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New Product Develop
ch. 12 marketing exam #2
| Term | Definition |
|---|---|
| Diffusion of Innovation | process by which the use of an innovation, g/s, spreads throughout a market over time and across various categories of adopters - innovators, early adopters, early majority, late majority, laggards |
| Early Adopters / Innovators | one of the first buyers because they want to have the new g/s - early adopters wait until a couple reviews come out then they buy it; VERY IMPORTANT as they share their opinions about it |
| Early Majority | do not like risk and wait until a lot of reviews have been made or all the bugs have been worked out * a necessary group since few g/s can be profitable until this group buys it |
| Late Majority | product has achieved full market potential and sales may be in decline by this point |
| Laggards | people who avoid change and like to rely on traditional products |
| Factors Helping Diffusion | Trialability, Compatibility, Differential Advantage, Complexity, Observability |
| Compatibility | how compatible the g/s is w/ consumer features; is it compatible w/ previous products? |
| Complexity | less complex means its easy to try which leads to quicker diffusion |
| Observability | easily observed means it is easily communicated to consumers which means quicker diffusion |
| D / R Advantage | is the good / service is perceived to be better then customers will be more likely to buy |
| Stages of Product Life Cycle | Introduction, Growth, Maturity, Decline, |
| Introduction Stage | stage when innovators start buying the product - initial losses due to high start up costs and low sale revenues as product begins to take off |
| Growth Stage | stage where the product gains acceptance, sales increase, and competitors emerge - market becomes more segmented and consumer preferences more varied |
| Maturity Stage | stage where sales reach their peak; firms try to rejuvenate sales by adding new features / repositioning - intense competition - increase in marketing costs - combat market saturation by entry into new markets / segments or product development |
| Decline Stage | stage where sales decline and eventually exit the market - can position themselves for a niche segment OR w/ special need fulfillment |
| Product Development Stages | Idea Generation, Concept Testing, Product Development, Market Testing, Product Launch, Evaluation of Results |
| Idea Generation | development of new product ideas through... - internal research + development - r and d external groups - licensing - brainstorming -outsourcing |
| Concept Testing | process where a concept statement is presented to potential buyers/consumers think about... - purchase intentions, what needs it satisfies, ask about quantity, frequency of purchase, and price |
| Product Development | process of developing a good/service form + features - different prototypes are tested through alpha testing + beta testing --> iterative processes |
| Market Testing | either pre-market OR test market pre-market - to determine usage before test marketing - determining success potential of anew product + introduces offering to a limited geo area prior to national launch |
| Product Launch | only launch when market testing results in positive outcome! otherwise hard to recover from involves... - confirming target market + positioning - timing of launch |
| Evaluation of Results | determine if launch was a success or failure; decide if additional resources or changes to marketing mix are needed measuring success - satisfaction of technical requirements? - customer acceptance - satisfaction of firm's financial requirements? |
| Controlled Test Market | online or limited retailer outlet test, small production runs, less expense and risk experiment |
| Simulated Test Market | experiment in which a sample of consumers has an opportunity to select products and provide feedback in a mock environment |
| Standard Test Market | offering a new product through normal distribution channels w/ introductory marketing in a limited area |
Created by:
Zetiris
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