Chapter 10 Flashcards
(42 cards)
o A concept that provides a way to trace the stages of a product’s acceptance, from its introduction (birth) to its decline (death).
• Product Life Cycle (PLC)
• Product Life Cycle (4 stages)
o Market introduction
o Market growth
o Market maturity
o Sales decline
• Introductory Stage
- o High ___ rates
- o ___ competition
- o ___ product modification
- o ___ distribution
- o High marketing and production costs
- o ___ profits with slow sales increases
- o Promotion focuses on ___ and information
- o Communication challenge is to stimulate primary demand
- failure
- Little
- Frequent
- Limited
- Negative
- awareness
• Growth Stage
o ____ rate of sales
o Entrance of ___
o Market consolidation
o Initial healthy profits
o ___ advertising of the differences between brands
o Wider ___
Increasing
competitors
Aggressive
Distribution
• Maturity Stage
o Sales increase at a ___ rate
o Saturated markets
o Annual models appear
o ___ product lines
o ___ and repair assume important roles
o ____ promotions to consumers and dealers
o ___ competitors drop out
o Niche marketers emerge
Decreasing
Lengthened
Service
Heavy
Marginal
• Decline Stage
o Long-run ___ in sales
o Large inventories of ___ items
o Elimination of all nonessential marketing expenses
o “Organized abandonment”
Drop
Unsold
• New-Product Success Factors
o ___ to customers
o Producing the best product
o Strong ____
o Vision of ___ market
o Getting every aspect right
o Commitment to new-product development
o ___ -based team approach
Listening
Leadership
Future
Project
• **Info only: Why New Products Fail
o No discernible benefits
o Poor match between features and customer desires
o Overestimation of market size
o Incorrect positioning
o Price too high or too low
o Inadequate distribution
o Poor promotion
o Inferior product
• Product Life Cycles Vary in Length
o Some Products Move Fast (5)
Comparative Advantage
Compatible
Can Be Tried
Easy to Use
Easy to Communicate
• Other Issues in Product Life Cycle Length
o Product life cycles are getting ____
o The early bird usually makes ___
o Fashions and fads
Shorter
Profits
- • Planning for Different Stages of the Product Life Cycle
- o Market Introduction & Growth (5)
Allocate sufficient money
Be flexible
Competition may help adoption
Anticipate speed of movement
Consider all four Ps
• Phasing Out Dying Products
o Profitability vs. Product Line Customer Support
___ May Be Necessary
Don’t Pull the Plug So ___
Sales Decline Can Be ___
- Phase-out
- Quickly
- Profitable
• New Product Planning
- o What Is a New Product?
- o What is FTC Rule?
- o Ethical Dilemmas Exist
- Provides the company with new ways to satisfy customer’s needs
- Can only call a product new for 6 months
• New-Product Development Process (5 steps)
o Idea generation
o Screening
o Idea evaluation
o Development
o Commercialization
o Ideas from customers and users
o Marketing research
o Competitors
o Other markets
o Company people, intermediaries, etc.
• 1. Idea generation
o Strengths and weaknesses (SWOT analysis)
o Fit with objectives
o Market trends
o Rough ROI (return on investment) estimate
• 2. Screening
o Concept testing
o Reactions from customers
o Rough estimates of costs, sales, and profits
• 3. Idea Evaluation
o R&D
o Develop model or service
o Test marketing mix
o Revise plans as needed
o ROI estimate
• 4. Development
o Finalize product and marketing plan
o Start production and marketing
o “Roll out” in select markets
o Final ROI estimate
• 5. Commercialization
• Approaches for New Product Development
- o The process of getting a group to think of unlimited ways to vary a product or solve a problem.
- o The objective of focus group interviews is to stimulate insightful comments through group interaction.
- Brainstorming
- Focus Group
• The first filter in the product development process, which eliminates ideas that are inconsistent with the organization’s new-product strategy or are inappropriate for some other reason.
o Screening
• A test to evaluate a new-product idea, usually before any prototype has been created. Often successful for line extensions.
o Concept Test
• Business Analysis
o Considerations in Business Analysis Stage (4)
Demand
Cost
Sales
Profitability
• **Info only: Commercialization
o Ordering Materials
o Production
o Inventory Buildup
o Distribution Shipments
o Sales Force Training
o Trade Announcements
o Customer Advertising
