Mrkting Ch. 9 – Flashcards
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New Product Development
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The development of original products, product improvements, product modifications, and new brands through the firm's own product development efforts
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Idea Generation
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The systematic search for new product ideas
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Crowdsourcing
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Inviting broad communities of people - customers, employees, independent scientists and researchers, and even the public at large - into the new product innovation process
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Idea Screening
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Screening new product ideas to spot good ones and drop poor ones as soon as possible
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Product Concept
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A detailed version of the new product idea stated in meaningful customer terms
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Concept Testing
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Testing new product concepts with a group of *target consumers* to find out if the concepts have strong customer appeal
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Marketing Strategy Development
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Designing an initial marketing strategy for a new product based on product concept
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Business Analysis
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A review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company's objectives
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Product Development
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Developing the product concept into a physical product to ensure that the product idea can be turned into a workable market offering
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Test Marketing
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The stage of new product development in which the product and its proposed marketing program are tested in realistic market settings
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Commercialization
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Introducing a new product into the market
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Customer-centered New Product Development
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New product development that focuses on finding new ways to solve customer problems and create more customer-satisfying experiences
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Team-based New Product Development
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New product development in which various company departments work closely together, overlapping the steps in the product development process to save time and increase effectiveness
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Product Life Cycle (PLC)
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The course of a product's sales and profits over time
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Style
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A basic and distinctive mode of expression
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Fashion
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A currently accepted or popular style in a given field
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Fad
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A temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity
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Introduction Stage
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- The PLC stage in which a new product is first distributed and made available for purchase - *Customers: Innovators* - *Sales Promotion: Use heavy sales promotion to entice trial* - This stage normally lasts the *longest*and poses strong challenges to marketing managers - Nonexistent profits
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Growth Stage
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- The PLC stage in which a product's sales start climbing quickly - *Customers: Early adopters* - *Sales promotion: Reduce to take advantage of heavy consumer demand* - Same level or slightly higher level of promotional expenditures in an attempt to respond to *increasing competition* - Rapid market acceptance - Sales increase - Profits increase - Economies of scale - Consumer education - Lowering prices to attract more buyers
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Maturity Stage
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- The PLC stage in which a product's sales growth slows or levels off - *Customers: Mainstream adopters* - *Sales promotion: Increase to encourage brand switching* - Consider *modifying the market, modifying the product, modifying the market mix*
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Decline Stage
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- The PLC stage in which a product's sales fade away - *Customers: Lagging adopters* - *Sales promotion: Reduce to minimal level* - Some products that have entered the decline stage have been cycled back to the growth stage through *repositioning*
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Which of the following is a product strategy in the maturity stage of the PLC?
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Diversifying the brand and models
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Offering a basic product is a product strategy in the __________ of the PLC.
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Introduction stage
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RWW
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- Is it *real*? - Can we *win*? - Is it *worth* doing?
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Harvesting
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In the decline stage of the PLC, sell the product off to someone else
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Phase-Out
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- Slowly phase product out over time - Very efficient - Done typically with manufacturing
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Run-Out
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- Switching/changing models - Done in manufacturing and retail - Product still in the system, but selling at a discount - Good for seasonal stuff
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Immediate Drop
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- The worst thing you could do - Stop producing immediately - Nothing good comes out of it - Ex: Recalls, cabbage patch doll with mechanical mouth
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Profits peak in _______. Sales peak in ______ because _______ ________.
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Growth; maturity; margins contract
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Continuous Improvement
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- Pays-off in the long term - Improving over time
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Modification Strategies
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- Modify the market - Modify the product - Modify the marketing mix
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Modifying the market
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- Company tries to increase consumption by finding new users and new market segments for its brands - Ex: Axe usually target male buyers, but are introducing products aimed at women
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Modifying the product
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Changing characteristics such as quality, features, style, packaging, or technology platforms to retain current users or attract new ones
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Modifying the marketing mix
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Improving sales by changing one or more marketing mix elements
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Successful new product development should be:
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- Customer centered - Team based - Systematic
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Internal Sources of new product ideas
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- Refer to the company's own formal research and development, management and staff, and intrapreneurial programs - Ex: Company execs
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External Sources of new product ideas
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Refer to sources outside the company such as customers, competitors, distributors, suppliers, and outside design firms
