  Standard test
  Simulated test
  Controlled test

Question 12

Steps of new products development: Launch and commercialization of the product

Answer 12

• When

- Where

Question 13

Processes and models of adoption of new product

Answer 13

• Process of adoption

- Process of difussion

Question 14

Process of adoption of new products

Answer 14

Time between launch and first buy

• Attention
• Interest
• Evaluation
• Test
• Adoption

Question 15

Process of difussion of new products

Answer 15

Time between launch and consumption by the mass market
Types of buyers:
- Innovative
- First adopters
- Early majority
- Late majority
- Laggards