MKT 100 Chapter Notes - Chapter 8: Test Market, Reverse Engineering, Observability
28 Jun 2018
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MKT Chapter 8 - Developing New Products
Product - anything that is of value to a consumer and can be offered through a
marketing exchange
Innovation - the process by which ideas are transformed into new products and
services that will help firms grow
Firms can create and deliver value more effectively by satisfying the
changing needs of their current and new customers by adding new products
With out new products and services, the value of the firm will ultimately
decline
Firms often create a broader portfolio of products which helps them diversify
their risk and enhance firm value better than a single product can
Industries that rely on fashion trends and experience short product life
cycles, most sales come from new products
New product introduction can add tremendous value to firms
oPioneers - new product introductions that establish a completely new
market or radically change both the rules of competition and
consumer preferences in a market (breakthroughs)
First movers - product pioneers that are the first to create a market or product
category, making them readily recognizable to consumers and thus establishing a
commanding and early market share lead
Diffusion of innovation - the process by which the use of an innovation, whether a
product or a service, spreads throughout a market group over time and over various
categories of adopters
Consumer adoption cycle
Innovators - those buyers who wants to be the first to have the new G or S
oTake risks, knowledgeable, not price sensitive
Early adopters - the 2nd group of consumers in the diffusions of innovation
model, to use a G or S innovation, don't like to take as much risks as
innovators
oWait and purchase product after careful review, enjoy novelty
Early majority - members don't like to take much risk and therefore tend to
wait until the bugs are worked out
Late majority - the last group of buyers to enter a new product market
Laggards - consumers who like to avoid change and rely on traditional
product until they are no loner available
Factors affecting product diffusion speed
Relative advantage - if a product is perceived to be better than substitutes,
the diffusions will be relatively quick
Compatibility - real-time information
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Document Summary
Product - anything that is of value to a consumer and can be offered through a marketing exchange. Innovation - the process by which ideas are transformed into new products and services that will help firms grow. Firms can create and deliver value more effectively by satisfying the changing needs of their current and new customers by adding new products. With out new products and services, the value of the firm will ultimately decline. Firms often create a broader portfolio of products which helps them diversify their risk and enhance firm value better than a single product can. Industries that rely on fashion trends and experience short product life cycles, most sales come from new products. New product introduction can add tremendous value to firms: pioneers - new product introductions that establish a completely new market or radically change both the rules of competition and consumer preferences in a market (breakthroughs)
