Chapter 12 - Developing New Products

These flashcards cover key concepts and definitions from Chapter 12 on developing new products, including innovation, product failures, the product development process, and the product life cycle.

What is the Diffusion of Innovation?

The process by which the use of an innovation spreads throughout a market group over time and across categories of adopters.

What are pioneers in the context of product innovation?

Pioneers are breakthroughs that establish completely new markets or radically change competition and consumer preferences, often enjoying first mover advantages.

What were some reasons for the failure of Google Glass?

Privacy concerns, system bugs, and being banned from public spaces led to the failure of Google Glass.

Why did New Coke fail?

Coca-Cola underestimated consumers’ affinity to the original formulation and their unwillingness to change.

What was a significant factor in the failure of Harley-Davidson perfumes?

Consumers were not attracted to the idea of smelling like a motorcycle.

What is the Product Development Process?

A series of steps including idea generation, concept testing, product development, market testing, product launch, and evaluation of results.

What are the key factors affecting product diffusion?

Relative advantage, compatibility, observability, complexity, and trialability.

What role does customer input play in new product development?

Listening to the customer can lead to successful idea generation in both B2B and B2C markets.

What is concept testing in product development?

The process where a concept, which is a brief description of the product, is presented to potential buyers to obtain their reactions.

What are the four stages of the Product Life Cycle?

Introduction, growth, maturity, and decline.

What characterizes the introduction stage of the Product Life Cycle?

Sales are low, competitors are few, and profits are negative or low.

What are the limitations of the Product Life Cycle model?

Each product or service has its unique shape, making it challenging to precisely identify the stage of the PLC.