Week 6 - developing new product and innovation Flashcards
business can obtain products in 2 ways
acquisition - buying a whole company to produce someone else product
new product development efforts (r+d)
define new product development
the development of original products, product improvements, product modifications and new brands through the company’s own R+D efforts
solves new problem that has not yet been solved
define idea generation
systematic search for new product idea
sources of ideas
internal idea sources - r+d
external idea sources - from customers, competitors, suppliers and others
crowd sourcing - inviting broad communities of people (customers, employees, scientists, researchers) into the new product innovation process
Explain the main steps in the NEW product development process
idea generation
idea screening - screen new product ideas in order to spot good ideas and drop poor ones as soon as possible
concept development and testing - testing new product concepts with a group of target consumer to find out if the concept have strong consumer appeal
consumers favour products that offer must quality, performance and features, therefore the org should devote its self to making continuous product improvements. A detailed version of the new product stated in consumer terms
marketing stratergy development - designing an initial marketing strategy for a new product based on product concept
business analysis - review of sales, costs and profit projections for new product to determine if financially viable and supporting of company objectives
product development - promoting company growth by offering modified or new products to current market segments; developing the concept product into a physical product ensuring the product idea can be turned into a feasible product
test marketing - stage in which product and marketing program are introduced into more realistic market settings
commercialisation - introducing a new product into the market
define idea screening
screen new product ideas in order to spot good ideas and drop poor ones as soon as possible
define product concept
consumers favour products that offer must quality, performance and features, therefore the org should devote its self to making continuous product improvements. A detailed version of the new product stated in consumer terms
define product image
the way the consumer perceive an actual or potential product
define concept testing
testing new product concepts with a group of target consumer to find out if the concept have strong consumer appeal
define marketing strategy development
Designing an initial marketing strategy for a new product based on product concept
Define business analysis
review of sales, costs and profit projections for new product to determine if financially viable and supporting of company objectives
Define product development
promoting company growth by offering modified or new products to current market segments; developing the concept product into a physical product ensuring the product idea can be turned into a feasible product
Define test marketing
stage in which product and marketing program are introduced into more realistic market settings
Explain managing new product development
Customer centred development = focuses on finding new ways to solve customers problems and create more customer satisfying expierences
Sequential product development = company departments work individually to complete it’s stage of the process before passing the new product along to the next department and stage
team based new product development = company departments work together in cross-functional teams overlapping the steps in the product development process to save time and increase efficiency
define product life-cycle
The course of a products sales and profits during it’s lifetime; involves 5 distinct stages, development, introduction, growth, maturity, and decline
define introduction stage
the stage in the product life cycle in which the product is first distributed and made available for purchase
define growth stage
Stage in the production lifecycle when a products sales start climbing quicky
Define maturity stage
the stage in the product life-cycle when sales growth slows or levels off
Define decline stage
The stage in the product life-cycle when a products sales decline
explain introduction stage
low sales
high cost per customer
negative profits
customers are innovator
marketing objective; create product awareness
advertising ; build product awareness
sales promotion: heavy to entice trial of product
explain growth stage
rising sales avg cost per customer rising profits early adopter (customers) few competitors
marketing objective: maximise market share
offer product extensions: warranty, service etc
build intensive distribution
build awareness
reduces sales promotion take advantage of consumer demand
explain maturity stage
peak sales low cost per customer high profits middle majority (customers) multiple competitors
‘Maximise profit while defending market share’
diversify brand and models price to match or beat competitors more intensive distribution stress brand differences - advertising increase sales to encourage brand switching
explain declining stage
dealing sales low cost per customer declining profits laggers declining number of competitors
‘reduce expenditure and milk brand’
cut price
selective distribution
reduce amount of advertising only targeted to most loyal
reduce sales
