Chapter 8 - Developing New Products

Question 1

what is a product?

Answer 1

anything that is of value to a consumer and can be offered through a marketing exchange

Question 2

why do firms create products?

Answer 2

New market offerings provide value to both firms and the consumers. They also must innovate in order to stay in business

Question 3

What is market saturation?

Answer 3

The longer a product exists in a market, the more likely the market will become more saturated, without any new products or service the value of the firm declines.

Question 4

what is diffusion of innovation or adoption of innovation?

Answer 4

The process by which the use of an innovation, whether a product or a service, spreads throughout a market group over time and over various categories of adopters.

Question 5

What are pioneers?

Answer 5

New product introductions that establish a completely new market or radically change both the rules of competition and consumer preferences in a market; also called breakthroughs.

ex: Iphone/smartphone

Question 6

what are first movers?

Answer 6

Product pioneers that are the first to create a market or product category, making them readily recognizable to consumers and thus establishing a commanding and early market share lead.

Question 7

what are innovators?

Answer 7

Create product and first to adopt

Question 8

what are early adopters?

Answer 8

The second group of consumers in the diffusion of innovation model, after innovators, to use a product or service innovation; generally don’t like to take as much risk as innovators.

Question 9

what are early majority?

Answer 9

A group of consumers that don’t like to take much risk and therefore tend to wait until bugs are worked out.

Question 10

what are late majority?

Answer 10

The last group of buyers to enter a new product market

Question 11

what are laggards?

Answer 11

Consumers who like to avoid change and rely on traditional products until they are no longer available.

Question 12

what are the 4 factors affecting product diffusion?

Answer 12

compatibility, relative advantage, complexity and trial-ability, and observability

Question 13

what is compatibility?

Answer 13

more compatible, diffusion will increase

Question 14

what is observability?

Answer 14

when products are easily observed (their benefits are easily identifiable), diffusion increases

Question 15

What is complexity?

Answer 15

The more confusing a product is the slower the diffusion will occur. Makes the product more compatible with needs of different people in different cultures

Question 16

what is trial-ability?

Answer 16

if a consumer can play around with a product, diffusion will increase

Question 17

what is relative advantage?

Answer 17

if the product is perceived to be better than substitutes, than diffusion will be quicker

ex: swifter mops are a lot better than normal mops.

Question 18

what are the steps for company developing new products

Answer 18

step 1 - Idea generation
step 2 - Concept testing
step 3 - Product development
step 4 - Market Testing
step 5 - Product launch
step 6 - Evaluation of results

Question 19

what is idea generation?

Answer 19

generating ideas through R&D to come up with a product/service idea

Question 20

what is concept testing?

Answer 20

The process in which a concept statement that describes a product or a service is presented to potential buyers or users to obtain their reactions.

Question 21

What is product development?

Answer 21

Entails a process of balancing various engineering, manufacturing, marketing, and economic considerations to develop a product.

Question 22

what is market testing?

Answer 22

testing within a market, either a premarket test which is before they bring it to the actual market, or test marketing which is brining it to certain geographic locations like different cities

Question 23

what is product launch?

Answer 23

If the product is tested successfully then it will launch

Question 24

what is evaluation of results?

Answer 24

After the product has launched, marketers must undertake a critical post launch review. (satisfaction of technical requirements, customer acceptance, satisfaction of the firms financial requirements

Question 25

What are the components of the product life cycle?

Answer 25

introduction stage, growth stage, maturity, and decline