MT1 - Chapter 9 Vocab Flashcards
2 major challenges of product life cycle
new product development
product life cycle strategies
acquisition
buying a whole company, patent or license to produce someone else’s product
new product development
development of original products, product improvements, product modifications, and new brands through the firm’s own product development efforts
8 steps of new product development process
idea generation idea screening concept development and testing marketing strategy development business analysis product development test marketing commercialization
idea generation
systematic search for new product ideas
major sources of idea generation (4)
internal sources (R&D)
customers
competitors
suppliers and distributors
intrapreneurship
encourage employees to develop new product ideas
crowdsourcing
inviting broad communities of people (customers, employees, independent scientists and researchers, and even the public at large) into the new product innovation process
idea screening
screening new product ideas to spot good ideas and drop poor ones as soon as possible
RWW idea screening approach
is it real? (need, product concept)
can we win? (sustainable competitive advantage, resources)
is it worth doing? (company fit, profit potential)
product concept
detailed version of the new product idea stated in meaningful consumer terms
product idea
idea for a possible product that the company can see itself offering to the market
product image
way consumers perceive an actual or potential product
concept testing
testing new product concepts with a group of target consumers to find out if the concepts have a strong consumer appeal
marketing strategy development
designing an initial marketing strategy for a new product based on the product concept
marketing strategy statement
describes the target market, planned value proposition; sales, market share and profit goals for first few years
outlines product’s planned price, distribution, marketing budget
describes planned long run sales, profit goals, marketing mix strategy
business analysis
review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company’s objectives
product development
developing the product concept into a physical product to ensure that the product can be turned into a workable market offering
test marketing
stage of new product development in which the product and its proposed marketing program are tested in realistic market settings
controlled test markets
new products and tactics are tested among controlled panels of shoppers and stores
simulated test markets
researchers measure consumer responses to new products and marketing tactics in laboratory stores or simulated online marketing environments
commercialization
introducing a new product into the market
company must decide on timing and where to launch
customer centered new product development
new product development that focuses on finding new ways to solve customer problems and create more customer satisfying experiences
successful new product development should be (3 parts)
customer centered
team based
systematic effort
sequential product development approach
one company department works individually to complete its stage of the process before passing the new product along to the next department and stage
team based new product development
new product development in which various company departments work closely together, overlapping the steps in the product development process in order to save time and increase effectiveness
innovation management system
collects, reviews, evaluates, and manages new product ideas
yields larger number of ideas
helps create innovation oriented company culture
product life cycle PLC
course of a product’s sales and profits over its lifetime
steps of PLC (5)
product development introduction growth maturity decline
fashion
currently accepted or popular style in a given field
fads
temporary periods of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity
style
basic and distinctive mode of expression
introduction stage
PLC stage in which a new product is first distributed and made available for purchase
growth stage
PLC stage in which a product’s sales start climbing quickly
maturity stage
PLC stage in which a product’s sales growth slows or levels off
modifying the market
(PLC maturity) company tries to increase consumption by finding new users and new market segments for its brands
modifying the product
(PLC maturity) changing characteristics such as quality, features, style, packaging, or tech platforms to retain current users or attract new ones
modifying the marketing mix
(PLC maturity) improving sales by changing one or more of the marketing mix elements
decline stage
PLC stage in which a product’s sales fade away
management may decide to maintain, harvest, or drop product
product steward
protect consumers from harm and the company from liability by proactively ferreting out potential product problems
