Term
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Definition
| The process by which ideas are transformed into new products and services that will help firms grow |
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Term
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Definition
| New product introductions that establish a completely new market or radically change both the rules of competition and consumer preferences in a market |
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Term
| Describe the (5) groups of the consumer adoption cycle (or diffusion of innovation model) |
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Definition
1. Innovators: Buyers who want to be the first to have the new product or service (2.5%)
2. Early adopters: Second group to buy the product, aren't as risky as innovators (13.5%)
3. Early majority: tend to wait until bugs are worked out (34%)
4. Late majority: wait until product has achieved full market potential (34%)
5. Laggards: consumers who like to avoid change (16%) |
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Term
| Describe the (4) product characteristics that determine the speed which products are adopted |
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Definition
1. Relative advantage - if the product is better than substitutes, diffusion is quick
2. Compatibility - with mode of operation
3. Observability - benefits are easily communicated, enhancing the diffusion process
4. Complexity and trial-ability - products that are relatively easy to try diffuse quicker |
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Term
| Name the (6) steps that are taken when firm develop new products |
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Definition
1. Idea generation
2. Concept testing
3. Product development - process of balancing various engineering, manufacturing, and economic considerations to develop a product; using alpha testing, beta testing
4. Market testing
5. Product launch
6. Evaluation of results |
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Term
| Name (5) ways in which idea generation can take place |
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Definition
1. Internal research and development
2. Licensing - firms buying rights to use research from other firms
3. Brainstorming
4. Competitor's products - using reverse engineering: analyzing a competitor's product and making it better
5. Customer Input |
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Term
| Name (2) forms of market testing |
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Definition
1. Premarket tests: conducted before a product or service is brought to market to determine how many customers will try and then continue to use it
2. Test marketing: introduces a new product or service to a limited geographical area prior to national launch |
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Term
| Name the (4) things that product launch involves |
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Definition
1. Promotion
2. Place
3. Price
4. Timing |
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Term
| Name/describe the (4) stages of the product life cycle |
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Definition
1. Introduction stage: innovators start buying the product
2. Growth stage: product gains acceptance, demand and sales increase, competitors emerge
3. Maturity stage: Industry sales reach their peak, firms try and rejuvenate their products by adding new features or repositioning them (entry into new markets)
4. Decline stage: sale decline and the product eventually exits the market |
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