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Product life cycle

The stages a new-product idea goes through from beginning to end.

Market introduction

A stage of the product life cycle when sales are low as a new idea is first introduced to a market.

Market growth

A stage of the product life cycle when industry sales grow fast—but industry profits rise and then start falling.

Market maturity

A stage of the product life cycle when industry sales level off and competition gets tougher.

Sales decline

A stage of the product life cycle when new products replace the old.

Fashion

Currently accepted or popular style.

Fad

An idea that is fashionable only to certain groups who are enthusiastic about it—but these groups are so fickle that a fad is even more short-lived than a regular fashion.

New product

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

Federal Trade Commission (FTC)

Federal government agency that polices antimonopoly laws.

Consumer Product Safety Act

A 1972 law that set up the Consumer Product Safety Commission to encourage more awareness of safety in product design and better quality control.

Product liability

The legal obligation of sellers to pay damages to individuals who are injured by defective or unsafe products.

Concept testing

Getting reactions from customers about how well a new-product idea fits their needs.

Prototype

An early sample or model built to test a concept.

Product managers

Manage specific products, often taking over the jobs formerly handled by an advertising manager.

Brand managers

Manage specific products, often taking over the jobs formerly handled by an advertising manager.

Total quality management (TQM)

The philosophy that everyone in the organization is concerned about quality, throughout all of the firm’s activities, to better serve customer needs.

Continuous improvement

A commitment to constantly make things better one step at a time.

Empowerment

Giving employees the authority to correct a problem without first checking with management.