Chapter 8 verhage

Question 1

innovation

Answer 1

creation resulting from study and experimentation

Question 2

product innovation

Answer 2

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

Question 3

me-too product

Answer 3

a new-to-the-company product that is already sold by other firms

Question 4

product line addition

Answer 4

a line extension or a flanker brand, added to the company existing line of products in a particular category

Question 5

product modification

Answer 5

an improvement version of one of the firm’s current products that replaces the original product

Question 6

repositioned product

Answer 6

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.

Question 7

flanker brand

Answer 7

a new item introduced under a new brand name into a product category in which the company already sells products

Question 8

continuous innovation

Answer 8

consumers do not have to change their attitudes or behaviour

maximise consumer awareness and availability in retail channel

Question 9

dynamically continuous innovation

Answer 9

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

Question 10

disscontinious innovation

Answer 10

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.

Question 11

excess capacity

Answer 11

a new product can be introduced to utilise its excess capacity, it can be an interesting opportunity to offset the fixed overhead costs.

Question 12

substitute products

Answer 12

products that are views by the users are alternatives for other products

Question 13

research & development

Answer 13

the research and development departments constantly work to achieve technological breakthroughs.

Question 14

make or buy

Answer 14

is essentially the choice between doing it yourself and getting someone else to do it

Question 15

return on investment

Answer 15

the potential return on investment is greater if the product is developed internally, because the company is able to keep the entrepreneurial rewards.

Question 16

merger

Answer 16

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.

Question 17

Synergy

Answer 17

the possibility of increasing efficiency and effectiveness of its operation by carrying out activities jointly rather than separately.

Question 18

product development process

Answer 18

the sequence of activities a company uses to transform product ideas into marketable products and services.

Question 19

new product strategy

Answer 19

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.

Question 20

reactive change

Answer 20

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.

Question 21

exploration phase

Answer 21

the stage in the product development process during which the company searches for innovative ideas.

Question 22

screening

Answer 22

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.

Question 23

concept development

Answer 23

phase in which product ideas are analysed to identify features that should be incorporated in a new product.

Question 24

break even point

Answer 24

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.

Question 25

prototype

Answer 25

the first concrete test model able to perform all of the technical functions

Question 26

test marketing

Answer 26

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.

Question 27

roll out strategy

Answer 27

enables marketers to monitor the product sales and avoid the risk of exceeding the production or marketing capacity of the organisation.

Question 28

venture team

Answer 28

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.

Question 29

diffusion process

Answer 29

the spread of new ideas and products through society and their acceptance by various groups in the target market

Question 30

adoption proces

Answer 30

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.

Question 31

adoption categories

Answer 31

1. innovators 2,5%
2. early adopters 13,5%
3. early majority 34%
4. late majority 34%
5. laggards 16%

Question 32

adoption curve

Answer 32

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.

Question 33

innovators

Answer 33

individuals eager to buy new products

Question 34

early adopters

Answer 34

consumers who adapt to innovation

Question 35

early majority

Answer 35

adopt to the new product just before the majority

Question 36

late majority

Answer 36

very sceptical of new products and adopts them after the early majority does

Question 37

laggards

Answer 37

the last people to accept the innovation

Question 38

adoption rate

Answer 38

refers to how quickly a new product or service is accepted by society.

Question 39

relative advantage

Answer 39

may involve physical improvements, aesthetic appeal, a lower price, a trusted brand name or greater eas of use.

Question 40

compatibility

Answer 40

products are more readily accepted if they are consistent with the experiences, attitudes, and needs of potential adopters.