Product Life Cycle: Managing New Products

Question 1

two basic types of demand forecasting methods

Answer 1

1 collecting primary data (data collected especially for the purposes of demand forecasting)

2 analyzing secondary data (existing data)

Question 2

primary data comprises 2 methods

Answer 2

1 expert-judgment forecasts

2customer-research forecasts

Question 3

secondary data methods

Answer 3

1 offering-specific forecasting
2 forecasting by analogy
3 category-based forecasting

Question 4

S-shaped curve

Answer 4

depicts the total number of adoptions at any given point in time

Question 5

bell- shaped curve

Answer 5

number of new (rather than total) adoptions of the innovation at any given point in time

Question 6

New product adoption is influenced by several factors:

Answer 6

1 inherent value of the product
2 relative advantage over similar offering
3 transparenty of product benefits
4 compatibility with related products
5perceived risk that consumers associate with product adoption

Question 7

process of converting ideas to market offerings (6 stages)

Answer 7

1 idea generation
2 concept development
3 business analysis
4 product development
5 market testing
6 `business deployment.

Question 8

the stage- gate approach

Answer 8

minimizes risks

- introduces benchmarks (gates ) to be met in order for an idea to proceed to next stage

Question 9

stages of the market

Answer 9

introduction, growth, maturity, and decline

Question 10

Brand Development Index (BDI)

Answer 10

BDI = percent of an offerings total US sales in market C / percent of total us population in market x

degree to which sales of a given offering have captured the total market potential in geographic area

sales potential of a given brand in a particular market.

Question 11

Category Development Index (CDI)

Answer 11

CDI = percent of a category’s total US sales in market X/ percent of the total US population in market X

sales potential of a given category in a particular market.

Question 12

Delphi Method

Answer 12

multiple rounds of collecting anonymous expert opinions

Each forecast typically consists of two parts: the forecast and its rationale.

Question 13

The adopters:

Answer 13

1 Technology enthusiasts (innovators)
2 Visionaries (early adopters) a
3 Pragmatists (early majority) 
4 Conservatives (late majority)
5 Skeptics (laggards)

Question 14

2 types of demand forecasts

Answer 14

1 market forecasts: estimate the total sales volume that ultimately can be achieved by all companies in a given market

2 sales forecasts: impose a specific time frame for achieving the sales volume.

Question 15

2 type sof primary demand forecasts:

Answer 15

1 expert judgement forecasts (executive forecast senior managers, sales force forecast, industry forecast)

2 customer research forecasts (concept testing, market testing)

Question 16

concept testing

Answer 16

process of evaluating consumer response to a particular offering prior to its introduction to the market.
- prototype, focus group

Question 17

market testing

Answer 17

test markets to estimate market potential and future sales volume

Test markets aim to replicate all relevant aspects of the environment in which the company’s offering will be launched

Question 18

Offering-specific forecasting

Answer 18

secondary data

is based on past data from the sales of the same offering for which the demand is being forecast.

Question 19

forecasting by analogy

Answer 19

forecasting an offering’s performance by comparing its adoption cycle to a functionally similar product for which sales data are available.

eg. 3-D TVs by comparing it to the adoption of analogous products, such as color, flat-screen,

Question 20

Category-based forecasting

Answer 20

involves utilizing available product-category data to estimate a particular product’s performance

high BDI and low CDI indicates that the brand is doing better than competitive offerings, whereas a combination of low BDI and high CDI indicates that the brand is doing worse than competitive offerings.

Question 21

risk involved in new product development

Answer 21

1 market risk (5Cs)

2 technological risk (desired product features might not be achievable with currently available technologies)