Modules 5 & 6: New Product Strategy and Product Management

Comprehensive vocabulary flashcards reviewing product levels, innovation classifications, service characteristics, branding strategies, and product mix concepts from Modules 5 and 6.

Product (Satisfactions Definition)

The sum of physiological, sociological, and psychological satisfactions that a buyer derives from purchase, ownership, and consumption.

Discontinuous Innovation

A fairly revolutionary, breakthrough innovation with no previous product available that necessitates a change in consumer behavior (e.g., fax machines, 3D printers).

Dynamically Continuous Innovation

An innovation that brings a major change or performance improvement while maintaining a similar consumption pattern (e.g., electronic typewriters, cell phones).

Continuous Innovation

The most common type of innovation, consisting of minor improvements and variations of existing products (e.g., razors).

Imitation

A new product strategy based on replication where a company simply copies a competitor's existing product (e.g., sticky notes).

Screening

The stage in the new product development process used to eliminate ideas that are inconsistent with organizational objectives or otherwise inappropriate.

Concept Testing

The stage where a new product idea is evaluated before any prototype has been developed, often utilizing focus group research with target market members.

Business Analysis

The stage in new product development where preliminary figures for demand, cost, and profitability are projected without including marketing strategy.

Simulated Test Markets

An experimental research method using a physical or digital 3D high-resolution virtual store with eye-tracking or virtual click data to evaluate a new product.

Commercialization

The most costly stage of new product development, involving starting full-scale production, building inventories, shipping the product, training sales personnel, and announcing the product.

Diffusion of Innovation

The process by which an innovation spreads from its source of invention or creation to its ultimate users or adopters over time.

Five Product Characteristics Influencing Diffusion

The key attributes affecting adoption rate: complexity (slows diffusion), compatibility, relative advantage, observability, and trialability (which facilitate diffusion).

Cognitive Dissonance

The mental discomfort or anxiety a consumer experiences when experiencing doubts or conflicting feelings after making a purchase decision.

Early Adopters

Respected opinion leaders who adopt an innovation shortly after innovators and serve as key targets for new product marketers.

Incremental Innovation

Entering new markets by tweaking products for new customers, using variations on a core product, and creating interim solutions for industry-wide problems.

Disruptive Technologies

Cheaper innovations created by new companies that are more likely to alter the competitive space.

Customer Value Hierarchy

The five progressive product levels that add value: core benefit, basic product, expected product, augmented product, and potential product.

Augmented Product

The product level encompassing all added attributes and benefits that exceed customer expectations, where brand positioning and competition occur.

Potential Product

The product level that includes all possible future augmentations and transformations a company explores to satisfy customers and differentiate its offering.

Staple Items

Essential convenience goods purchased frequently, regularly, and with minimal effort due to consistent high demand (e.g., milk, bread, toilet paper).

Impulse Items

Typically inexpensive convenience products bought without planning, driven by sudden urges or high-visibility checkout placement (e.g., candy, magazines).

Heterogeneous Shopping Goods

Shopping goods where brands are perceived by consumers as fundamentally different, leading buyers to compare and seek out the best bundle of attributes.

Homogeneous Shopping Goods

Shopping goods where major brands appear substantially similar, leading consumers to compare products primarily on price.

Specialty Goods

Products for which consumers know the specific brand they want before leaving home and are willing to exert considerable effort to acquire it.

Search Qualities

Characteristics of a product that a buyer can examine and evaluate prior to purchasing (e.g., pure goods like jewelry).

Credence Qualities

Characteristics that the consumer finds difficult or impossible to evaluate even after consumption has taken place (e.g., legal or medical services).

Experience Qualities

Characteristics of an offering that the customer can evaluate only after consumption or use (e.g., haircuts or repair services).

Service Intangibility

A unique service characteristic meaning the offering cannot be seen, felt, tasted, or smelled, requiring firms to link the service to tangible symbols like logos.

Service Heterogeneity

The variability in service performance across different employees, managed by standardizing employee training or automating the service with technology.

Service Perishability

The service characteristic meaning services cannot be stored for later sale or use, creating challenges during fluctuating demand.

Service Inseparability

The simultaneous production and consumption of a service, requiring the provider to supply physical, social, or advertising cues to signal quality.

Interactive Marketing

Marketing that describes the employee's skill in serving the client, evaluating both technical quality and functional quality.

Zone of Tolerance

The range of acceptable service performance bounded by the minimum level consumers accept and the level they believe should be delivered.

Life-Cycle Cost

The total cost of a product calculated as: $\text{purchase cost} + \text{discounted cost of maintenance/repair} - \text{discounted salvage value}$.

Gap #1 (Service Gap Analysis)

The service quality gap representing the difference between what customers expect and what management thinks they expect.

Spokescharacter

A real or fictional animated being, or unknown hired actor (e.g., Flo), brought to life to symbolize brand character and provide emotional appeal.

Family (Umbrella) Branding

A strategy using one brand name across a wide range of products, providing lower marketing costs and instant recognition at the risk of widespread reputational damage if one item fails.

Flankers

Brands positioned strategically with respect to competitors' offerings so that more important and profitable flagship brands can maintain their desired position.

Ingredient Branding

A form of co-branding that creates brand equity for materials, components, or parts contained within other branded products (e.g., Intel inside HP).

Situations Where Guarantees Are Most Effective

Guarantees are most effective in two specific situations: when the company or products are not well known, and when the product's quality is superior to competition.