Chapter 8 - Concept Evaluation System Flashcards
1
Q
Cumulative Expenditures Curve
A
See PowerPoint (The graph shows time to launch on the x-axis and % of expenditures on the y-axis with curves for high tech and consumer products).
2
Q
Risk/Payoff Matrix at Each Evaluation
A
See class notes
3
Q
What is the decay curve of products?
A
A cumulative evaluation/discontinuation curve of NPD projects in a firm
4
Q
Planning the Evaluation System: Four Concepts
- Rolling Evaluation (tentative nature of new products process)
- Potholes
- People
- Surrogates
A
No Answer
5
Q
Rolling Evaluation (or, “Everything is Tentative”)
- Project is assessed continuously (rather than a single Go/No Go decision)
- Financial analysis also needs to be built up continuously
- Run risk of killing off too many good ideas early
- Marketing begins early in the process
- Key: new product participants avoid “good/bad” mindsets, avoid premature closure
A
No Answer
6
Q
Potholes
- Know what the really damaging problems are for your firm and focus on them when evaluating concepts
A
No Answer
7
Q
People
- Proposal may be hard to stop once there is buy-in on the concept
- Need tough demanding hurdles, especially late in new products process
- Personal risk associated with new product development
- Need system that protects developers and offers reassurance (if warranted)
A
No Answer
8
Q
Surrogates
- Surrogate questions give clues to the real answer
A
No Answer
9
Q
A-T-A-R Model of Innovation Diffusion, a method for forecasting sales
- What is the (total) profits equation?
- What is the units sold equation?
- What is the profit per unit equation?
A
- Profits = Units Sold x Profit Per Unit
- Units Sold = Number of buying units x %A x %T x %A x %R x Number of units repeaters buy in a year
- Profit Per Unit = Revenue per unit - Cost per unit
