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New Product
a prdocut new to the world, the market , the producer, the seller or some combo of these
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Categories of New Products
- New-to-the-world: smallest category
- New Product Lines
- Additions to existing product lines
- Improvements or revisions of existing products
- Repositioned products
- Lower-priced products
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New-Product Strategy
plan that links the new-product development process with the objectives of the mktg dept, the biz unit and the corporation
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Idea Generators
- Customers
- Employees
- Distributors
- Vendors
- Competitors
- R&D
- Consultants
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Screening
- 1st filter in prod. development process
- eliminates ideas that are inconsistent with teh org's new-product strategy or are obviously inappropriate for some other reason
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Concept Test
- test to evaluate a new-product idea, usually before any prototype has been created
- used during screening stage
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Business Analysis
- 2nd stage in prod. development process
- where preliminary figures for demand, cost, sales & profitability are calculated
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Development
- 3rd stage
- in which a prototype is developed and a mktg strategy is outlined
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Simultaneous product development
- a team-oriented approach to new-product development
- allows firms to shorten the devel. process & reduce costs
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Test Marketing
- limited introduction of a product and a mktg program to determine the rxns of potential customers in a market situation
- expensive
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Alternatives to Test Mktg
- Scanner-based research
- Simulated (laboratory) Market testing
- Internet
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Simulated (Lab) Market Testing
- presentation of advertising and other promotional materials for several products, including a test product, to members of the product's target market
- cheaper
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Commercialization
- final stage in new-product devel.
- the decision to market a product
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Innovation
product perceived as new by a potential adopter
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Diffusion
process by which the adoption of an innovation spreads
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5 Categories of Adopters
- Innovators: first 2.5% to adopt
- Early Adopters: next 13.5% **new product's best friend**
- Early Majority: next 34%
- Late Majority: next 34%
- Laggards: final 16%
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5 Product Characteristics to Predict/Explain rate of Acceptance
- Complexity: more complex product, slower its diffusion
- Compatibility
- Relative advantage
- Observability
- "Trialability"
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Product Life Cycle (PLC)
a concept that provides a way to trace the stages of a product's acceptance, from its introduction (birth) to its decline (death)
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4 Stages of PLC
- Introduction
- Growth
- Maturity
- Decline
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Product Category
- all brands that satisfy a particular type of need
- does not dictate mktg strategy
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Introductory Stage
- full-scale launch of a new product into the marketplace
- characterized by: high failure rate, little competition, frequent prod. modification & limited distribution
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Growth Stage
- 2nd stage of PLC when sales typically grow at an increasing rate
- many competitors enter the market
- large companies may start to acquire small pioneering firms
- profits are healthy
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Maturity Stage
- 3rd stage of PLC
- period during which sales increase at a decreasing rate
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Decline Stage
- 4th and final stage
- long-run drop in sales
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