Term
| Explain the importance of developing new products and describe the six categories of new products. |
|
Definition
New products are important to sustain growth and profits and o replace obsolete items. New products can be classified as:
1. New-to-the-world products (discontinuous innovations)
2. New product lines
3. Additions to existing product lines
4. Improvements or revisions of existing products.
5. Repositioned products
6. Lower priced products
To sustain or increase profits, a firm must innovate. |
|
|
Term
| Explain the steps in the new-product development process. |
|
Definition
1. A firm forms a new-product strategy by outlining the characteristics and roles of future products.
2. New-product ideas are generated by customers, employees, distributors, competitors, vendors, and internal research and development personnel.
3. Once a product idea has survived initial screening by an appointed screening group, it undergoes business analysis to determine its potential profitability.
4. If a product seems viable, it progresses into the development phase, in which the technical and economic feasibility of the manufacturing process is evaluated. The development phase also includes laboratory and use testing of a product for performance and safety.
5. Following initial testing and refinement, most products are introduced in a test market to evaluate consumer response and marketing strategies.
6. Finally, Test market successes are propelled into full commercialization. The commercialization process involves starting up production, building inventories, shipping to distributors, training a sales force, announcing the product to the trade, and advertising to consumers. |
|
|
Term
| Discuss global issues in new product development. |
|
Definition
| A marketer with global vision seeks to develop products that can easily be adapted to suit local needs. The goal is not simply to develop a standard product that can be sold worldwide. Smart global marketers also look for good product ideas worldwide. |
|
|
Term
| Explain the diffusion process through which new products are adopted. |
|
Definition
The diffusion process is the spread of a new product from its producer to ultimate adopters. Adopters in the diffusion process belong to five categories:
1. Innovators
2. Early adopters
3. The early majority
4. The late majority
5. laggards
Product characteristics that affect the rate of adoption include product complexity, compatibility with existing social values, relative advantage over existing substitutes, visibility, and "trial-ability." The diffusion process is facilitated by word-of-mouth communication and communication from marketers to consumers. |
|
|
Term
| Explain the concept of product life cycles. |
|
Definition
All brands and product categories undergo a life cycle with four stages:
1. Introduction
2. Growth
3. Maturity
4. Decline
The rate at which products move through these stages varies dramatically. Marketing managers use the product life cycle concept as an analytical tool to forecast a product's future and devise effective marketing strategies. |
|
|
