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A product that customers perceive to be new and different from existing products
Innovation
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Federal Trade Commission says that
- 1. product must be entirely new or changed significantly to be called "new"
- 2. product may be called new for only six months
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Three types of innovations
- Continuous: little behavioral and technological change
- Dynamically Continuous: Little behavioral and high technological change
- Discontinuous: High behavioral and technological change
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most common form of innovation
consumers don't need to learn anything new
ex. brand extensions, line extensions
Knockoffs copy the design of an original product
Modification
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type of dynamically continuous innovations
pronounced modification to an existing product requires a modest amount of learning or behavior change
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totally new product
creates major changes in the way we live
consumers must engage in a great deal of new learning
ex. iPhones
discontinuous innovations
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Two key elements of business success
Innovation and Marketing
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Marketing team is on the front lines of whats working, whats not and what's needed
while innovation team is on the inside providing ideas
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The goal of innovation is to give customers the best possible products, services and experiences which makes marketing a much simpler task
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continuous process of looking for entirely new products or to make something better
New Product development
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4 reasons for new product failure
- 1. Creating a product with no benefit
- 2. overestimating the size of the market
- 3. Poor positioning strategy
- 4. poor implementation of the marketing mix
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Major Strategies in New Product Development (8)
- Idea generation
- Idea screening
- Concept development and testing
- Marketing strategy development
- business analysis
- Product development
- Test Marketing
- Commercialization
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Inviting brand communities of people into the new product innovation process
ex. Dell innovation Challenge
OpenIdea
99Designs
Crowdsourcing
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3 aspects of product concept development
product idea concept and image
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designing an initial marketing strategy for a new product based on the product concept
Marketing strategy development
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Marketing strategy statement
- Target market description
- Value proposition planned
- sales, market-share, and marketing mix
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the products commercial viability is assessed in this phase
review of the sales, costs, and profit projection for a new product to find out whether these factors satisfy the company's objectives
business analysis
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Firm engineers refine and perfect the new product prototypes or test versions of the proposed product are developed
technical development
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