product devleopment - semester 2

Question 1

what counts as a successful product?

Answer 1

Schneider and Hall (2011) say that the product must be profitable after 3 years

Question 2

what does NPD include

Answer 2

Includes improvements, modifications, new brands and development efforts

Question 3

what is a high risk product?

Answer 3

A completely new product that has never

been offered before

Question 4

what is a medium risk product?

Answer 4

The company already makes similar products, however there is a substantial change in how the product works/is used

Question 5

what is a low risk, minor innovation product?

Answer 5

The company already makes similar products, used in a similar way. Minor changes to product (e.g. new flavours, improved functioning)

Question 6

characteristics of a high risk product?

Answer 6

Challenging, create new market and convince people to buy product
Need to educate people about product
Benefits include market share, dominant position & harder for competitors
Consumer suspicion – does it work?

Question 7

characteristics of a low risk, minor innovation product?

Answer 7

New flavour, faster processer, new ingredient in shampoo to make it work better
Little risk because company makes similar products, so therefore only minor changes are inserted into the product.
Little consumer ed
more easily copied by compietiors
Consumers may feel change not worth extra money
Competitor retailiation mean that competitors could innovate better goods than you as they already know what you have produced so can add additional deatures that you included

Question 8

characteristics of a low risk, no innovation product?

Answer 8

Exisiting products serve same purposes, no additional features
Lower research and development costs
Aesthetic appeal
Example is Netflix and amazon instant video (same products)
Under price competitor, people go cheaper as its same product

Question 9

characteristics of a medium risk product?

Answer 9

Example includes dyson bagless vacuum cleaner
Market is already there they just had to convince people that bagless was beneficial
People asked if they needed it?
Need to educate consumer about product to an extent
People know about vacuums in genral so know problems assosatied with bags

Question 10

what is a low risk, no innovation product?

Answer 10

The company copies existing competitor products, adding no significant features or benefits. Differences are mainly aesthetic

Question 11

benefits to introducing new products?

Answer 11

Replace declining products
Tap into emerging markets
Competitive advnatge- encourage brand switching with new product benefits
Avoid risk of not innovating, being outexposed by compeitiors

Question 12

risks to intorducing new products?

Answer 12

High research/engeneer cost
High launch costs – more averising and promotion
Distracts consumers from other goods in business
High failure rate (80%)
Long time to produce profits

Question 13

why do products fail?

Answer 13

1) Over estimate market size/demand (love product and focus to much on it)
2) Poor design – negative press on social media
3) Haven’t thought out benefits of buying products, why buy good?
4) Competing to directly
5) To expensive to produce
6) Not a good promotional strategy

Question 14

what attracts people to products?

Answer 14

New product is better then replacement
Product fits into persons life
Tried out before purchase
Seen by others

Question 15

8 stages of NPD

Answer 15

idea generation
idea screening
concept development and testing
marketing stratergy devlopment
business analaysis
product devlopment 
test marketing 
commercialisation

Question 16

what is idea screening?

Answer 16

 Will customers buy it?
 USP
 Resources to make the product successful
 Does it fit with business stratergy

Question 17

what is idea generation?

Answer 17

Some companies hire R&D
Google has innovation team where they allow them time by themselves to create ideas
Suppliers can help you identify new materials to increase sales
Competitors, learn from their trends/products
Consumers, identify wants and needs

Question 18

what is marketing stratergy development?

Answer 18

	Value propostion 
	Target market 
	Marketing objectives 
	Marketing budget 
	Marketing mix

Question 19

what is business anayalsis?

Answer 19

 Don’t overestimate sales
 Will product be profitable
 How long will it take to become profitable
 To far down line to cut product
 Last chance to drop product before expensive stages

Question 20

what is product development?

Answer 20

 R&D teams create product
 High costs
 Prototypes/feedback
 Consumer testing

Question 21

what is test marketing?

Answer 21

 Do consumers buy product
 Tested in real life settings
 Enables time to change product before officially launching
 High costs and competitors trying to take your product off the market by holidng sales promotions/copying

Question 22

what is commercialisation?

Answer 22

 Sprinkler stratergy – immeidtae national launch – big buzz
 To late to correct everything as its relased nationally
 Waterfall stratergy is relasing city by city
 Mistaies have less impacts
 Less impactful

Question 23

what are the 5 stages of the product lifecycle?

Answer 23

product devlopement
introduction
growth
maturity
decline

Question 24

example product of the product lifecycle?

Answer 24

apple watch
at first people questioned if it worked and only the early adaptors brought the product
matuirty is when mjority of people brought it as it gained good repuatation
declining stage occured when cheaper alternatives were released

Question 25

what is intro stage of the product lifecyle?

Answer 25

Intro – build awareness/ target people

Question 26

what is growth stage of the product lifecyle?

Answer 26

Growth – people start buying product, still have to invest in market share to gain profit

Question 27

what is maturity stage of the product lifecyle?

Answer 27

Maturity – sales level off – aggressive promotions to gain more sales as not many more people to target (time to maximise products)

Question 28

what is decling stage of the product lifecyle?

Answer 28

Decline – sales drop and fall, lack of interest in product

Question 29

what is crowdsourcing?

Answer 29

Crowdsourcing is offering consumers the choice to create goods, good way for innovation with minimum cost
Ideas are voted and short listed, are then created

Question 30

2 examples of firms that use crowdsourcing?

Answer 30

lego ‘ideas’

my starbucks idea