Lecture 4

Question 1

3 key company product policy decisions

Answer 1

1. Product mix breadth 2. Product line depth 3. Product design

Question 2

What is product mix breadth?

Answer 2

The number of product lines offered.

Question 3

What is product line depth?

Answer 3

Number of items in a product line

Question 4

What is product design?

Answer 4

The product design specs for each cell in the matrix.

Question 5

What are the different strategies for product mix breadth?

Answer 5

1. Hedge Strategy 2. Asset Strategy 3. Solution Strategy

Question 6

Explain hedge strategy(product mix breadth)

Answer 6

Reduces the overall risk of an organization by undertaking a business whose profit stream will negatively correlate with the profit stream of the core business.

Question 7

Explain asset strategy(product mix breadth)

Answer 7

Leverage a key asset of the company that underlies current product offerings. Eg. Bridgestone tire company making rubber buffering systems.

Question 8

Explain Solution strategy(product mix breadth)

Answer 8

Tap into complementary in use offerings enabling the firm to become a total solution provider.

Question 9

Product line depth considerations.

Answer 9

1. Segment needs and product requirements
2. Configuration position and fit
3. Competitive impact
4. Legitimization
5. Category size impact
6. Net impact on margin
7. Brand equity
8. Variety versus scale
9. Collaboration Research

Question 10

Perceived value

Answer 10

The value of the product to the customer, which can be increased through marketing efforts.

Question 11

Characteristics of winning products

Answer 11

1. Superiority 2. Solve a problem 3. Price/Performance 4. Quality 5. Usefulness 6. Clear Benefit

Question 12

3 important marketing metrics

Answer 12

1. Market potential 2. Market demand 3 Market Share

Question 13

Product structure levels

Answer 13

1. Generic 2. Expected 3. Augmented 4. Potential

Question 14

5 attributes which explain the rate of adoption of an innovation by target customers:

Answer 14

1. Relative advantage 2. Compatibility 3. Complexity 4. Trialability
2. Observability

Question 15

New product development spectrum

Answer 15

1. Incremental improvements of existing products 2. Expansion of existing product line 3. New product to firm, but not to the world 4. New product to the world, radical innovation

Question 16

Hierarchy of effects model (assessor model, bases test)

Answer 16

To forecast sales volume for a product before market introduction: 1. Unaware 2. Aware 3. Trial 4. Repeat

Question 17

Stage gate model for new product development

Answer 17

1. Idea generation 2. Scoping 3. Building business case 4. Development 5. Test 6. Launch

Question 18

Product lifecycle stages

Answer 18

1. Introduction 2. Growth 3. Maturity 4. Decline

Question 19

Correlation between Net market contribution and product lifecycle

Answer 19

In early stages NMC is negative, as the product moves through the lifecycle, NMC will breakeven, grow, and peak at late growth before flattening and declining as market demand decreases.

Question 20

brand equity

Answer 20

The value premium that a company realizes from a product with
a recognizable name when compared to its generic equivalent.

Question 21

stock-keeping unit

Answer 21

A specific unit of inventory that is carried as a separate, identifiable unit. In retailing it is the lowest level of identification of merchandise.