Ch. 11 New Product Development Process

New-to-the-world

Products that are entirely new and have never been seen before.

New product lines

Products that are introduced to a new category that the company has not previously offered.

Line extensions

Products that are variations of existing products within the same category.

Improvements/revisions

Products that have been modified or enhanced from their original versions.

Repositioned

Products that are marketed for a different use or to a different audience.

Idea screening

The process of evaluating ideas to determine their feasibility.

Business analysis

The assessment of the market potential and profitability of a new product.

Development

The stage where the product is designed and developed.

Test marketing

The process of introducing a product to a limited market to gauge its performance.

Commercialization

The full-scale launch of a product into the market.

Innovators

Consumers that have a strong desire to have all new products on the market, accounting for 6-10% of the population.

Early Adopters

Consumers who make up 14-18% of the population, love publicity, and act as leaders of opinion.

Early Majority

Consumers who represent 30-33% of the population and are more skeptical about new technologies. Do thorough research before purchasing.

Late Majority

Consumers who make up 30-33% of the population, often buy products due to peer pressure. Lower income, lower education, older.

Laggards

Consumers who account for 6-10% of the population, often live in remote areas and have limited access to media. Oldest, least income and education.

Complexity

The usage of a product.

Compatibility

The degree to which a new product fits with the consumer's existing lifestyle and knowledge.

Relative advantage

The degree to which a product has a better advantage over other products.

Observability

The extent to which the benefits of a new product are visible to consumers.

Trialability

The ability for consumers to try a product risk-free, which increases the likelihood of purchase.

Product Life Cycle (PLC)

The stages a product goes through from introduction to decline.

Introductory stage

The phase when a new product is first launched, characterized by low sales and high costs.

Growth stage

The phase where sales increase, costs decrease, and profits rise.

Maturity stage

The phase where sales peak and profits are high, with a stable number of competitors.

Decline stage

The phase characterized by falling sales and profits, with a contracting customer base.

Perishability

The characteristic of services that makes them time-sensitive; unsold services result in lost revenue.

Intangibility

Suggested quality, physical cues to communicate quality of service to consumers.

Heterogeneity

The variability in service quality.

Inseparability

The production and consumption of services are inseparable and spontaneous.

Service Quality

The assessment of how well a delivered service meets customer expectations.

Reliability

Dependability, consistency, and accuracy

Responsiveness

How long it takes for companies to respond back about an issue

Assurance

Ability to convey trust to the customer.

Empathy

Customers being able to relate to the problem.

Tangibles

Physical work and cues to indicate the quality of care in the service.

The Service Gap Model

A framework that identifies gaps between customer expectations and actual service delivery.

Knowledge gap

The discrepancy between what customers want and what the company thinks they want.

Policy gap

Gap between what the company's understanding is of customer expectations versus the policy that they create.

Delivery gap

The difference between the service that was promised and the service that was delivered.

Communication gap

The difference between what was promised to the customer and what actually occurred.

Customer gap

What the customer expects versus what they receive and how they perceive it.

Product (Service) Strategy

The approach taken to deliver services based on how they are processed.

People processing

Services that require customers to be present during the service delivery.

Possession processing

Services that are performed on the customer's possessions.

Information processing

Services that involve the processing of customer information.

Mental stimulus

Services that provide entertainment or mental engagement, such as movies and concerts.

Divesting

Getting rid of old technology and moving on to other products.

Harvesting

Keep the product and market it as a niche product.