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46 Cards in this Set
- Front
- Back
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Chapter 10
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Developing and Managing Products
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New Product
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a product new to the world, market, producer, seller or some combination of these
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Companies that do a good job with product innovation
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Apple, Google, Toyota, GE, Microsoft, P&G, and Nintento
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Average fast moving consumer goods
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70-80 new products per year
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New to World Products (discontinuous products)
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create entirely new market. Represent smallest category of new products
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New Product Lines
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these products which the firm has not previously offered allow it to enter an established market.
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Additions to existing Product
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Includes new products that supplements a firm's established line.
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Improvements or revisions of existing products
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may be significantly or slightly changed
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Repositioned Products
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existing products targeted at a new market or market segments
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Lower Price Products
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products that provide performance similar to competing brands at a lower price
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New Product Development Process
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1. New product strategy
2. Idea Generation 3. Idea Screening 4. Business Analysis 5. Development 6. Testing Market 7. Commercialization == New Product |
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Companies most likely to succeed in developing and introducing new products do the following
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1. make the long term commitment needed to support innovator & new product development
2. Use company specific approach, driven by corporate objectives & strategies w/ well defined new product strategy at its core 3. Capitalize on experience to achieve & maintain competitive advantage 4. Establish an environment- management style, organizational structure and degree of top management support- conducing to achieving company specific new product & corporate objectives |
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New Product Strategy
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a plan that links the new product development process w the objectives of the marketing department, business unit, and the corporation
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New Product Strategy ==
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organization's overall marketing strategy
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New Product ideas come from many sources
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customers, employees, distributors, competitors, vendors, research, & development (R&D) and Consultants
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For each successful new product introduced,
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the company needs between 50-60 other new product ideas somewhere in its new product development process
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Product Development
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a marketing strategy that entails the creation of marketable new products; the process of converting applications for new technologies into marketable products
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Brainstorming
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the process of getting a group to think of unified ways to vary a product or solve a problem
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Screening
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the first filter in the product development process, while eliminates ideas that are inconsistent w the organizations new product strategy or are obviously inappropriate for some other reason
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Concept Test
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A test to evaluate a new product idea, usually before any proto-type has been created
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Business Analysis
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the second stage of the screening process where preliminary figures for demand, cost, sales and profitability are calculated
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Forecasting Market Share
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for a new entry is a challenge
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Development
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stage in the product development process in which a prototype is developed and is a marketing strategy is outlined
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Simultaneous Product Development
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a team oriented approach to new product development
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Test Marketing
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the limited introduction of a product & a marketing program to determine the reactions of potential customers in a market situation
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High cost of Test marketing
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usually takes a year or longer and can exceed costs of $1 million. Some remain in test markets even longer
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Internet offers
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fast cost effective way to conduct marketing test
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Simulated (laboratory) market testing
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the presentation of advertising & other promotion materials for several products, including a test product to members of the product market
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Commercialization
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the decision to market that product.
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Adopter
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a consumer who was happy enough w his/her trial experience with a product to use it again
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Innovation
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product perceived as new by a potential adopter
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Diffusion
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process by which the adoption of an innovation spreads
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Firms that routinely experience success in new product introductions tend to share the following characteristics
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-history of carefully listening to customers
-obsession w producing best product possible -vision of what market will be in future -Strong Leadership -Commitment to new product development -project based team approach to new product development -getting every aspect of product development process right |
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Product Characteristics & rate of adoption
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*Complexity- degree of difficulty involved in understanding & using a new product. more complex the product, slower is its diffusion
*Compatability- degree to which new product is consistent w existing values & product knowledge, past experiences, & current needs. Incompatible products diffuse more slowly than compatible products * Relative advantage degree to which a product is perceived as superior to existing substitutes. * Observability degree to which benefits or other results of using products can be observed by others and communicated to target customers. |
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For Instance
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Fashion items and vehicles are highly visible compared to personal care items
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2 types of communication aid diffusion process
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word of mouth communication among consumers and communication from marketers to consumers.
Communication directly from the marketer to potential adopters. messages directed toward early adopters should normally use different appeals than messages directed toward the early majority, late majority or leggards. |
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Product Cycle Life
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PLC concept that provides a way to trace the stages of a product's acceptance from its intro -birth- to its decline -death-
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Product Category
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all brands that satisfy a particular type of need
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Early adopters more important than innovators bc
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they make up a larger group, more socially active, and usually opinion leaders
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Introductory Stage
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the full scale launch of a new product line into the marketplace
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Growth Stage
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2nd stage of PLC when sales typically grow at an increasing rate, many competitors enter the market, large companies may start to acquire small pioneering firms, & profits are healthy
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Maturity Stage
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period during which sales increase at a decreasing rate
service & repair assume more important roles as manufacturers strive to distinguish their products from others. |
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Product design changes
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tend to become stylistic rather than functional
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Decline Stage
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long run of drop in sales
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PCL concept encourages marketing managers to
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plan so they can take the initiative instead of reacting to past events
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Chapter 11
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Service and Nonprofit Organization Marketing
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