Marketing Chapter 10

New product categories are

new to world

new to firm

additions to existing product lines

improvements and revisions to existing

repositioned

New to world products are

Revolutionary or breakthrough products that create entirely new markets; also called pioneer products

New to firm products are

products that are already in the market place but brand new to that firm/company

additions to existing product lines are

products that are already in the product line and just adding a new one to it (ex. new oreo flavor)

improvements and additions to existing products are

improvements: making small ones

additions: upgrading to new product

Repositioned products are

existing products in the market that appeal to a different target market

rewards of product development are

expansion into new markets

increased market share

increased revenue

risk of product development is

Lack of differentiation 

Financial feasibility 

Technical feasibility 

Poor timing

lack of differentiation in risk and rewards of product development are

A new product is too similar to existing products and does not stand out from competitors

financial feasibility in risk and rewards of product development are

A product may fail if it costs too much to develop or is not expected to make enough profit.

technical feasibility in risk and rewards of product development are

A product may fail if the company lacks the technology, skills, or resources to develop it

poor timing in risk and rewards of product development are

A product may fail because it is introduced too early or too late for the market.

new product development process is

1. idea generation

2. idea screening and evaluation

3. concept development and testing

4. market strategy development

5. business anayalsis

6. product development

7. test marketing

8. commercilization

9. evaluation of results

key thing after each new product and development process steps

do i have a viable business idea

idea generation categories are

internal r&d (research and development)

r&d consortia

licensing

internal research and development for new product development process is

generates brand new market from an idea and owns everything about it

research and development for new product development process is

companies working with universities/governments to try and engage in new product development

licensing for new product development process is

company has intellectual property

brand vs idea

categories in licensing for new product development are

brand

brainstorming

outsourcing

competitors products

customer input

brand in licensing is

what the company owns (ex. clemson owns the tiger paw)

idea within licensing is

license out to other companies

owns things like patent

brainstorming within licensing is

within the organization

outsourcing within licensing is

a company hires another company to perform certain tasks or develop a product instead of doing it internally

competitors products within licensing is

using a competitiors products and reverse engineering it

reverse engingeering in competitiors products for licensing is

Taking the product apart to understand how it is made, works, and can it be improved

customer input in licensing

using customer feedback, ideas, and suggestions to develop or improve products to better meet their needs

idea screening and evaluation are

filtering ideas by asking questions

filtering ideas by asking questions are with

associated services

associated services in filtering ideas are

is there additional things i need to offer with my idea

concept and development categories are

concept statement

concept testing

concept statement in concept and development categories is

Who will use the product 

What benefits will it provide 

When is it usually consumed

concept testing in concept and development categories is

presented to potential customers

looking for in potential customers of concept testing

obtain reactions via research

marketing strategy development includes

outlines

outlines in marketing strategy development are

4 p’s

budget

goals

goals in outline in market strategy development are

sales

market share

profit

business analysis does what

asses business approval

asses business approval for business anaylsis is

payback

break even

payback in asses business approval is

recovering cost from what was spent

break even in asses business approval is

revenue catches up to the cost

product develpement categories are

initial product design

alpha testing

beta testing

prototype developed in product development are

initial product design are

alpha testing in product development is

employees that test prototype in the firm/organization first

beta testing in product development are

potential customers trying the product first

test marketing categories are

sales wave research

controlled test

test

simulated

crowdsourcing

sales wave research in test marketing is

intended target audience is given product to try for free at first and then they can buy it again at a reduced cost

controlled test in test marketing is

company test new product in selected stores while controlling other factors to see how well it sells

test in test marketing is

full launching the product into market usually a few cities at a time

very expensive to do

simulated test marketing in test marketing is

testing a new product with a small group of consumers in a fake shopping environment to see if they would buy it

crowdsourcing in test marketing is

getting ideas, feedback, or help from a large group of people on a new product before it launches

commercilization in new product development process is

entire market or rolling launch

entire market or rolling launch categories are

expensive

coordinate marketing mix

critical timing

things included in coordinate marketing mix in entire market/rolling launch is

what is the product

whats the price point

how to promote

where to distribute

evaluation of new product development process is

the results of a new product to see if it was successful

diffusion of innovation is

not all customers buy a product at the same time

different customers demand at different times

diffusion of innovation categories are

innovators

early adopters

early majority

late majority

laggards

innovators in diffusion of innovation are

first to have new product

enjoy taking risk (have time, money, etc)

highly knowledgable

early adopters in diffusion of innovation

Less risk tolerant than innovators 

Wait for review to purchase 

Considered opinion leaders (crucial for word of mouth)

Determine size of overall market

early majority in diffusion of innovation are

few products are profitable until early majority adoption (product makes or break)

avoid risk

late majority in diffusion of innovation are

last group to buy new product

represents market saturation

laggards in in diffusion of innovation are

Do not buy new products 

Dislike change 

Depend on traditional products until no longer available 

Don’t spend time trying to market to

characteristics in innovation are

relative advantage

compability

complexity

divisibility/triability

communicability/observability

relative advantage for characteristics in innovation is

as a new product goes up it diffuses perfectly with the old one

compatibility for charactericts in innovation are

culture, lifestyle, way we do things, provide vibe diffuse quickly does not goes slower

complexity for characsterics in innovation is

how hard it is to learn how to use product

more complex it is the slower it diffuses through market

divisibility/triability for charasterics in innovation is

how easy it is to sample or try a product

easier to try faster it will spread to new customers

communicability/observability for characteristics in innovation

can you see other people using the product and benefiting from it will make it spread quickly

product life style stages

introduction

growth

maturity

decline

introduction stage in product life style

building awareness

slow sales growth

profits non existent (heavy start up cost)

growth stage in product life style

Demand and sales increase

Competitors emerge, but some drop out 

Develop new product versions: colors, styles, etc 

Product becomes profitable

economies of scale in product becomes profitable in life style stages is

cost per unit goes down and getting quantity discounts

maturity stage in product life style is

sales peak

often longest stage

market saturated

consider marketing strategies

market saturated in maturity stage in product life style stage is

trying to defend against comeptition

market saturated categories are

Market share 

Battle on price 

Profits fall: revenue is lower

decline stage in product life style

Significant decline in sales and profitability 

Serve niche consumer group or exit the market

categories in serving niche customer group decline stage is

Harvest: keep it alive 

Divest: get rid of product, product in decline