O # 1. Why firms create new products

Question 1

innovation

Answer 1

Process in which ideas are transformed into new products services

Without innovation P. have 2 choices:

1. current M. Products///current customers
2. Same product // another market.. similar customer

Question 2

Changing customer needs

Answer 2

Deliver value by:
Satisfying changing needs
Keeping C. from getting bored with the current product.

Question 3

Market saturation

Answer 3

longer product in the market //// market saturated

Question 4

Managing risk through diversity

Answer 4

broader Portfolio // diversify the risk// firm value

Multiple products are able to withstand external shocks:
Changes in C. preferences
Intense competitive activity

Question 5

Fashion Cycles

Answer 5

Comp. fashion trends:

most sales come from new products