Chapter 8: Developing the product, service, and value of the offering

Question 1

development stage

Answer 1

product is not completely defined and profits do not exist.

Question 2

introduction stage

Answer 2

profits are negative or break even. The product is somewhat basic, as competition is yet to force a need for differentiation. Promotion is used to build awareness, and distribution is necessary

Question 3

maturity stage

Answer 3

• profits have peaked
• competition begin to fight over market share
• promotion is used to reinforce
• distribution intensify to reach all possible segments

Question 4

decline stage

Answer 4

promotion is reduced

price becomes a major part of marketing mix

Question 5

unique or first time value network

Answer 5

elements of the offering have been outsourced

Question 6

growth stage

Answer 6

• profits increase rapidly as new customers accept the product.
• product differentiation becomes apparent.
• Market penetration pricing, promotion is used to remind and reinforce purchase
• distribution is important to train and educate

Question 7

Growth stage problems

Answer 7

significant changes from economies of scale when crossing chasm

• production problems
• personnel problems
• supply chain problems

Question 8

economies of scale

Answer 8

factors that cause the average cost of producing something to fall as the volume of its output increases
ex: $300 for 100 bottles but only $400 for 1000 bottles

Question 9

new product development 7 step model

Answer 9

1. idea generation
2. product screening(team reviews ideas)
3. business case analysis (bussines plan)
4. product/strategy/ plan development (strategy and implementation)
5. test market
6. product launch
7. hand off to innovation/translation team

Question 10

Innovation translation approach

Answer 10

translate success to other potential customers

Question 11

stage gates

Answer 11

simply checkpoint after each stage of the product development process. to ensure it meets initially approved expectations and goals

Question 12

opportunity cost

Answer 12

measurements of those business opportunities that are not pursued because resources have been committed to the new product development

Question 13

proprietary information

Answer 13

is data that, while not protected by patents, is not available to the general public and has significant value to the owner.
ex: trade secrets, formulas, etc.