New Product Development and Innovation
34 Questions
4 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is a primary reason firms create new products?

  • To exclusively cater to existing customer preferences
  • To eliminate competition immediately
  • To only focus on maximizing short-term profits
  • To maintain market presence by continually innovating (correct)
  • What did the Bartesian company specifically develop to ensure the success of its product?

  • A single drink recipe for cocktails
  • Exclusive distribution rights to retailers
  • A unique marketing strategy only
  • Seven critical prototypes (correct)
  • In the diffusion of innovation theory, what aspect do managers primarily focus on when making product line decisions?

  • Imitating competitors' successful products
  • Overemphasis on customer satisfaction surveys only
  • Understanding how new products are adopted by consumers (correct)
  • Complete reliance on established market leaders
  • What is considered to be the first ‘P’ in the marketing mix that is essential for creating consumer value?

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

    What does innovation primarily add to the market offerings from a firm's perspective?

    <p>Value for both the consumer and the firm</p> Signup and view all the answers

    What is likely to happen to a firm that does not introduce new products or services over time?

    <p>The firm's value is likely to decline.</p> Signup and view all the answers

    Why do firms need to innovate their existing products?

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

    How does managing risk through diversity benefit a firm?

    <p>It allows for the creation of a larger product portfolio.</p> Signup and view all the answers

    What drives the need for continuous product development in the fashion industry?

    <p>Fashion cycles and consumer interest in trends.</p> Signup and view all the answers

    What is a characteristic of saturated markets?

    <p>Declining value of existing products.</p> Signup and view all the answers

    What is one reason why General Mills created over 600 gluten-free products?

    <p>To respond to a growing consumer market.</p> Signup and view all the answers

    Why are video games considered 'fashionable' in the context of consumer demand?

    <p>They continuously offer new challenges and versions.</p> Signup and view all the answers

    What is the implication of the phrase 'don't put all your eggs in one basket' in product management?

    <p>Diversification can help manage risks.</p> Signup and view all the answers

    What defines a product pioneer in the context of market innovation?

    <p>A product that establishes a completely new market or radically alters competition.</p> Signup and view all the answers

    What is an essential feature of the diffusion of innovation?

    <p>It is the process through which the use of an innovation spreads over time.</p> Signup and view all the answers

    What factor significantly enhances the diffusion process of products?

    <p>Ease of observation</p> Signup and view all the answers

    How does relative advantage influence product adoption?

    <p>Consumer adoption is slower for products perceived as less advantageous.</p> Signup and view all the answers

    What is a characteristic of first movers in product adoption?

    <p>They create a distinct market category and are easily recognized by consumers.</p> Signup and view all the answers

    Which of the following is primarily associated with breakthrough products?

    <p>Internal Research &amp; Development</p> Signup and view all the answers

    In the context of idea generation, which process involves generating ideas without dismissing any immediately?

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

    What role do suppliers play in the context of new product development?

    <p>New products can enhance relationships with suppliers and thus benefit business processes.</p> Signup and view all the answers

    What is a primary reason companies might choose to outsource in product development?

    <p>To handle complex processes they cannot manage alone</p> Signup and view all the answers

    What does compatibility imply in product innovation?

    <p>Products should align closely with existing user behaviors and cultural needs.</p> Signup and view all the answers

    What is a common source of ideas for new products in firms?

    <p>A combination of various sources</p> Signup and view all the answers

    What often affects the success of a first mover's product?

    <p>Challenges related to privacy concerns or product functionality.</p> Signup and view all the answers

    Which type of idea generation source involves working with other firms to enhance capabilities?

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

    What might hinder the diffusion of an innovation in the market?

    <p>The innovation being priced significantly higher than alternatives.</p> Signup and view all the answers

    What percentage of new B2B products can be attributed to customer input?

    <p>85%</p> Signup and view all the answers

    How do companies typically acquire rights to use technologies developed by others?

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

    Which group is particularly noted for modifying existing products to suit their needs?

    <p>Lead users</p> Signup and view all the answers

    What method contributed to the development of Henson Shaving's precision safety razors?

    <p>Group brainstorming of ideas</p> Signup and view all the answers

    During which phase does concept testing primarily assess customer reactions?

    <p>Product concept development</p> Signup and view all the answers

    Who conducts alpha testing to ensure product quality?

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

    What term refers to products developed as a direct imitation of competitors' offerings?

    <p>Me Too products</p> Signup and view all the answers

    Study Notes

    New Product Development

    • New products are central to the creation of value for the consumer.
    • Innovation is the transformation of ideas into new products or services, offering value to both firms and consumers.
    • Firms must innovate to stay competitive, and to remain current.

    Innovation for Change

    • Firms create new products to meet changing customer needs.
    • Customer needs change constantly.
    • An example of an innovation is Dyson taking the traditional vacuum cleaner, and redesigning it to not lose suction.

    Market Saturation

    • The longer a product exists in the market, the more likely it will become saturated.
    • Without new products or services, the value of the firm declines.
    • Saturated markets can also offer opportunities for firms.

    Managing Risk through Diversity

    • New products can offer risk management by diversifying the portfolio of products.
    • A portfolio of products is less risky than having just one product!

    Fashion Cycles and Products

    • The Fashion industry relies on trends and experiences short product life cycles.
    • Most sales come from new products.

    Innovating and Improving Relationships

    • New products are not always targeted at end consumers.
    • They can also be used to improve relationships with suppliers.

    Diffusion of Innovation

    • Diffusion of innovation is the process of spreading an innovation throughout a market group over time.
    • Pioneers are new product introductions that establish a completely new market, or radically change the rules of competition and consumer preferences.
    • First movers are product pioneers that are first to create a market or product category, establishing a commanding early market share.

    Adoption of Innovation

    • Relative Advantage – if the product is perceived as better than its substitutes, the diffusion will be quicker.
    • Compatibility - the product should be compatible with the needs of people in different cultures.
    • Observability - is the product easily observed and do its benefits easily communicate to others? If so, then diffusion is enhanced.

    Stages of Development

    • Idea Generation: the process of discovering or creating new product ideas.
      • Internal R&D: focuses on creating breakthrough innovations.
      • Licensing: purchasing technology/ideas from others
      • Brainstorming: group work to generate ideas.
      • Outsourcing - Turning to outside firms to help with development.
      • Competitors’ Products: Reverse engineering or creating "Me Too" copycat products.
      • Customer Input: Approximately 85% of new business to business products come from customers.

    Product Development

    • Concept Testing: A brief written description of the product is created to gauge customer reaction. This can be an early indicator of product success.
    • Product Development: A prototype is created.
      • Alpha Testing: Limited testing with internal employees and staff.
      • Beta Testing: Introducing product to a controlled group of external users for feedback.

    Studying That Suits You

    Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

    Quiz Team

    Related Documents

    Description

    Explore the dynamics of new product development and the role of innovation in creating consumer value. Learn how firms adapt to changing customer needs, manage market saturation, and mitigate risks through product diversity. This quiz covers essential concepts related to maintaining competitiveness in the marketplace.

    More Like This

    Generating New Product Ideas Quiz
    30 questions
    Product Innovation and Customer Needs
    10 questions
    Innovation Management and Market Strategies
    40 questions
    Use Quizgecko on...
    Browser
    Browser