MKTG Chapter 11

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Marketing Chapter 11 Study Guide

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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
the process of getting a group to think of unlimited ways to vary a product or solve a problem
stimulate insightful comments through group interaction
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
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
The final stage in the new-product development process
the decision to market a product
a consumer who was happy enough with his or her trial experience with a product to use it again
a product perceived as new by a potential adopter
the process by which the adoption of an innovation spreads
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
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
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