Term
| what are the four major stages of the product life cycle? |
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Definition
1. market introduction
2. market growth
3. market maturity
4. sales decline |
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Term
| what is the product life cycle concerned with? |
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Definition
| new types (or categories) of products in the market, not just what happens to an individual brand |
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Term
| what usually changes during the product life cycle? |
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Definition
| a particular firm's marketing mix |
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Term
| what declines while industry sales are still rising? |
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Definition
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Term
| why do most companies experience loss during the introduction stage? |
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Definition
| because they spend so much money on development |
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Term
| what happens in the market introduction stage? |
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Definition
| sales are low as a new idea is first introduced to a market |
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Term
| what is needed to tell potential customers about the advantages and uses of the new-product concept? |
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Definition
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Term
| what happens in the market growth stage? |
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Definition
| industry sales grow fast--but industry profits rise and then start falling |
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Term
| when do competitors enter the market? |
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Definition
| in the market growth stage |
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Term
| what is typical of the market growth stage? |
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Definition
| monopolistic competition--with down-sloping demand curves |
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Term
| what is the time of biggest profits for the industry? |
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Definition
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Term
| what happens towards the end of the market growth stage? |
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Definition
| industry profits begin to decline as competition and consumer price sensitivity increases |
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Term
| when does the market maturity stage occur? |
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Definition
| when industry sales level off and competition gets tougher |
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Term
| why do industry profits go down throughout the market maturity stage? |
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Definition
| because promotion costs rise and some competitors cut prices to attract business |
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Term
| persuasive promotion becomes important in what stage? |
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Definition
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Term
| in the U.S., what markets are in market maturity? |
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Definition
| most cars, boats, and many household appliances |
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Term
| what happens during the sales decline stage? |
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Definition
| new products replace the old |
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Term
| duing the sales decline stage, how can firms make profit until the end? |
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Definition
| by successfully differentiating their products |
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Term
| what characteristics propel a new product idea more quickly through the early stages of the life cycle? |
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Definition
1. the greater the comparative advantage of a new product over those already on the market
2. the product is easy to use and if its advantages are easy to communicate
3. if a product can be tried on a limited basis, without a lot of risk to the consumer
4. if the product is compatible with the values and experiences of target customers |
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Term
| fashion related products tend to have what kind of life cycles? |
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Definition
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Term
| what is the limit for calling a product new, according to the Federal Trade Commission (FTC) |
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Definition
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Term
| how can new products fail? |
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Definition
1. companies fail to offer a unique benefit or underestimate the competition
2. idea is good but company has design problems, or product costs much more to produce than was expected
3. some companies rush to get product on market without developing complete marketing plan |
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Term
| what are the five steps to a new product development process? |
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Definition
1. idea generation
2. screening--evaluating the new ideas with SWOT analysis
3. idea evaluation
4. development (of product and marketing mix)
involves research, development, engineering design
5. commercialization |
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Term
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Definition
getting reactions from customers about how well a new product idea fits their needs
uses marketing research |
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Term
| what are product managers? |
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Definition
manage specific products--often taking over the jobs formerly handled by an advertising manager
major responsibility is promotion |
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Term
| total quality management (TQM) |
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Definition
| philosophy that everyone in an organization is concerned about quality throughout all of the firm's activities, to better serve customer needs |
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Term
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Definition
| graph that shows the number of times a problem cause occurs, with problem causes ordered from most frequent to least frequent |
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Term
| what are two keys to improving service quality? |
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Definition
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Term
| what does empowerment mean? |
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Definition
| giving employees the authority to correct a problem without first checking with management |
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Term
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Definition
| picking a basis of comparison for evaluating how well a job is being done |
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