Topic 03- Product decisions Flashcards
Types of Innovations (3)
1) Continuous innovation
2) Dynamically continuous
3) Discontinuous innovation
Definition: Continuous innovation
Involves the slight modification of an existing product (ex.: laundry detergent)
Definition: Dynamically Continuous
Changing the product so that using it requires a moderate amount of learning.
(ex.: Surface Pro 4, Surface Book)
Definition: Discontinuous Innovation
Developing a new product that creates major changes in how we do a task.
(ex.: mobile phones instead of landline phones, self driving cars)
Types of Adopters (5)
1) Innovators (2,5%)
2) Early adopters (13,5%)
3) Early mainstream (34%)
4) Late mainstream (34%)
5) Lagging adopters (16%)
1) Early market
2) Mainstream Market
3) Late Market
Definition: Innovators
Will buy the product earlier than anyone else and buy it for intrinsic reasons or the so-called “feel-good factor”. - Techles
Definition: Early adopters
Desire the product before anybody else has it, as they want to be the trend setters. -Visionaries
Definition: Late mainstream
The product has pushed throug and now prices have bottomed out and the technology has become standard. Most of the people have the product at this point.- Conservatives
Definition: Lagging adopters (leggards)
Will buy the product with close to 0% interest in buying due to their “if it aint broke don’t fix it” mentality. - Skeptics
Definition: Early mainstream
Product has overcome the chasm ande becomes profitable. As products have now become cheaper, this group also purchases them. - Pragmatists
Factors to enhance new product adoption (7) (Akzeptanz)
1) Communicability (easy to tell)
2) Divisibility (Teilbarkeit)
3) Timing
4) Complexity ! (easy to use product, ex.: clock radio hotel)
5) Locale
6) Compatibility
7) Relative Advantage
Reasons why products fail (5)
1) Don´t fulfill need or want
2) Pushed despite poor marketing research
3) Technical problems
4) Overestimation of market size
5) Design compromises functionality
Marketing grid
1) Existing markets, existing products
- Market penetration (walmart-grocery delivery)
2) Existing markets, new products
- Product developement (Nissan Leaf, first mass-produced EV)
3) New markets, existing products
- market developement (IKEA entering chinese market)
4) New markets, new products
- Diversifikation (Coca Cola Fairlife milk)
New Product Developement (NPD) Stages (8)
1) Idea Generation
2) Idea Screening
3) Concept Development & Testing
4) Business Analyses
5) Marketing Analyses
6) Product and Prototype Development
7) Test Marketing
8) Commercialization/ Launch
Product Lifecycle (PLC) Stages (5)
1) Product Development
2) Introduction
3) Growth
4) Maturity
5) Decline
Idea Generation (Internal) (2)
1) R&D
2) Employee recommendations
Idea Generation (External) (6)
1) Customers
2) Competitors
3) Supply chain employees
4) Product consultants
5) Acquisition of other businesses
6) Crowdsourcing
(ex. : Dell, Lego)
Idea Screening No Go’s (5)
The new product idea should not be:
1) Inconsistent with company offerings
2) Cost prohibitive to produce
3) Difficult to explain and for consumers to understand
4) Be a money loser in the long run
5) Just plain bad/stupid
Idea Screening Go’s (4)
A new product idea should be:
1) Consistent with the company offerings
2) Cost effective
3) Simple to explain and for consumers to understand.
4) Be profitable in the long run
Definition: Business analysis (3)
1) Financial viability of the idea
2) review of the sales, costs and profit projections for a new product
- > To find out wherther the projections satisfy the company´s objectives
Developing the Marketing Strategy (NPD) (3)
Initial marketing strategy for a new product
The marketing strategy statement…
1) Should describe the target market, planned value proposition, sales, market-share and profit goals for the first few years.
2) Outlines planned product price, distribution and marketing budget for the first year.
3) Describes the planed long-run sales, profit goals and marketing mix strategy.
Definition: Product prototype developement and testing
Product and use viability of the product idea
- turn idea into reality
- test with a representative and small group of customers
- obtain reactions to the tests
- prefect the product
Product concept developement and testing
Taking the idea to the drawing board involving the customer
-Presenting the concepts to consumers symbolic, physically or with a word or picture description
-Ask customers about their reactions to the concepts
.mas sense?
.appeal?
.buy it?
Definition and Pros and Cons of test marketing
Select test markets based on various criteria
-The product and its proposed marketing program are intoduced into realistic market settings
Pros:
- Gather intelligence on market conditions
- Problems can be unearthed and corrected
Cons:
- High costs
- time consuming
- Possibility of competitors copying you or even improving on your test product
Definition: Commercialization of the Idea/Product
Introducing a new product into the market taking Timing and place into consideration
Product Life Cycle
1) Introduction -Product is launched and sales grow slowly
2) Growth - sales grow rapidly, gets profitable
3) Maturity - peak sales, high profits, competition, advertising
4) Decline - Sales fall-advertising is topped, maybe production
