Chapter 10: Developing New Products and Services

Vocabulary flashcards covering key definitions, innovation levels, failure factors, and the seven stages of the new-product development process from Chapter 10.

Consumer Products

Products purchased by the ultimate consumer, which include convenience products, shopping products, specialty products, and unsought products.

Business Products

Products organizations buy that assist in providing other products for resale.

Continuous Innovation

An innovation where degree of newness requires no new learning by consumers, such as new improved shavers, detergents, or toothpaste.

Dynamically Continuous Innovation

An innovation that disrupts a consumer's normal routine but does not require totally new learning, such as an electric toothbrush, LED HDTV, or smartphone.

Discontinuous Innovation

An innovation requiring entirely new learning and consumption patterns by consumers, such as a wireless router, digital video recorder, or electric car.

Feature Bloat to Fatigue Trajectory

A model showing consumer satisfaction rising as features are added up to a tipping point, after which additional features lead to overload and declining satisfaction.

Open Innovation

Organizational practices that encourage the use of external as well as internal ideas when developing new products and services.

New Product Vitality Index

A performance tracking tool used by 62 percent of large companies to monitor new-product success and growth.

Seven Stages in New-Product Development

The sequential steps leading to product success: New-product strategy development, Idea generation, Screening and evaluation, Business analysis, Development, Market testing, and Commercialization.

Stage 1: New-Product Strategy Development

The stage of the new-product development process that defines the role for a new product in terms of overall objectives using SWOT analysis and environmental scanning.

Stage 2: Idea Generation

The stage of the new-product development process that involves developing a pool of concepts to serve as candidates for new products from internal and external sources.

Crowdsourcing

Generating new product ideas by soliciting suggestions and contributions from a large group of people, especially online communities.

Crowdfunding

A method used to gather financial contributions and supporters online for new product projects.

Stage 3: Screening and Evaluation

The stage of the new-product development process that internally and externally evaluates new-product ideas to eliminate those that warrant no further effort.

Customer Experience Management (CEM)

An internal approach in screening and evaluation used to manage the entire customer experience process with a service offering.

Concept Tests

External evaluations with consumers that consist of preliminary testing of a new-product idea rather than an actual finished product.

Stage 4: Business Analysis

The stage of the new-product development process that specifies the features of the product, marketing strategy, and financial projections needed to assess business fit.

Prototype

A full-scale operating model of a product or service tested during the development phase.

Stage 5: Development

The stage of the new-product development process that turns paper ideas into demonstrable physical prototypes subjected to lab and consumer tests.

Stage 6: Market Testing

The stage of the new-product development process that involves exposing actual products to prospective consumers under realistic purchase conditions.

Standard Test Markets

A test market approach where a company attempts to sell a product through normal distribution channels in select cities.

Controlled Test Markets

A test market approach where a company contracts the test program to an outside service that guarantees shelf placement in specified retail stores.

Simulated Test Markets

A technique that replicates a full-scale test market in a laboratory or simulated shopping environment to observe consumer behavior.

Stage 7: Commercialization

The stage of the new-product development process that positions and launches a new product in full-scale production and sales.