Marketing Chapter 9: New Products & Life Cycle

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Questions and Answers

Which of the following is NOT an internal source of new product ideas?

Management and staff

Competitors (correct)

Formal research and development

Intrapreneurial programs

What is the purpose of idea screening in the new product development process?

To identify and select the most promising ideas (correct)

To test the feasibility of manufacturing new products

To develop detailed marketing plans for new products

To generate as many ideas as possible

Which of the following is an example of crowdsourcing for new product ideas?

Delfast using high-tech software for design prototypes

Tupperware's Clever Container Challenge contest (correct)

A company's internal research and development team

Google's Area 120 innovation incubator

What does the 'R-W-W' screening framework stand for?

Real, Winning, Worth Doing (A) Signup and view all the answers

What is the main purpose of concept testing?

To identify potential market demand for a product (C) Signup and view all the answers

What is the main purpose of an in-house innovation incubator like Google's Area 120?

To encourage and support internal innovation (A) Signup and view all the answers

What is the difference between a product idea and a product concept?

A product idea is a general thought, while a product concept is a detailed, consumer-focused description. (D) Signup and view all the answers

Which of the following is NOT a benefit of crowdsourcing new product ideas?

Reduced risk of failure (A) Signup and view all the answers

Which of the following is NOT part of a marketing strategy statement?

Production cost analysis (D) Signup and view all the answers

What is the main goal of business analysis in the new product development process?

To determine the feasibility of the product from a financial perspective (B) Signup and view all the answers

How does Delfast utilize technology in its new product development process?

Delfast uses technology to find and evaluate new electric bicycle design prototypes (A) Signup and view all the answers

What is the primary role of product testing in the new product development process?

To measure consumer satisfaction with the product's features (D) Signup and view all the answers

Which of the following is a key difference between internal and external sources of new product ideas?

Internal sources come from within the company, while external sources come from outside the company. (C) Signup and view all the answers

What is the purpose of test marketing in the new product development process?

To evaluate the effectiveness of the marketing strategy in a real-world setting (D) Signup and view all the answers

Which of the following BEST describes the goal of the marketing strategy development stage?

To develop a roadmap for promoting and selling the product (A) Signup and view all the answers

Which stage of the product life cycle is characterized by a slowdown in sales and many suppliers?

Maturity (A) Signup and view all the answers

What is the primary characteristic of the Introduction stage of the product life cycle?

Slow sales growth and little or no profit (C) Signup and view all the answers

What is the primary function of the product development stage?

To develop a physical prototype of the product, based on the concept (D) Signup and view all the answers

What is the impact of "economies of scale" on the Growth stage of the product life cycle?

It leads to a decrease in production costs per unit. (A) Signup and view all the answers

What is the key strategy for companies during the Maturity stage of the product life cycle?

Increase promotional efforts and research and development. (D) Signup and view all the answers

During the Decline stage of the product life cycle, which of the following is NOT a common strategy for companies?

Maintain the current product and marketing strategy. (C) Signup and view all the answers

Which of the following is a characteristic of the Growth stage of the product life cycle?

Rapid market acceptance (C) Signup and view all the answers

Which of the following is NOT a characteristic of a fad?

Long-term market stability (C) Signup and view all the answers

What is the main goal of product development in the context of the product life cycle?

To analyze customer needs and develop new products. (C) Signup and view all the answers

When is test marketing likely?

When a large investment is involved in the new product (C) Signup and view all the answers

What is the main purpose of test marketing?

To evaluate the potential success of a new product in the market (D) Signup and view all the answers

In which scenario would test marketing be unlikely?

Copying a competitor’s successful product (D) Signup and view all the answers

What does the commercialization stage involve?

Introducing a new product into the market (D) Signup and view all the answers

Which of these factors is NOT a crucial component of successful new product development?

Minimizing financial risk (A) Signup and view all the answers

What is the main goal of customer-centered new product development?

To create innovative products that meet customer needs (C) Signup and view all the answers

What is the key benefit of team-based new product development?

It streamlines the product development process and saves time (C) Signup and view all the answers

What is the role of an innovation management system in new product development?

To create a company culture that encourages innovation and generates new product ideas (A) Signup and view all the answers

During the Growth phase, what pricing strategy is typically employed?

Price high enough to drive profits but low enough to penetrate market (A) Signup and view all the answers

What is a key objective for a product in the Maturity stage?

Stress brand differences and benefits (A) Signup and view all the answers

Which of the following strategies is most likely employed during the Introduction phase?

Build selective distribution (A) Signup and view all the answers

During Decline stage, what pricing strategy is often used?

Cut price (C) Signup and view all the answers

At which stage of the product life cycle does heavy sales promotion become prominent?

Introduction (B) Signup and view all the answers

What is the primary goal of advertising during the Growth phase?

Build interest in the mass market, focusing on communicating delivered value (C) Signup and view all the answers

Which of the following is NOT a common strategy employed in the Maturity stage?

Build selective distribution (B) Signup and view all the answers

What is the main objective of a company's product strategy during the Decline stage?

Maximize profits and minimize resource allocation (C) Signup and view all the answers

What is the estimated failure rate for new products introduced each year?

95% (B) Signup and view all the answers

Which of the following is NOT a source for new product ideas?

Imitation (A) Signup and view all the answers

What is the core principle behind Google's product development approach?

Prioritize speed and agility (B) Signup and view all the answers

What does the term "product moonshot" refer to?

Products with a high risk but high potential reward (C) Signup and view all the answers

Which of the following is a key characteristic of Google's product development approach?

Embracing a culture of innovation (D) Signup and view all the answers

What does "acquisition" refer to in the context of product development?

Buying a whole company or its intellectual property (D) Signup and view all the answers

What is the primary benefit of acquiring a company or its intellectual property?

Immediate access to new products or technologies (D) Signup and view all the answers

What is the primary difference between "product improvement" and "product modification"?

Improvement focuses on incremental changes while modification focuses on significant changes (A) Signup and view all the answers

Study Notes

Chapter 9: Developing New Products and Managing the Product Life Cycle

Companies introduce over 30,000 new products annually, but 95% fail.
Google's "Moonshot Factory" exemplifies a rapid, diverse new product development process, embedded within its company DNA.
Innovation is pervasive at Google, encompassing all departments.
New products can be obtained through acquisition (buying a company, patent, or license) or new product development (original products, improvements, modifications, or new brands).

Learning Objectives 9.1 - 9.4

9.1: Explore how companies find and develop new product ideas.
9.2: Define the steps in the new product development process and the major considerations in managing this process.
9.3: Describe the stages of the product life cycle and how marketing strategies change during a product's life cycle.
9.4: Discuss socially responsible product decisions and international product/service marketing.

New Product Development Process

Idea Generation: Internal (company research, staff, intrapreneurial programs) and external (customers, competitors, suppliers, design firms, crowdsourcing - involving public input).
Idea Screening: Identifying good ideas and discarding poor ones (Real? Winnable? Worth doing?).
Concept Development and Testing: Defining the product idea, concept, and image. Concept testing involves input from target consumers. (e.g. HondaJet elite, 1,653 miles, 486 mph, accommodating 7 including crew).
Marketing Strategy Development: Defining the target market, value proposition, sales, market share, and marketing mix strategies.
Business Analysis: Examining sales, costs and profit projections, ensuring they meet company objectives (e.g. product projections, figures).
Product Development: Transforming the product concept into a tangible, functional product. (e.g. Carhartt Crew community).
Test Marketing: Evaluating the product and its marketing program in realistic market settings. (e.g. McDonalds McPlant, 3-year test marketing period).
Commercialization: Launching the product into the market (e.g. launch date, target market zones).

New Product Development Process Considerations

Successful new product development should be customer-centered, team-based, and systematic.

Customer Centered New Product Development

Focuses on solving customers' problems and creating satisfying experiences. Examples: Asics uses consumer input heavily

Team-Based New Product Development

Involves multiple company departments working collaboratively.

Systematic New Product Development

Employs an innovation management system to foster a company culture that generates many new product ideas.

Product Life Cycle

The stages include introduction, growth, maturity, and decline. Sales and profit patterns are characteristic of each stage. Different marketing strategies are appropriate during each stage.

Introduction Stage

Slow sales growth, little or no profit, and high distribution/promotion costs.
Initial marketing focuses on attracting innovators

Growth Stage

Rapid sales increase, new competitors entering the market, profits increase, economies of scale, consumer education, and price lowering to attract more buyers.

Maturity Stage

Slow sales growth, possible profits leveling off and decline, more competition among suppliers, possible substitute products, and increased efforts in promotion and research and development. Modifications are common. (e.g. Campbell Soup website).

Decline Stage

Sales fall off, profits drop, and companies may maintain the product, harvest it, or drop it. Brand revitalization strategies can be adopted. (e.g. Hallmark reimagining its business through digital offerings).

Additional Product Considerations

Socially Responsible Product Decisions: Important to consider public policy/regulations regarding development and disposal, patents, product quality, safety, and warranties.
International Product/Service Marketing: Determining products to introduce in other countries, considering standardization vs customization in packaging and labeling, customs, values, and laws. (Examples: Global product adaptation, McDonald's in France).

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Description

This quiz covers the essentials of developing new products and managing their life cycles, focusing on innovative strategies used by companies like Google. You will explore the product development process, stages of the product life cycle, and socially responsible marketing decisions. Test your knowledge on how businesses innovate and adapt in the market.