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The Marketing Mix > Lecture 5 - Innovation and New Product Development > Flashcards

Lecture 5 - Innovation and New Product Development Flashcards

1
Q

what are the 3 aspects of innovation

A
  • its a process and an output
  • that creates something new
  • and it has value
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2
Q

what are different types of product features (5)

A
  • potential
  • augmented
  • expected
  • generic
  • core
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3
Q

what was Schumpeters (1934) definition of innovation

A

‘new combinations’ of new or existing knowledge, resources, equipment

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4
Q

What are the 3 groups on the innovation wheel

A
  • offering
  • experience
  • configuration
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5
Q

innovation vs invention

A
  • invention is the discovery of new ideas and methods
  • innovation occurs when an invention is commercialised by bringing it into the market
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6
Q

why do firms innovate? (3)

A
  1. competitive advantage
  2. relevance
  3. differentiation
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7
Q

vertical vs horizontal innovations

A
  • vertical innovation is done specifically in a particular field
  • horizontal innovation is something that can be adopted by everyone
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8
Q

what is diffusion of innovation

A

it explains the rate at which new ideas and tech spread

used to understand the rate at which consumers are likely to adopt a new product/service

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9
Q

what are the 5 adopter categories

A
  • innovators
  • early adopters
  • early majority
  • late majority
  • laggards
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10
Q

what are innovators

A
  • those who want to be the first to acquire a new product or service
  • they are risk takers so can cope with high uncertainty
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11
Q

what are early adopters

A
  • those who are not as risk taking as innovators and wait until the product/service receives reviews before purchasing
  • they are considered as role models in their social system, and help the product reach ‘critical mass’
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12
Q

what is the early majority

A
  • represent most of the market (34%)
  • they aren’t risk taking and typically wait till the product/service is tested or used by a peer.
  • they want to purchase things that are proven to work
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13
Q

what is the late majority

A
  • represent majority of market (34%)
  • deemed conservative and tech shy, cost sensitive and skeptical
  • get peer pressured into buying product/service
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14
Q

what are laggards

A
  • last to adopt a new product/service
  • resent change and may continue to rely on traditional products/services until they are no longer available
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15
Q

Factors that affect the rate of innovation diffusion

A
  • relative advantage
  • compatibility
  • complexity
  • trialability
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16
Q

what is relative advantage

A
  • the degree to which customers perceive a new product/service as superior to similar existing products determines the relative advantage
  • the more radical a change, and the higher the relative advantage, the faster would be the diffusion
17
Q

what is compatibility

A
  • measures how closely it relates to needs, value systems, norms and cultures
  • higher compatibility = higher diffusion
  • e.g. pizzas, burgers, noodles took a long time to get diffused into the Indian society, as it contrasted heavily with the daal roti concept.
18
Q

what is complexity

A
  • the level of complexity in a product purchase all affects the diffusion process
  • the easier it is to understand and use a product, the more likely it is to be accepted quickly
  • Technological complexity acts as a barrier to diffusion.
19
Q

what is trialability

A
  • the ease with which a product/service can be tested and tried
  • the higher the degree of trialability, the greater the rate of diffusion.
  • examples of trialability are free samples, smaller than average size packs, demos.
20
Q

Forms of innovation in NPD context

A
  • product replacement and improvements (45%)
  • product addition (25%)
  • new product lines (20%)
  • new to the world products (10%)
21
Q

NPD Process

A
  • new product strategy
  • idea generation
  • screening
  • concept testing
  • business analysis
  • product development
  • market testing
  • commercialisation

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