Chapter 6: Product Development Flashcards
What is a New Product?
A product new to a company in any way; all come with a new set of risks.
What defines a New-to-the-Market product?
Inventions never seen before; creates a new market.
What is Disruptive Technology?
Technology that shakes up or establishes a new industry.
What are New-category Entries?
Products new to a company, but not new to the market.
What are Product-Line Extensions?
A group of related products marketed by a company.
What are Revamped Products?
Products with new packaging, different features, updated designs, and functions.
What are the stages of the New-Product Development Process?
The process of conceiving, testing, and launching a new product in the marketplace.
What is New-Product Strategy Development?
The direction a company will take when it develops a new product.
What is Idea Generation?
The stage where a product concept lists new products.
What is Idea Screening?
Evaluating ideas to determine their fit.
What is Business Analysis?
Analyzing a new product to determine its profitability potential.
What is Product Development?
Determining if a product can be produced and offered in a way that meets customer needs and generates profits.
Example: Prototypes.
What is Test Marketing?
Introducing a new product in final form to a limited market to test all 4Ps and fine-tune the marketing plan.
What is Product Launch?
Completing all final preparations for making a fully tested product available to the market.
How can risks be reduced in new product development?
By listening to customers about their needs and wants, committing to the New Product Development Process, and understanding market trends through environmental scanning.
What is Product Adoption?
Occurs when consumers purchase and use a new product.
What is Diffusion?
The process by which a product is adopted and spreads across various types of adopters.
What is the Consumer Adoption Process?
The process by which customers formally accept and purchase products.
What are the types of adopters?
Different categories of consumers based on their adoption speed and behavior.
Who are Innovators?
Consumers that adopt a product almost immediately after it’s launched.
Who are Early Adopters?
Consumers that purchase and use a product soon after it has been introduced, but not as quickly as Innovators.
Who are Early Majority?
Consumers that gather more information and spend more time deciding to make a purchase.
Who are Late Majority?
Consumers that rely on others for information, buying a good or service because others have already done so.
Who are Laggards?
Consumers that don’t like change and may remain loyal to a product until it’s no longer available for sale or stops working.
What are the product characteristics that affect adoption rate and diffusion?
Competitive Advantage, Compatibility, Observability, Complexity, Trialability
What is Competitive Advantage?
The superior position a product enjoys over competing products if consumers believe it has more value than other products in its category.
What does Compatibility refer to in product characteristics?
How well a new product fits into potential customers’ needs, values, product knowledge, and past behaviors.
What is Observability in the context of product diffusion?
When people can see others using a product and perceive value in its use, then the product will diffuse quickly.
How does Complexity affect product diffusion?
The easier a product is to use and understand, the faster it will diffuse.
What is Trialability?
The extent to which a potential customer can examine the merits of a new product without having to spend a lot of money or time doing so.
What are the 5 stages of the Product Life Cycle?
1) New Product Development 2) Introduction 3) Growth 4) Maturity 5) Decline
What occurs during the New Product Development stage?
The 7 stages of product development, before the product is ‘born’.
What happens during the Introduction stage of the Product Life Cycle?
Occurs after the firm launches the product into the marketplace and innovators begin to buy it; sales are slow.
What characterizes the Growth stage of the Product Life Cycle?
Increases in sales, profits, and competition; Early adopters and Early Majority.
What is the focus during the Maturity stage?
The firm focuses on profitability and maintaining the firm’s market share for as long as possible; Late Majority and repeat buyers.
What characterizes the Decline stage of the Product Life Cycle?
Decreases in sales and profits; no work into improving or changing the product.
What are the Product Strategies during the Introduction stage?
Offer small number of models.
What are the Place Strategies during the Growth stage?
Make intensive effort to expand distribution.
What are the Promotional Strategies during the Maturity stage?
Promote to point out brand attributes and differentiating features.
What are the Price Strategies during the Decline stage?
Price to maintain small profit; increase price if product appeals to niche market.
What is the ethical obligation in New Product Development?
Obligation to produce safe products; quick recall if issues are found.
What does Sustainability in New Product Development refer to?
Building products and services in a way that eliminates negative environmental impacts.
