Marketing Strategies in Consumer Behavior
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Marketing Strategies in Consumer Behavior

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What is the primary source of new B2B products according to customer input?

  • Reverse engineering
  • Lead users modifying products (correct)
  • Marketing research
  • Competitors’ products

    • Innovative customers have little impact on product design in the fashion industry.

    False

    What is concept testing?

    It is the process of presenting a brief written description of the product to customers to gather their reactions and determine whether to proceed with development.

    In alpha testing, Ben & Jerry's primarily uses their own ______ to evaluate the taste and feel of new products.

    <p>employees</p> Signup and view all the answers

    Match the following stages with their descriptions in product development:

    <p>Prototyping = Creating a model of the product for evaluation Alpha Testing = Internal testing by employees for quality assurance Beta Testing = Testing product usability by selected external users Concept Testing = Gathering customer feedback based on a product idea</p> Signup and view all the answers

    Why do firms add new products?

    <p>To satisfy changing needs of current and new customers</p> Signup and view all the answers

    Market saturation occurs when a product has been in the marketplace for a short time.

    <p>False</p> Signup and view all the answers

    What is the main benefit of having a diversified portfolio of products?

    <p>It leads to a diversification of risk.</p> Signup and view all the answers

    The famous vacuum cleaner brand that redesigned its product to improve suction is _____

    <p>Dyson</p> Signup and view all the answers

    What strategy do apparel fashion designers use to generate sales?

    <p>Produce entirely new product selections several times a year</p> Signup and view all the answers

    Most sales in the fashion industry come from existing products.

    <p>False</p> Signup and view all the answers

    In the context of market strategy, what does the phrase 'don’t put all your eggs in one basket' mean?

    <p>It suggests that businesses should diversify their product offerings to reduce risk.</p> Signup and view all the answers

    Match the following concepts with their key characteristics:

    <p>Market Saturation = Reduction in product value over time Innovation = Creation of new products to stay competitive Fashion Cycles = Short product life cycles influenced by trends Risk Diversification = Balancing a range of products to minimize losses</p> Signup and view all the answers

    What is the primary purpose of new products according to the content?

    <p>Improve relationships with suppliers</p> Signup and view all the answers

    Pioneers are defined as new product introductions that create a completely new market.

    <p>True</p> Signup and view all the answers

    Give an example of a product that serves as a pioneer.

    <p>Apple Watch</p> Signup and view all the answers

    The process by which the use of an innovation spreads throughout a market is known as _______.

    <p>diffusion of innovation</p> Signup and view all the answers

    Which of the following concepts indicates that a product is perceived to be better than substitutes?

    <p>Relative advantage</p> Signup and view all the answers

    Match the following terms with their definitions:

    <p>Pioneers = Establish a completely new market First Movers = First to create a market or product category Relative Advantage = Perceived superiority over substitutes Compatibility = Adaptation for diverse cultural needs</p> Signup and view all the answers

    Google Glass succeeded in establishing a commanding market share.

    <p>False</p> Signup and view all the answers

    Products like the Swiffer are considered to have a relative advantage because they make cleaning faster, easier, and more _______.

    <p>efficient</p> Signup and view all the answers

    What is a key benefit of observability in product development?

    <p>It enhances the diffusion process.</p> Signup and view all the answers

    Internal Research & Development (R&D) is typically low in product development costs.

    <p>False</p> Signup and view all the answers

    What is one common source of ideas for new products based on competitor analysis?

    <p>Competitors' products</p> Signup and view all the answers

    Firms can purchase the rights to technology or ideas from other firms through __________.

    <p>licensing</p> Signup and view all the answers

    Match the idea generation method with its description:

    <p>Internal R&amp;D = Source of technological and breakthrough products Licensing = Purchasing rights to technology Brainstorming = Collaborative idea generation Outsourcing = Hiring external firms to aid in development</p> Signup and view all the answers

    What was the primary method used by SimpliSafe for developing its video-enabled doorbell?

    <p>Outsourcing</p> Signup and view all the answers

    Brainstorming involves immediately dismissing ideas that are not feasible.

    <p>False</p> Signup and view all the answers

    Name one company that uses data analysis from its products to support the development of new offerings.

    <p>General Motors</p> Signup and view all the answers

    What is typically the first stage of the Product Life Cycle?

    <p>Introduction</p> Signup and view all the answers

    During the Maturity stage of the Product Life Cycle, the number of competitors typically decreases.

    <p>False</p> Signup and view all the answers

    What is the purpose of alpha testing in product development?

    <p>To identify any bugs or issues before moving to beta testing.</p> Signup and view all the answers

    The last stage of the Product Life Cycle is the ______.

    <p>Decline</p> Signup and view all the answers

    Match the following stages of the Product Life Cycle with their characteristics:

    <p>Introduction = Sales are low, profits are negative or low Growth = Sales are rising and profits are rapidly increasing Maturity = Sales peak, profits are high Decline = Sales and profits are declining</p> Signup and view all the answers

    Which of the following is NOT a strategy for extending the Product Life Cycle?

    <p>Increase price dramatically</p> Signup and view all the answers

    Market testing involves exposing customers to a mini product launch.

    <p>True</p> Signup and view all the answers

    What are the typical customers in the growth stage of the Product Life Cycle?

    <p>Early adopters and early majority.</p> Signup and view all the answers

    According to product development stages, after beta testing, the next step is __________.

    <p>product launch</p> Signup and view all the answers

    What does the firm evaluate during the evaluation of results phase?

    <p>Both B and C</p> Signup and view all the answers

    Study Notes

    Changing Customer Needs

    • Firms can create value by meeting changing customer needs with new products or service offerings.
    • Dyson redesigned the vacuum cleaner to improve its functionality and appeal to customers.

    Market Saturation

    • As a product ages in the marketplace, it's more likely the market will become saturated.
    • Without new products or services, a firm's value declines.
    • Saturated markets can also present opportunities for new products or services to address specific needs.

    Managing Risk Through Diversity

    • Innovation helps companies diversify their risk by expanding their product portfolio.
    • A broader product portfolio is more resilient than relying on a single product.

    Fashion Cycles

    • The fashion industry depends on trends and experiences, resulting in short product life cycles.
    • New products are crucial for driving sales in the fashion industry.
    • Consumers demand new versions of video games, as they seek new challenges and experiences.

    Improving Business Relationships

    • New products don't always target end consumers; they can also improve relationships with suppliers, such as Walmart.

    Adoption of Innovation

    • Diffusion of innovation describes how the use of new products or services spreads across a market group over time.

    Pioneers

    • Breakthrough products establish entirely new markets or completely change industry competition and consumer preferences.
    • Apple's Apple Watch is an example of a pioneer product.

    First Movers

    • These are the first to create a market or product category, gaining early recognition and market share.
    • Google Glass failed due to privacy concerns, system bugs, and restrictions in public spaces.

    Using the Adoption Cycle

    • The adoption cycle helps understand how consumers adopt new products or services.

    Relative Advantage

    • Products with a perceived advantage over substitutes tend to diffuse quickly in the market.
    • Swiffer's relative advantage over competitors lies in its faster, easier, and more efficient cleaning process.

    Compatibility

    • Products that adapt to various cultures and needs, such as different sizes, enjoy greater compatibility.

    Observability

    • Products that are easily observed benefit from greater communication of their benefits or uses, promoting wider adoption.

    How Firms Develop New Products

    • Firms use a variety of methods to generate new product ideas.

    Idea Generation

    • Internal R&D focuses on developing new technologies and products.
    • Licensing involves acquiring rights to technology or ideas from other companies for a fee.
    • Brainstorming encourages group collaboration to generate new ideas without immediate judgment.
    • Outsourcing provides access to external expertise for specific product development stages.
    • Competitors' products can provide insights for reverse engineering, developing "me too" products, or identifying market gaps.
    • Customer input is crucial, especially in B2B settings, where a significant portion of new products are derived from customer needs.

    Internal Research & Development (R&D)

    • R&D development often involves high costs.
    • R&D is a frequent source of technologically advanced products.
    • General Motors leverages its OnStar system for remote communication and data analysis to support new car development.

    Licensing

    • Companies purchase licenses to use technology or ideas from other research-intensive organizations.
    • Universities also contribute to this process by licensing their research.

    Outsourcing

    • Companies may outsource product development to outside firms when they lack internal capability or expertise.

    Customer Input

    • Customer input is crucial in B2B, accounting for a significant portion of new product development.
    • "Lead users" modify existing products to meet their own needs, influencing trends.

    Concept Testing

    • Concept testing is essential to gauge customer reactions to a new product idea before proceeding further.
    • It involves a brief written description of the product and triggers further market research.

    Product Development

    • This stage involves creating prototypes, testing them internally (alpha testing) and with external groups (beta testing).
    • Ben & Jerry's conducts alpha testing with its employees to fine-tune product taste and feel.

    Market Testing

    • Pre-market testing involves surveying customers on their willingness to purchase the product.
    • Mini product launch tests the real-world demand for the product in a smaller market before full-scale launch.

    Product Launch

    • This involves defining the launch timing, the product's promotional strategy, its pricing, and distribution channels.

    Evaluation of Results

    • Firms evaluate their product development program by assessing technical specifications, customer acceptance, and financial performance.

    The Product Life Cycle

    • The product life cycle encompasses a product's journey through the marketplace, from introduction to decline.

    Stages & Characteristics of The Product Life Cycle

    • Introduction: Low sales, negative or low profits, characterized by innovators as primary consumers.
    • Growth: Rising sales and profits, early adopters and early majority join in.
    • Maturity: Peak sales and profits, late majority join, higher number of competitors.
    • Decline: Declining sales and profits, laggards as primary consumers, fewer competitors.

    Strategies for Extending the Product Life Cycle

    • Develop new product uses.
    • Modify existing products to meet changing needs.
    • Increase product usage frequency.
    • Expand the user base.
    • Target new customer segments.
    • Reposition the product for a different market.
    • Adjust the marketing strategy.

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    Chapter 8 Developing New Products PDF

    Description

    This quiz covers key concepts regarding changing customer needs, market saturation, risk management through product diversity, and fashion cycles. Understand how innovation and customer preferences influence product offerings and value creation in various industries.

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