New Product Decisions Flashcards

1
Q

Types of new products

A
  • new-to-the-world/innovations (e.g. medical breakthroughs)
  • replacements (e.g. MP3 players instead of stereos)
  • variants (e.g. kit kat chunky)
  • me-too (e.g. Fritz-Kola)
  • Re-launched (same product with revamped marketing strategy)
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2
Q

New Product Options: Options on organizational level

A
  • buy other companies
  • buy patents from other companies
  • buy a license or franchise from another company
  • innovations
  • improve existing products
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3
Q

Challenges in New Product Development

A
  • innovative imperative (continuous innovation is necessary)
  • new-product success (incremental innovation vs. disruptive success)
  • shifting paradigms in product innovations
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4
Q

New Product Failure

A
  • fragmented markets
  • social, economic, governmental barriers
  • development costs
  • capital shortages
  • shorter development time
  • poor launch timing
  • shorter PLCs
  • lack of organizational support
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5
Q

Organizational Arrangements for New Products (Budgeting)

A
  • budgeting for new product development (cost to find one successfull new product)
  • stages: Idea screening, concept testing, product development, test marketing, national launch
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6
Q

Organizing New Product Development: New Product Development Concepts

A
  • new product department
  • venture teams
  • stage-gate systems
  • skunkworks
  • crowdsourcing
  • communities of practice
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7
Q

Stages in new product development process

A

1) Idea Generation
2) Idea Screening
3) Business Analysis
4) Market Testing
5) Commercialization

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8
Q

Generating Ideas: How To

A
  • interacting with employees
  • interacting with outsiders
  • studying competitors
  • adopting creativity techniques
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9
Q

Ways to find new product ideas

A
  • trade shows
  • employees visiting supplier labs
  • idea vaults
  • customer brainstorming or surveys
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10
Q

Ways to draw new ideas from customers

A
  • observe how customers use the product
  • ask customers about product problems
  • use customer advisory board
  • challenge customers to improve products
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11
Q

Idea Screening

A
  • company can monitor and revise its estimate of the product’s overall probability of success

overall probability of success = p (technical completion) * p (commercialization given technical completion) * p (economic success given commercialization)

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12
Q

Concept Testing Responses

A
  • communicability and believability
  • perceived value
  • need level
  • purchase intention
  • user targets, purchase occasions and frequency
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13
Q

Marketing strategy development following a successful concept test

A

1) targets market’s size, structure, behavior; planned brand positioning, sales, market share and profit goals in the first few years
2) planned price, distribution strategy and marketing budget for the first year
3) long-run sales and profit goals and marketing-mix strategy over time

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14
Q

Concept to Strategy: Business Analysis & Projected Cash Flow Statements

A
  • estimating total sales
  • graphs: product lifecycle sales for one-time purchased products, infrequently purchased products (replacement sales), frequently purchased products (repeat purchase sales)
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15
Q

Development to Commercialization

A

1) Product Development (physical prototypes, alpha- & beta-testing)
2) Market testing (consumer goods or business goods market testing)
3) Commercialization: Timing (first entry bevor competitor, parallel entry or late entry)
4) Commercialization: Where? (Geographic strategy), to whom? (target-market prospects), how? (introduction market strategy)

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16
Q

Methods of Consumer-Goods market testing

A
  • simulated test marketing
  • controlled test marketing
  • test markets
17
Q

Consumer Adoption Process

A

Adoption = individual’s decision to become a regular user of a product

1) Awareness
2) Interest
3) Evaluation
4) Trial
5) Adoption

18
Q

Factors influencing the adoption process

A
  • readiness to try new products and personal influence (innovators, early adopters, early & late majority, laggards)
  • characteristics of innovation (relative advantage, compatability, complexity, divisibility, communicability)
19
Q

Product Life Cycle Concept

A
  • plots the sales curve of a product over a period of time

- introduction, growth, maturity-saturation, decline, deletion

20
Q

Sales Curve

A
  • result of product trial and repeat purchasing behavior

sales volume = (number of triers * avg. purchase amount * price) + (number of repeaters * avg. purchase amount * price)