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Product Management
Final Exam
| Term | Definition |
|---|---|
| Product Life Cycle (4 stages) | Introduction, growth, maturity, decline |
| BCG Matrix | STAR (High growth, high share), CASH COW (Low growth, high share), QUESTION MARK (High growth, low share), DOG (Low growth, low share) |
| Ansoff Matrix | Market Penetration (existing product, existing market), Market Development (new market, existing product), Product Development (new product, existing market), Diversification (new product, new market) |
| Incremental Innovation | -Improvements in a firms EXISTING product offerings -Enhances a firm's competitive position -Guard erosion of a firm's competitive position -Deter entry by new competitors -Looking to stay relevant |
| Incremental Innovation | -Improvements in a firms EXISTING product offerings -Enhances a firm's competitive position -Guard erosion of a firm's competitive position -Deter entry by new competitors -Looking to stay relevant |
| Radical Innovation | Innovations that are new to the market, firm, industry, which incorporate a substantially different and new technology -High on newness of technology -Broadening of the customer base for a product from niche to a mass market |
| Radical Innovation | -Major changes in how a product is produced, promoted, distributed, priced -Long-term and disrupts existing markets |
| Radical Innovation | -Major changes in how a product is produced, promoted, distributed, priced -Long-term and disrupts existing markets |
| Example of Radical Innovation | (Smartphone, Internet) |
| Example of Incremental Innovation | New flavor soda (Coke Zero) |
| Innovation | The development and successful implementation of a novel idea into a new product, process or practice, or significant improvement of an existing product, process, or practice that creates value for stakeholders --> Idea, Outcome, Value |
| Cannibalization | When a new product eats into sales of your own existing product |
| Willingness to Cannibalize | The extent to which a firm is prepared to reduce the actual or potential value of its investments. A attitudinal trait of the decision makers of the firm and resides in the culture, shared beliefs of the firm |
| Cannibalization link to Radical Innovation | -High willingness to cannibalize --> More radical innovation -Willingness to cannibalize positively influences radical innovations |
| Factors that affect a firm's willingness to cannibalize | Future-Market Focus and Internal Markets |
| Radical Innovations | More evident in the long-run and has a larger positive effect on firm performance b/c its harder for competitors to imitate |
| Open Innovation | A paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to the market, as firms look to advance their technology |
| Advantages of Open Innovation | Synergistic effect between internal capability and external sources, less boundary in idea generation, less constraint from existing operations |
| Disadvantages of Open Innovation (tension) | IP conflicts, opportunity costs, potentially limiting business potential of smaller entity |
| Open Innovation | You use BOTH internal and external inflows and internal and external outflows of knowledge |
| Inflow (external --> internal) | Bring outside knowledge in to improve internal innovation |
| Outflow (internal --> external) | Let other firms commercialize your unused ideas) |
| Internal Ideas | Ideas created inside the firm -Generated by: Employees, R&D departments, Company labs |
| External Ideas | Ideas coming from outside of the company (customer cocreation, suppliers, startups, competitors, universities) |
| Firm A’s strategy: Increase social media advertising efforts on our existing products to better appeal to its younger customers. | Market Penetration |
| If a firm’s focus is more on its long-term (vs. short-term) performance goal. A firm should emphasize incremental innovations more than radical innovations. | False |
| Innovation can be only done by for-profit organizations as they are only organizations that creates economic value | False |
| To achieve growth, a firm’s strategic focus has been on developing and introducing new products to better serve its existing mid-age group customers. In terms of Ansoff’s product/market framework, what is a firm’s strategy type? | Product development |
| Product “A,” launched two years ago, exhibited an increase in sales over the last 16 months. This quarter, while its sales reached a record high, it did not show growth for the last few weeks. What is the PLC stage that the product “A” is likely in? | Maturity |
| Choose the strategic category that is not a part of the Ansoff matrix | Vertical integration |
| Choose the false statement related to Innovation | A firm can engage in premium pricing for an extended period with incremental product innovation, as it is harder to imitate such innovations. |
| Product Ideation | The very first step for a new product development/launch process -Activities could include idea sourcing (ex: open innovation), idea searching (marketing research), and market analysis |
| VOC (Voice of customer) approach | Voice of Customer that generates the idea |
| Use Value | Overall satisfaction that a customer receives from using a product or service |
| Economic Value to the Customer | -Value at the heart of pricing strategy is not "use value", but... |
| EVS and Utility | Utility = Use Value - Price |
| EVC | Based on the insight that a customer will choose a product only if the utility of consuming product outweighs the value of the closest alternative: Utility a > = Utility b |
| EVC | Differentiation value + Price of the reference product --> Price should be equal or lower than EVC for consumer choice |
| Differentiation | The value of the customer (COULD BE POSITIVE OR NEGATIVE) of any differences between your product and the reference product |
| Values Communications | Involves helping customers to recognize the link between a product's point of differentiation and the salient value drivers |
| Commercialization Stage | Multinational corporations often launch multiple products annually in different reginal marketplaces. Given the resource constraints, substantive decisions are made during the launch stage. Resource constrains lead to a consideration of trade-offs |
| Product Pitch | Presentation that communicates the value of the product to persuade -Potential customers (B2B, B2C-Consumer) -Internal decisions makers (Product Support) -Investors(Funding Opportunity) |
| Primary data (data collection approach) | Information that is developed or gathered by the researcher specifically for the research project at hand |
| Secondary data (data collection approach) | Information that has previously been gathered by someone other than the researcher and/or for some other purpose than the research project at hand |
| Big data | Large amounts of data from multiple sources. Numerous types and huge amounts of data to which companies now have access in real time |
| Survey: Don'ts | Lead, load, double-barrel, overstate |
| Data imputation | Replacing missing value with other values to preserve data -Last option you will use and usually vulnerable strategy |
| New Product Portfolio | Portfolio of new product |
| New Product Portfolio Management | Occurs during both the development and commercialization stage, where the resource allocation is an important decision-making problem |
| Data Cleaning | The process of fixing or removing incorrect, corrupted, incorrectly formatted, duplicate, or incomplete data within a dataset (This process is necessary for both primary and secondary data) |
| Three Measures of Variability | Frequency Distribution, Range, Standard Deviation |
| More Standard Deviation | More data spread from the mean |
| Associative analyses | Determines where stable relationships exist between two variables |
| Covariation | The amount of change in one variable systematically associated with change in another variable |
| Correlation | Corrects for the variation difference. It does not suffer from unit difference |
| CAVEAT | CORRELATION DOES NOT IMPLY CASUALITY |
| Value | A correlation coefficient's size indicates the strength of linear association between two variables |
| Correlation Coefficient | An index number, constrained to fall between the range of -1 and +1 |
| Sign/Direction | The sign (+ or --) indicates the direction of the association |
| Multiple Regression | Uses the same concepts as Simple/bivariate regression analysis, but uses more than one independent variable |
| Bivariate analysis | One variable is used to predict another variable |
| Regression is directly related to? | Correlation |
| Independent variable | Also called: Predictor variable, Explanatory variable, Regressor |
| Dependent variable | Which is predicted -- Also called: Response variable |
| Bivariate regression/Simple Regression | Regression model with only one independent variable. i.e., it means only two variables are being analyzed |
| Simple/Bivariate Regression -- "a" equals?? | The intercept, or point where the line cuts the y axis when = 0 |
| Simple/Bivariate Regression -- "b" equals?? | The slope or the change in y for any 1-unit change in x |
| T-test | Compares the average purchase intention between options A and B |
| Chi-square Test (Treatment and Response) | Compares the proportion of participants between options A and B |
| Three components of Market Orientation | Customer orientation, competitor orientation, interfunctional coordination |
Created by:
Bradyc852
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