Topic 5: New Products Flashcards
1
Q
Why do firms create new products?
A
- Changing customer needs.
- Market saturation.
- Managing risk through diversity.
- Fashion cycles.
- Improving business relationships.
2
Q
Benefits of new products?
A
- Diversify firm’s risk.
- Satisfy the changing needs of consumers.
- Add value to the firm.
3
Q
Types of Product Innovation
A
- Repositioning - existing products for new applications.
- Improvements.
- Additions to existing lines.
- Cost reductions
- New-to-the-world - New innovations.
- New product lines.
4
Q
Diffusion of Innovation
A
- Relative advantage.
- Compatibility; consistant with existing values past experiences.
- Complexity
- Trialability; degree to the innovation can be trialed.
- Observability; the degree to which the results of an innovation are visable to others.
5
Q
Why Products Fail - Internal Factors
A
- Lack of top-management commitment
- Poor launch strategies
- Commitment without consideration of market potential
- Poor organisational culture
- Poor NPD process
- Poor strategic fit
- Inadequate market research
- Inadequate competitive analysis
6
Q
Why Products Fail - External Factors
A
- Misreading customer needs
- Overestimation of demand
- Poor product design/quality
- Lack of differentiation
- Poor product positioning
- Inadequate distribution support
- Competitive retaliation
- Market segment too small
7
Q
How firms develop new products
A
- Idea generation.
- Concept testing.
- Product development.
- Market testing.
- Product lauch.
- Result Evaluation.
8
Q
How are ideas generated?
A
- Internal R&D.
- R&D consortia.
- Licensing.
- Brainstorming.
- Outsourcing.
- Competitors’ products.
- Customer input.
9
Q
Elements of Product Launch
A
- Promotion.
- Place.
- Price.
- Timing.
10
Q
Elements to Result Evaluation
A
- Satisfaction of technical requirements.
- Customer acceptance.
- Satisfaction of the firm’s financial requirements.
