MKTG 300 - Chapter #12 Material

Firms introduce new products because of?

• Changing customer needs

Marketing should help find directions of new product development. It is about defining a?

• Dynamic benefit dimension

Market pioneers have advantages which include?

• Greater market share

• Reputation

• More funding and resources

Managing innovation diffusion starts from?

• Customer acquisition / stimulate demand 

Innovators?

• Adventuresome, curious and risk takers.

• 2.5% on the curve

Early adopters?

• They don’t take as much risk as innovators do but wait and
  purchase the product after careful review. Thus, this market waits for the first reviews. 

• 13.5% on the curve

Who tend to enjoy novelty and often are regarded as the opinion leaders for particular product categories?

• Early adopters

Early majority?

• They are influenced by early adopters and innovators.

• 34% on the curve

Who will not buy if it is not visibly accepted?

• Early majority

Perceived attributes of innovations which affect product diffusion?

• Relative Advantage

• Compatibility

• Observability

• Complexity and Trialability

Relative advantage?

• The degree to which an innovation is perceived better than the idea it supersedes.

Compatibility?

• The degree to which an innovation is perceived as consistent with the existing values, past experiences, and needs of potential adopters.

Observability?

• The degree to which the results of an innovation are visible to others.

Trialability?

• The degree to which an innovation may be experimented with on a limited basis.

In general, new product development process looks like?

• Idea generation 

• Concept testing

• Product development

• Market testing

• Product launch

• Evaluation of results 

Idea generation?

• R&D

• Brainstorming

• Customer input

• Competitors’ product

Idea generation - Discussion 1?

• Technology driven idea generation

• Market driven idea generation 

Idea generation - Discussion 2?

• Innovative idea generation

• Imitative idea generation 

Concept testing?

• You should refine the new product idea and develop a concept statement of the new product.

Concept statement should include verbal or visual presentation of?

• Product features and benefits

• Price

• Where to purchase 

• Brand name and logo 

You need ask potential customers to rate their?

• Purchase intent

Product development?

• Product development costs money, time and effort 

• Concept tests before commitment

• Consider getting feedback

Alpha testing?

• The firm attempts to determine whether the product will perform according to its design and as it intended.

Beta testing?

• Uses potential consumers who examine the product prototype in a real-use setting to determine its functionality, performance, potential problems, and other issues specific to its use.

Market testing?

• After completed the new product development, do market testing with the completed product if needed.

In general, market testing is trial sales attempt with different marketing mix variables?

• Different pricing

• Different advertising and promotion

• Different distribution

Product launch?

• This step requires tremendous financial resources and extensive coordination of all aspects of the marketing mix.

• The firm confirms its target market(s) and positioning, and finalizes the remaining marketing mix variables, and determines the marketing budget.

Evaluation of results?

• Try to know its failure as well as success.

• Measure sales performance & profit impact.

• Measure brand awareness and purchase intent.

• Measure customer acquisition & customer retention.

• Monitor customer satisfaction.

Product life cycle curve?

• Development

• Introduction

• Growth

• Maturity

• Decline

The life cycle curve suggests that there are certain what in the life stages of products at which sales accelerate, flatten, or decline?

• Points of infliction

The product life cycle graph?

• Helps understanding the traditional evolution of products, particularly technology products or others subject to fads in consumer preferences.

Whenever Melanie considers upgrading her computer gaming system, she consults with Paula , a knowledgeable friend who always has the newest technology. For Melanie, Paula is a(n)________ in the diffusion of innovation curve?

• Innovator

As soon as she saw one, Candice wanted a curved-screen television, but she was worried about making the wrong choice. She waited until a visible early adoption (about 16%) of the new product. Candice is part of the________ diffusion of innovation group?

• Early majority

At which stage of the product life cycle will you find a growing number of product adopters, rapid growth in industry sales, and increases in the number of competitors and the number of available product versions?

• Growth 

During the________ stage of the product life cycle, sales peak and profits begin to decline as competition becomes intense?

• Maturity

Which of the following are reasons why over-relying on product-life-cycle can lead to problems?

• Although we might observe that prior sales have followed the life cycle pattern to some extent, it is impossible to know how far along in the life cycle our product is, how long the plateau will last, and whether a recent sales decline is a short-term blip or the beginning of long-term sales erosion.

• The central weakness of the traditional product life cycle approach is that it relies on products and features to drive decisions instead of consumers and benefits.

• A specific version of a product may mature and decline; however, the product, and more importantly, the brand, may live forever.