Product Management 2 Flashcards
New products defined fom companys perspective
1) New-to-the-world
2) Reposition existing products
* Add new market segments (e.g., cell phones from business usage to adults to teens).
3) Cost reduction
* Introduce lower-cost products with fewer features or scaled-back warranty or service
Customers perspective on new products?
Question is rather: Is the product new to me?
Types of new-to-the-world products
1) Disruptive innovations are so innovative they create a fundamental change in the marketplace (e.g., connected clothing).
2) Sustaining innovations are newer, better faster
Why do products fail?
-company
-customers
-competitors
-environment
Why do products fail? -company
-inadequate value proposition
-poor marketing communications
-products doesn´t meet expectations
-failure to fully develop product
Why do products fail? -customers
-change in purchase priorities
-higher expectations
Why do products fail? -competitors
-aggresively attack new competition
Why do products fail? -environment
- Changes in government regulation of legislation.
- Changes in societal demands.
- Economic changes
3 major activities of the new product development
1) Identify product opportunities
2) Define the product opportunity
3) Develop the product opportunity
Howy can new ideas being generated
1) Internal
2) External
3) Customer
4) Distributors
Which mistakes can occur when evaluating ideas?
1) Go-to-market mistake
2) Stop-to-market mistake
Explain go-to-market mistake
keep a bad product idea from moving into product development
Explain stop-to-market mistake
A good idea is eliminated prematurely
How to do an initial product idea screening?
- Time to market (how long will it take to develop and get the product to market).
- ROI (what is the expected return for the dollars invested in the project).
- New product fit with overall company product portfolio
How to define the product opportunity?
-Define and test the product concept.
-Create a marketing strategy.
-Analyze the product’s business case.
What are the objectives of defining and testing the product?
-Define the value proposition.
-Identify the target market and purchase frequency.
-Delineate the product characteristics: Look, feel, phycical characteristics, features
How to create the marketing strategy?
Define:
-Budget
-Promotion
-Place
-Price
-Product
-Target market
How to conduct a business case analysis?
1) Total Demand analysis
2) Profitability analysis
How to calculate total demand?
-new purchases
-repeat purchases
-replacement purchase
What includes a profitability analysis?
long- and short-term analysis
Steps in developing a product
1) Product testing: alpha and beta
2) Test the market
-consumer product market tests
-business product market tests
3) Product launch
Define innovation diffusion process
Innovation diffusion process is how long it takes a
product to move from first purchase to last purchase
(the last set of users to adopt the product)
Steps in the consumer adoption and diffusion process
Awareness -> Interest -> Evaluation -> Trial -> Adoption
Types of adopters
1) Innovators
2) Early Adopters
3) Early Majority
4) Late Majority
5) Leggards
Benefits internal idea generation
-key employees know the capabilities of the company and the needs of the market
-direct interaction with customers can lead to good product ideas
Benefits customers idea generation
-will not likely to lead to new-to-the world products but to substantial enhancments of existing products
Benefits distributors idea generation
-particularly good if they are the primary link between customer and company
Definition alpha and beta tesing
-alpha: internal by engineers and employeesw
-beta: done by potential customers
Description consumer market tests
-conducted in representative market
-less then a year
-important to define metrixs for evaluation
Describe business product market tests
-tested differently than consumer products
-smaller scope and fewer companies and individuals
-only customers with long term relationship
-customers provide adittional support
Describe product launch
-important for long-term success
-oftenmarketing budget is front-loaded at product launch to cause trial purchases and repeat as well as replacement purchases
Describe steps consumer product adoption process
A: know product but insufficient information to move forward in adoption process
I: customer wants to receive additional information
E: customer combines all information and evaluates the product for trial purchase
T: customer purchases the product for the purpose of making a value decision
A: purchase the product with intent of becomin a dependable user
