Chapter 9

What are the four stages of the product life cycle?

Introduction, Growth, Maturity, Decline

What is defined as a 'new product'?

A product that is new in any way for the company concerned.

Which stage of the product life cycle involves low sales as the product is first introduced?

Market Introduction

What type of innovation requires significant changes in customer behavior?

Discontinuous innovation

What is the primary purpose of concept testing?

To gather reactions from customers about a new-product idea.

What does the Federal Trade Commission (FTC) regulate regarding new products?

Definitions of what constitutes a 'new' product. The FTC says a product is new for only six
months.
• In the FTC’s view, a new product must be either
entirely new or changed in a functionally significant
or substantial respect.

Which law encourages awareness of safety in product design?

Consumer Product Safety Act

What is total quality management (TQM)?

A philosophy that emphasizes quality in all activities of the organization.

What is the role of product managers?

To manage specific products and their market performance.

What is empowerment in the context of quality management?

Allowing employees to make decisions without managerial approval.

Product Life Cycle

The stages a new-product idea goes through from introduction to decline.

Market Introduction

The stage when a new product is first introduced to the market.

Market Growth

The stage characterized by fast industry sales growth.

Market Maturity

A stage where sales level off and competition intensifies.

Sales Decline

The stage when new products replace older ones.

Continuous Innovation

New products that do not require customers to change their behavior.

Dynamically Continuous Innovation

New products that require minor changes in customer behavior.

Discontinuous Innovations

Innovations that require significant behavioral changes from customers.

Patent

A legal right granted to an inventor to exclude others from using their invention.

Concept Testing

Gathering customer feedback on a new product idea.

Prototype

An early model used to test a product concept.

Total Quality Management (TQM)

A management approach focused on continuous improvement in quality across all areas of the organization.

Empowerment

Giving employees the authority to make decisions and solve problems independently.

What is the main goal of the product life cycle?

To track the performance of a product over its lifespan.

What happens during the market growth stage of a product life cycle?

Sales increase rapidly and market share may grow.

What leads to market maturity in the product life cycle?

Increased competition and market saturation.

What characterizes the sales decline stage?

Falling sales as newer products take the market share.

What are examples of continuous innovation?

Improved versions of existing products that require no significant change from consumers.

What does it mean for an innovation to be dynamically continuous?

Requires some changes in customer purchase behavior but not radical changes.

How does the patent system incentivize innovation?

By granting inventors a period of exclusivity in the market.

What is the key focus during concept testing?

Understanding consumer attitudes towards a product idea.

Why is prototyping crucial in new product development?

It allows the testing of concepts before full-scale production.

What role does TQM play in product management?

It enhances product quality through a focus on continuous improvement.

What significance does empowerment have in a team environment?

It increases employee engagement and decision-making efficiency.

How does the FTC impact product management?

It helps ensure the truthfulness of marketing claims about new products.

What is the relationship between product life cycle stages and marketing strategies?

Different stages require tailored marketing strategies to address market dynamics.

What is the primary responsibility of a product manager throughout the product lifecycle?

To oversee and strategize for the product's market positioning and performance.

In what way does consumer feedback affect product development?

It informs adjustments and improvements for better market fit.

What legislative act is focused specifically on consumer product safety?

Consumer Product Safety Act.

How does market introduction stage influence future marketing efforts?

Initial reception can guide adjustments in marketing focus for growth stages.

What strategies can be employed during market maturity to stay competitive?

Enhancing differentiation and improving customer retention efforts.

What change in behavior might discontinuous innovations necessitate from consumers?

Significant shifts in existing consumption habits or practices.