MKTG Chapter 11

Advantages of Being First on the Market Increased sales through longer sales lifeIncreased marginsIncreased product loyaltyGreater market responsivenessA sustained leadership position New Product a product new to the world, the market, the producer, the seller, or some combination of these New-to-the-world Product Create an entirely new market New Product Lines these products, which the firm has not previously offered, allow it to enter new or establish markets Additions to Existing Product Lines includes new products that supplement a firm's established line Improvements or Revisions of Existing Products The "new and improved" product may be significantly or slightly changed Repositioned Products existing products targeted at new markets or market segments, or repositioned to change the current market's perception of the product Lower-priced Products products that provide performance similar to competing brands at a lower price New-Product Strategy a plan that links the new-product development process with the objectives of the marketing department, the business unit, and the corporation Idea Generation CustomersEmployeesDistributorsCompetitorsVendorsResearch and DevelopmentConsultants Applied Research takes these new technologies and tried to find useful applications for them Basic Research scientific research aimed at discovering new technologies Product Development a marketing strategy that entails the creation of marketable new products; the process of converting applications for new technologies into marketable products The two considered most useful for generating new-prodcut ideas are... BrainstormingFocus Groups Brainstorming the process of getting a group to think of unlimited ways to vary a product or solve a problem Focus-Group stimulate insightful comments through group interaction Screening the first filter in the product development process, which eliminates ideas that are inconsistent with the organization's new-product strategy or are obviously inappropriate for some other reason Concept Test evaluates a new-product idea, usually before any prototype has been created Business Analysis preliminary figures for demand, cost sales, and profitability are calculated Development the stage in the product development process in which a prototype is developed and a marketing strategy is outlined Simultaneous Product Development a team-oriented approach to new-product development The Consumer PRoduct Safety Act of 1972 requires manufacturers to conduct a "reasonable testing program" to ensure that their products conform to established safety standards Test Marketing limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation Simulated (laboratory) Market Testing the presentation of advertising and other promotion materials for several products, including a test product, to members of the product's target market Commercialization The final stage in the new-product development process the decision to market a product Adopter a consumer who was happy enough with his or her trial experience with a product to use it again Innovation a product perceived as new by a potential adopter Diffusion the process by which the adoption of an innovation spreads Innovators almost obsessed with trying new ideas and products Early Adopters they rely much more on group norms and values Early Majority weighs the pros and cons before adopting a new product Late Majority adopts a new product because most of their friends have already adopted it Laggards do not rely on group norms, but their independence is rooted in their ties to tradition Complexity (Product Characteristic) the degree of difficulty involved in understanding and using a new product Compatibility (Product Characteristic) the degree to which the new product is consistent with existing values and product knowledge, past experiences, and current needs Relative Advantage (Product Characteristic) the degree to which a product is perceived as superior to existing substitutes Observability (Product Characteristic) the degree to which the benefits or other results of using the product can be observed by others and communicated to target customers Trialability the degree to which a product can be tried on a limited basis Product Life Cycle a biological metaphor that traces the stages of a products' acceptance, from its introduction (birth) to its decline (death) Product Category all brands that satisfy a particular type of need Introductory Stage the first stage of the product life cycle in which the full-scale launch of a new product into the marketplace occurs Growth Stage the second stage of the product life cycle when sales typically grow at an increasing rate, many competitors enter the market, large companies may start acquiring small pioneering firms, an profits are healthy Maturity Stage the third stage of the product life cycle during which sales increase at a decreasing rate Decline Stage the fourth stage of the product life cycle, characterized by a long-run drop in sales