Business 102: Principles of Marketing Ch 8. Managing a Product and Retailing

The New Product Development Process

a six-stage process in which potential new products are evaluated

Idea Generation Stage

the creation of new product ideas

Idea Screening Stage

the analysis of new product ideas

Concept Development Stage

the testing of the new product ideas

Market Strategy Stage

company begins marketing the new product concept

Product Development

creating the new product concept

Product Launch Stage

introduction of the product

Which statements are true regarding the new product development process?

1. A product that makes it all the way through the new product development process is more likely to be successfully adopted by its target market.

2. Over eighty percent of potential new products do not make it all the way through the process.

3. The new product development process is a time-consuming and an expensive process

4. All answers are true.

All answers are true.

Assess the best time to stop the new product development process and abandon the development of a potential new product.

1. At any stage at which the developing company finds that the new product is likely to be unprofitable.

2. Right before the product is about to launched and released to the public.

3. During the concept development stage where ideas are created.

4. During the idea generation stage where the company is thinking about what product to develop.

At any stage at which the developing company finds that the new product is likely to be unprofitable.

In which of the following stages of the new product development process are new products test-marketed in small areas?

1. Product launch

2. Market strategy

3. Idea screening

4. Product development

Product development

Determine the stage of the new product development process where a new product shows potential and new products are shown to prospective customers to gain feedback?

1. The concept development stage

2. The idea generation stage

3. The product development stage

4. The market strategy stage

The concept development stage

The development of all new consumer products starts with _____.

1. a consumer need.

2. the idea generation stage.

3. the concept development stage.

4. the product development stage.

a consumer need.

Fun Games

• increased product loyalty

• increased profit margins

• increased sales and leadership in the market

New-To-The-World

truly new because they create a totally new market and are only a small percentage of the new product category

New Product Lines

when a company offers a product from a new category that they haven’t previously offered

Additions To Existing Product Lines

when a company adds a new product that solidifies its area of product offers

Improvements or Revisions of Existing Products

new and improved

Repositioned Products

products that can be targeted or changed slightly to increase sales

Lower-Priced Products

perform similar to competing brands at lower prices

Step 1 - Development Process

examine corporate and marketing objectives to develop the most appropriate product for the company

Step 2 - Idea Generation

• other methods of creating ideas are asking current customers, employees, distributors, competitors and even vendors for ideas

• customers, employees, distributors, competitors and vendors

Step 3 - Idea Screening

• determine if the idea can move forward

• this is done by measuring the idea against your success criteria, which usually involves cost, timing, scalability, and ease of implementation

Step 4 - Business Analysis

this report will examine overall demand, supply, cost and financial data to see if the product is feasible

Step 5 - Development

where engineering creates a prototype of the product and marketing fine-tunes a marketing and target marketing strategy

Step 6 - Test Marketing

limited introduction of a product and marketing program to determine whether or not the product or service will be successful with the target market

Commercialization

the final stage of the new product developmental process and the decision to move ahead with production

What is a limited introduction of a product and marketing program to determine whether or not the product/service will be successful with the target market?

1. Test Marketing

2. New Idea Development

3. Market choice

4. Proposal

5. Research

Test Marketing

Stuffed Snackfood Co. has changed the packaging and removed the salt from its corn chip offering. This is considered a(n) _____.

1. addition to existing product lines

2. revisions or improvement

3. new to the world product

4. repositioned product

5. brand extension

revisions or improvement

A new type of vehicle that is a car with wings that fold down allowing it to fly would be what type of new product?

1. New to the world product

2. Revision

3. Repositioned Product

4. New product line

5. Lower priced product

New to the world product

The Doritos Loco Taco is an example of what type of new product category?

1. Lower priced product

2. New to the world

3. New product line

4. Repositioned

5. Additions to product line

Additions to product line

When Cadillac developed a marketing strategy to change the image of their cars from luxurious but stodgy to cool and high tech, which of these is the term for what they did to their product?

1. Create a new to the world product line

2. Repositioning

3. Brand extension

4. Addition to the product line

5. Product line extension

Repositioning

Culture

learned behavior that provides guidelines for how people act

Cross-Cultural Marketing

when companies decide to sell products to countries with cultures that are different that their own

Product Invention

if the current product offering does not in any way suit the foreign culture, the company launching the new product may need to make radical product changes to their existing product or invent an entirely new product

Product Adaptation

if only a few aspects of the current product offering do not suit the foreign culture, the company launching the new product may need to make only minor product changes to the existing product in order to suit the differing needs of the foreign market

Promotion Adaptation

if the product suits the foreign market but consumers do not understand the current marketing message, the company launching the new product may be able to keep their existing product the same and make promotional strategy changes

Global Standardization

if a company makes no changes to the product or the promotional message in foreign markets, it is using a Global Standardization strategy. Companies that use this type of strategy include Coca-Cola, Revlon and Sony television

When marketing a domestic product to a foreign country or culture, marketers may need to make changes to which of the four P's in their marketing mix in order to suit the foreign market?

1. Any of the 4 Ps alone or in combination

2. Promotion

3. Price

4. Product

5. Place

Any of the 4 Ps alone or in combination

Robo-Vac was not selling well in China because Chinese consumers expect coupons when making big purchases. In order to meet this cultural difference, the marketers at Robo-Vac must make the following type of change to their marketing mix:

1. All of these

2. Global Standardization

3. Product Adaptation

4. Promotion Adaptation

5. Product Invention

Promotion Adaptation

Which behavior is an example of a cultural difference between the United States and a foreign country?

1. Consumers in some Latin American countries still take an afternoon nap or siesta while Americans do not

2. Speaking English in the United States versus speaking Spanish in Costa Rica

3. Shaking hands in the United States versus bowing in Japan

4. Using a knife and fork in the United States versus using chopsticks in China.

5. All of these are correct.

All of these are correct.

Ace Electronics is having a difficult time cracking the Angolan market. They have been using standardized, U.S. style ads featuring NFL football stars visiting the stores. The national sport of Angola is cricket and soccer is also popular. Which of the 4 Ps in the Ace marketing mix must be adjusted to increase sales?

1. Place

2. Price

3. Promotion

4. Personal selling

5. Product

Promotion

A major global carmaker wishes to follow global standardization in its marketing plan. To do this it will _____

1. offer the same vehicles for sale and identical promotions in every country.

2. offer different incentives to each countries dealerships.

3. develop smaller vehicles for low income countries.

4. organize marketing efforts by continent.

5. use a different promotional mix in each country.

offer the same vehicles for sale and identical promotions in every country.

Consumer Adoption Process

• a five stage process that consumers use to evaluate new products

• a new product that does not meet a consumer’s demand can be rejected at any of the five stages

Awareness

introduction stage

Interest

information gathering stage

Evaluation

consideration stage

Trial

sampling stage

Adoption/ Rejection

buy or not buy stage

How might a marketer for snack products move consumers from the evaluation stage to the trial stage?

1. Develop a sweepstakes that all consumers may enter

2. Build new displays for the products in stores

3. Provide free samples of the snacks in grocery stores

4. Provide more information about the snacks

5. Use aggressive television advertising

Provide free samples of the snacks in grocery stores

Which of the following is true regarding the trial stage of the consumer adoption process?

1. All consumers make it to the trial stage for every new consumer product that is introduced.

2. A consumer who makes it to the trial stage has evaluated the product, and decided it might suit his/her needs.

3. The trial stage is the stage where consumers seek out information about the new product.

4. A consumer cannot reject a new product until s/he has been through the trial stage with it.

A consumer who makes it to the trial stage has evaluated the product, and decided it might suit his/her needs.

A marketer thinks she has done a good job of creating awareness about a new product and now needs to move potential buyers along to the interest stage. The best way to do this is to _____

1. provide readily available information about the product.

2. reduce the price of the product.

3. increase distribution and make the product more available.

4. increase the level of advertising.

5. give out more free samples.

provide readily available information about the product.

Which stage of the consumer adoption process involves the consumer seeking information about the product?

1. Evaluation

2. Interest

3. Awareness

4. Trial

5. Adoption / Rejection

Interest

Why must marketers of new products be aware of the consumer adoption process?

1. So that when a product is first introduced they can focus their marketing efforts on the pricing.

2. So that they will know if a majority of customers are not making it to a certain stage of the process, and focus their efforts to help them progress to the final stage.

3. So that they will know if the new product can appeal to a younger customer base to focus their efforts on promoting it accordingly.

4. So that they can keep potential customers in the dark about the product along the process in order for them to successfully promote it.

So that they will know if a majority of customers are not making it to a certain stage of the process, and focus their efforts to help them progress to the final stage.

Product Adoption Lifestyle

describes the way a new product progresses through its lifespan

Innovators

venturesome

Early Adopters

young & restless

Early Majority

value shoppers

Late Majority

skeptics

Laggards

traditionalists