Podcast
Questions and Answers
What is a primary reason firms create new products?
What did the Bartesian company specifically develop to ensure the success of its product?
In the diffusion of innovation theory, what aspect do managers primarily focus on when making product line decisions?
What is considered to be the first ‘P’ in the marketing mix that is essential for creating consumer value?
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What does innovation primarily add to the market offerings from a firm's perspective?
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What is likely to happen to a firm that does not introduce new products or services over time?
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Why do firms need to innovate their existing products?
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How does managing risk through diversity benefit a firm?
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What drives the need for continuous product development in the fashion industry?
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What is a characteristic of saturated markets?
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What is one reason why General Mills created over 600 gluten-free products?
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Why are video games considered 'fashionable' in the context of consumer demand?
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What is the implication of the phrase 'don't put all your eggs in one basket' in product management?
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What defines a product pioneer in the context of market innovation?
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What is an essential feature of the diffusion of innovation?
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What factor significantly enhances the diffusion process of products?
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How does relative advantage influence product adoption?
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What is a characteristic of first movers in product adoption?
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Which of the following is primarily associated with breakthrough products?
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In the context of idea generation, which process involves generating ideas without dismissing any immediately?
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What role do suppliers play in the context of new product development?
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What is a primary reason companies might choose to outsource in product development?
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What does compatibility imply in product innovation?
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What is a common source of ideas for new products in firms?
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What often affects the success of a first mover's product?
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Which type of idea generation source involves working with other firms to enhance capabilities?
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What might hinder the diffusion of an innovation in the market?
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What percentage of new B2B products can be attributed to customer input?
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How do companies typically acquire rights to use technologies developed by others?
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Which group is particularly noted for modifying existing products to suit their needs?
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What method contributed to the development of Henson Shaving's precision safety razors?
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During which phase does concept testing primarily assess customer reactions?
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Who conducts alpha testing to ensure product quality?
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What term refers to products developed as a direct imitation of competitors' offerings?
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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
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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.
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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.
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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.
