Topic 03- Product decisions

Question 1

Types of Innovations (3)

Answer 1

1) Continuous innovation
2) Dynamically continuous
3) Discontinuous innovation

Question 2

Definition: Continuous innovation

Answer 2

Involves the slight modification of an existing product (ex.: laundry detergent)

Question 3

Definition: Dynamically Continuous

Answer 3

Changing the product so that using it requires a moderate amount of learning.
(ex.: Surface Pro 4, Surface Book)

Question 4

Definition: Discontinuous Innovation

Answer 4

Developing a new product that creates major changes in how we do a task.
(ex.: mobile phones instead of landline phones, self driving cars)

Question 5

Types of Adopters (5)

Answer 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

Question 6

Definition: Innovators

Answer 6

Will buy the product earlier than anyone else and buy it for intrinsic reasons or the so-called “feel-good factor”. - Techles

Question 7

Definition: Early adopters

Answer 7

Desire the product before anybody else has it, as they want to be the trend setters. -Visionaries

Question 8

Definition: Late mainstream

Answer 8

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

Question 9

Definition: Lagging adopters (leggards)

Answer 9

Will buy the product with close to 0% interest in buying due to their “if it aint broke don’t fix it” mentality. - Skeptics

Question 10

Definition: Early mainstream

Answer 10

Product has overcome the chasm ande becomes profitable. As products have now become cheaper, this group also purchases them. - Pragmatists

Question 11

Factors to enhance new product adoption (7) (Akzeptanz)

Answer 11

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

Question 12

Reasons why products fail (5)

Answer 12

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

Question 13

Marketing grid

Answer 13

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)

Question 14

New Product Developement (NPD) Stages (8)

Answer 14

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

Question 15

Product Lifecycle (PLC) Stages (5)

Answer 15

1) Product Development
2) Introduction
3) Growth
4) Maturity
5) Decline

Question 16

Idea Generation (Internal) (2)

Answer 16

1) R&D

2) Employee recommendations

Question 17

Idea Generation (External) (6)

Answer 17

1) Customers
2) Competitors
3) Supply chain employees
4) Product consultants
5) Acquisition of other businesses
6) Crowdsourcing
(ex. : Dell, Lego)

Question 18

Idea Screening No Go’s (5)

Answer 18

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

Question 19

Idea Screening Go’s (4)

Answer 19

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

Question 20

Definition: Business analysis (3)

Answer 20

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

Question 21

Developing the Marketing Strategy (NPD) (3)

Answer 21

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.

Question 22

Definition: Product prototype developement and testing

Answer 22

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

Question 23

Product concept developement and testing

Answer 23

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?

Question 24

Definition and Pros and Cons of test marketing

Answer 24

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

Question 25

Definition: Commercialization of the Idea/Product

Answer 25

Introducing a new product into the market taking Timing and place into consideration

Question 26

Product Life Cycle

Answer 26

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