1
Q
what is innovation ?
A
process by which ideas are transformed into new products & services that help firms grow
2
Q
without innovation, firms would have what only 2 choices ?
A
- continue to market current products
- take same product to another market w similar customers
3
Q
what is a product ?
A
anything that is a value to a consumer & can be offered through a marketing exchange
4
Q
how do firms create & deliver value when they add new products ?
A
- satisfy changing needs of their current & new customers
- keeping customer from getting bored w current stuff
5
Q
why do most new products fail ?
A
- too complex to understand
- neglect product testing (can be low quality)
- lack of knowledge of consumer needs
- testing wrong market segment
- poor positioning
6
Q
what does it mean for a market to be saturated ?
A
- when demand stagnates (stops) or decreases
- the longer a product exists, the more likely the market will become saturated
7
Q
what does new market/product refer to
A
new doesn’t necessarily mean new to the world
8
Q
how can saturated markets offer opportunities ?
A
- offer opportunities for mass marketers (niche markets)
- focusing on smaller/specific groups
9
Q
what are the 7 factors why firms develop new products ?
A
- changing customer needs
- market saturation
- managing risk through diversity
- fashion cycles
- improving business relationships
- improving value
-competitive pressures
10
Q
describe managing risk through diversity
A
- innovation allows firms to create a broader portfolio of products (better than having one single product)
- leads to diversification of risk (if some products perform poorly, others will make up for it)
11
Q
describe fashion cycles
A
- fashion industry rely on trends
- experience short product life cycles
- most sales come from new products
- consumers wanna be challenged by another game in the most recent version (ex. new COD szn)
12
Q
describe improving business relationships
A
- function to improve relationship w suppliers
- ex. Walmart works w its suppliers to get requested products on the shelves
13
Q
describe improving value
A
once a consumer is used to something, they start looking for next (demand for more)
14
Q
describe competitiveness pressures
A
- when faced w competition from new & innovative players, they’re forced to adapt (innovate)
- or else they’d risk losing market share
15
Q
what is diffusion of innovation ?
A
- an innovation spreads throughout a merit group, over time & over various categories of adopters
- help marketer understand the rate at which consumers r likely to adopt new P/S
16
Q
who are pioneers ?
A
- new product that creates a brand new market
- change rules of competition & consumer preferences in market
- ex. apple ipod, google
17
Q
what is disruptive innovations ?
A
new, simpler, less sophisticated & less expenses than existing P/S
18
Q
who are first movers ?
A
- first to create the market/product category
- ex. chat gpt, gilette, sony
19
Q
what are the pros & cons of being a first mover ?
A
pros:
- easily recognizable (brand consumers recall easily)
- build witching costs (likely to say loyal once they trust brand)
- high market share
cons:
- spend more & make greater marketing effort to create new category
- less sophisticated design & priced high (competitors can create better & low price products)
20
Q
purchasers can be divided into what 5 groups ? (diffusion of innovation model/adoption cycle)
A
how soon they buy a product after it has been introduced
- innovators: buyers who wanna be the first to have the new P/S
- enjoy taking risks, highly knowledgable, not price sensitive - early adopters: use P/S innovation
- don’t like to take much risks
- wait & purchase product after careful review
- opinions leaders - early majority: wait until bugs are worked out
- don’t like to take risks
- if group isn’t big enough, the P/S fails - late majority: last group of buyers to enter new product market
- product has achieved full market potential
- sales tend to decline when they enter the market - laggards: avoid change & rely on traditional producers until no longer available
- may never adopt certain P/S
21
Q
what is the adoption cycle used for ?
A
- firms can predict which types of customers will buy their new P/S right after its introduction
- later, product gets more & more accepted in market
22
Q
what does diffusion speed refer to ?
A
- products are adopted at different rates
- speed with which products are adopted depends on several product characteristics
23
Q
what are the 4 factors that influence product diffusion ? (adoption of new products)
A
- relative advantage: how superior a product is compared to its competitors
- if product is perceived better than its substitutes, the diffusion will be fast - compatibility: how well the new idea/product fits with people’s values, past experiences & needs
- products may no be compatible with ur beliefs (ex. I don’t believe in using chatgpt) - observability: are other people using it
- when products are easily observed, their benefits are easily communicated to others (speeds diffusion process)
4.complexity & trialability
- complexity: how complex or easy is it to use/understand the product
- trialability: product can be tested/sampled before buying (ex. cleaning spray vs vacuum)
24
Q
what are the 6 steps of the product development process ?
A
- idea generation: development of viable new product ideas
- concept testing: testing the ne product idea among a set of potential customers
- product development: development of prototypes & product
- market testing: testing actual products in a few test markets
- product launch: full scale commercialization of product
- evaluation of results: analysis of performance of are product & making appropriate modifications
25
what are 5 different sources of ideas (idea generation) ?
1. internal R&D: people with expertise (ex. scientists) work to solve complex problems & develop new ideas
- often don't understand consumers that well
2. licensing: firm buy rights to tech/ideas from other research firms
3. brainstorming: groups work tgt to generate ideas
- gives a chance for everyone to pitch in new ideas
4. competitor's products: reverse engineering (taking a product apart to understand how it works, how it's made, how to recreate/improve)
- copy cat products
5. customer input: most effective method
- in B2B, most products come from customers
- lead users: modify existing products according to their specific needs
26
what is outsourcing ?
when products have trouble going through the product development process, they ask outside firms for help
27
describe the concept testing stage
- writing something, what's the idea ???
- concept statement (idea) is presented to potential buyers (reps target market) to evaluate their reaction
- concept statement: brief description of product, its technology, working principles, forms what customer needs it would satisfy
28
describe the product development stage
- life stage: conversion of idea to reality (bringing idea to life)
- companies come up with realistic solution
- prototype -> alpha testing -> beta testing
29
after a prototype is made, what is alpha testing & beta testing ?
- alpha testing: whether the product will perform according to its design & satisfy the need it was intended for
- ex. using own employees
- beta testing: using real customer (select #) to determine its functionality performance, potential problems
30
describe the market testing stage
- determine success potential of the new product
- introduce product in a limited geographical area
31
what are the 2 types of market testing ?
1. premarket tests
- small group fo customers (bigger than beta testing)
- customer are surveyed (used for marketing research)
- based on results, firm will make decision (introduce product, abandon, redesign, revise marketing plan)
2. test marketing
- mini product launch
- predict market demand/size
- more pricey
32
describe the product launch stage
- product goes full scale launch w all marketing mix in place
- descries how to position the product
33
Once a company decides to launch a new product, describe in detail, what decisions they must make. Be as specific and justify your answers?
- firm confirm its target markets
- describe how it **positions the product** (based on market research & test marketing)
- finalizes the marketing mix (4Ps), timing if market launch & marketing budget
34
describe the 4 factors related when launching a new product
1. promotion: promotion is required at each link of supply chain
- trade promotion: promotion to wholesalers & retailers to buy new products (push strat)
- manafacturer create demand for consumers, they go directly to retailer (pull strat)
2. place: coordinate delivery & storage products to ensure availability
- product is accessible
3. price: understand price sensitivity of customer within each target segment
- easier to start with high price & offer promotion, over time lower price
4. timing: when to launch product
- take advantage of some trend/events
- ex. Valentine’s Day
35
describe the evaluation of results stage
measure success of new predict by 3 interrelated factors:
1. its satisfaction of technical requirements (ex. performance)
2. customer acceptance
3. its satisfaction of firm's financial teuqiremtns (ex. sales & profits)
36
what is the product life cycle ?
- defines stages that new products move through as they enter, get established in & leave the market place
- starting point for marketers when planning their strategy
37
what are the 4 stages in a product life cycle
1. introduction: innovators start buying the product
2. growth: product gains acceptance, demand sales increase, more competitors enter the market
3. maturity: industry reach their peak
- firms rejuvenate products (add features or reposition)
4. decline: when sales declines & product exists market
38
what does a product life cycle curve is assumed to look like ?
bell shaped
39
what does the product life cycle curve look like for a high learning product ?
starts slow, sales grow gradually then declines
40
what does the product life cycle curve look like for a low learning product ?
sales rise quickly, grow fast then slowly decline
41
what does the product life cycle curve look like for a fashion product ?
sales go up & down over time, may come back in style again
42
what does the product life cycle curve look like for a fad product ?
- very fast in sale, peaks quickly then drops off fast (short lived trend)
- companies don't want this
