Chapter 8 verhage Flashcards
innovation
creation resulting from study and experimentation
product innovation
the only new product type that is fundamentally new to both the company and the consumers
a new to the world product that provides a new way of satisfying needs and wants and creates a whole new product category
me-too product
a new-to-the-company product that is already sold by other firms
product line addition
a line extension or a flanker brand, added to the company existing line of products in a particular category
product modification
an improvement version of one of the firm’s current products that replaces the original product
repositioned product
a product intentionally positioned or marketed in a different way to create a new image in the minds of the target market or, alternatively, retargeted for a new use.
flanker brand
a new item introduced under a new brand name into a product category in which the company already sells products
continuous innovation
consumers do not have to change their attitudes or behaviour
maximise consumer awareness and availability in retail channel
dynamically continuous innovation
only minor changes in consumer behaviour are needed to use the new product.
consumers need to adapt their behaviour and consumption patterns slightly to learn how to use the new product
clear positioning and clarification of product benefits through marketing communication
disscontinious innovation
consumer need to make significant behavioural adjustments in using the product.
consumers go through an extensive learning process and behavioural changes in order to use the new product
stimulate consumers learning process through demonstrations, personal selling, samples and no risk trial offer.
excess capacity
a new product can be introduced to utilise its excess capacity, it can be an interesting opportunity to offset the fixed overhead costs.
substitute products
products that are views by the users are alternatives for other products
research & development
the research and development departments constantly work to achieve technological breakthroughs.
make or buy
is essentially the choice between doing it yourself and getting someone else to do it
return on investment
the potential return on investment is greater if the product is developed internally, because the company is able to keep the entrepreneurial rewards.
merger
a new product required through merger involves less risk than with a product developed internally this risk is further reduces when the product is part of an acquisition.
Synergy
the possibility of increasing efficiency and effectiveness of its operation by carrying out activities jointly rather than separately.
product development process
the sequence of activities a company uses to transform product ideas into marketable products and services.
new product strategy
is part of the its overall marketing strategy
should link the firms product development process with the objectives of the marketing department, as well as, indirectly, with the goals of the business unit and the corporation.
reactive change
a company with a reactive strategy adopts a defensive approach. It only implements reactive change in response to events that have already taken place in the environment. These type of firms tend to make me-too products.
exploration phase
the stage in the product development process during which the company searches for innovative ideas.
screening
after generating as many ideas as possible the company decides in each subsequent stage which ideas should be filtered out and which should be given green light for continued development. during this screening stage about 80% of the product ideas are eliminated.
concept development
phase in which product ideas are analysed to identify features that should be incorporated in a new product.
break even point
defined as the quantity of unit sales at which the products total revenue is equal to its total costs.
it is the point at which the incoming revenue from the product or service pays all fixes and variable expenses, but does not generate any profit for the company.
prototype
the first concrete test model able to perform all of the technical functions
test marketing
the introduction of a trial version of the new product on a small scale, but supported by a complete marketing campaign, in a limited area with a population that represents the target group.
roll out strategy
enables marketers to monitor the product sales and avoid the risk of exceeding the production or marketing capacity of the organisation.
venture team
tightly structured, independent group of people from different departments or functional areas of the enterprise. and are usually relieved from their former tasks as they work on the project.
diffusion process
the spread of new ideas and products through society and their acceptance by various groups in the target market
adoption proces
people dont simply go out and buy a new product, instead consumers go through a series of attitudinal and behavioural changes that lead to product trial, purchase and adaption
awareness -> interest -> evaluation -> trial -> adoption.
if consumers stop half way because they find the product unsuitable there is no adoption.
adoption categories
- innovators 2,5%
- early adopters 13,5%
- early majority 34%
- late majority 34%
- laggards 16%
adoption curve
represents a normal distribution of the buyers in a potential market over time and illustrates what percentage of the consumer population falls within each of the adoption categories.
innovators
individuals eager to buy new products
early adopters
consumers who adapt to innovation
early majority
adopt to the new product just before the majority
late majority
very sceptical of new products and adopts them after the early majority does
laggards
the last people to accept the innovation
adoption rate
refers to how quickly a new product or service is accepted by society.
relative advantage
may involve physical improvements, aesthetic appeal, a lower price, a trusted brand name or greater eas of use.
compatibility
products are more readily accepted if they are consistent with the experiences, attitudes, and needs of potential adopters.
