MKTG6004 Lecture Notes - Lecture 8: Australian Tertiary Admission Rank, Opportunity Cost

• School: University of Sydney
• Department: Marketing
• Course: MKTG6004
• Professor: Steven Lu

Document Summary

The cumulative expenditure curve: curve that represent the accumulation of costs or expenditures on a typical new product project from its beginning to its full launch. Risk/payoff matrix: the product concept being evaluated can either fail or succeed and upon that the two decision options are moving on or killing the project. There can be drop errors (winner is discarded) and go errors (loser is continued to the next evaluation point). The new products team should consider four generic risk strategies which are. Avoidance (eliminate risky project despite opportunity cost), mitigation (reduce risk to an acceptable level through redesigning product to include more backup systems or increase product reliability), Transfer (move responsibility to other firm in form of jv or subcontractor), acceptance (develop contingency plan or deal with risks as they come up). De(cid:272)ay cu(cid:396)(cid:448)e: pe(cid:396)(cid:272)e(cid:374)tage of a(cid:374)y fi(cid:396)(cid:373)"s (cid:374)e(cid:449) p(cid:396)odu(cid:272)t (cid:272)o(cid:374)(cid:272)epts that su(cid:396)(cid:448)i(cid:448)e th(cid:396)ough the de(cid:448)elop(cid:373)e(cid:374)t period from 100% (before concept testing) to 2% (going to market).