Product Planning Strategy - Chapter 3
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Questions and Answers

What is assessed at the conclusion of the launch stage?

  • Market research techniques
  • Critical points in development
  • Consumer interests and preferences
  • Favorable sales levels and profitability (correct)

    • What does life cycle management primarily focus on?

  • Budget allocation for marketing efforts
  • Continuous monitoring and possible refinement of the product (correct)
  • Initial development and concept realization
  • Market testing and prelaunch activities

    • Which of the following is NOT a criterion for a good product development process?

  • Integration of the team with external partners
  • Flexibility to accommodate changing conditions
  • Providing substantial freedom for the development team
  • Strict adherence to pre-established timelines (correct)

    • What aspect of the product is evaluated to determine whether to continue working on it?

    <p>Financial viability and marketability (B)</p> Signup and view all the answers

    Which of the following is a potential outcome of the life cycle management stage?

    <p>Disposal and substitution with a next-generation product (A)</p> Signup and view all the answers

    What should a well-structured product development process provide along the way?

    <p>Checkpoints for assessment and evaluation (D)</p> Signup and view all the answers

    What does the gate at the conclusion of the launch stage assess?

    <p>The success of the product launch (B)</p> Signup and view all the answers

    Which component is critical for integrating the product development team effectively?

    <p>Alignment with the rest of the firm and its environment (D)</p> Signup and view all the answers

    What is the primary focus of the PACE process in product development?

    <p>Expediting time-to-market (B)</p> Signup and view all the answers

    What significant addition does the fourth-generation product development process include?

    <p>Discovery stage (D)</p> Signup and view all the answers

    What approach do idea-directed companies typically prefer in their product development process?

    <p>Conducting concept generation first (D)</p> Signup and view all the answers

    What is the first step in O’Connor's product development process?

    <p>Lay the foundation (D)</p> Signup and view all the answers

    Which of the following is a challenge in new product development?

    <p>Process validation (B)</p> Signup and view all the answers

    What is the purpose of the opportunity identification stage in product development?

    <p>To define acceptable new product opportunities (D)</p> Signup and view all the answers

    What is a key requirement for sustaining the product development process?

    <p>Top management support (D)</p> Signup and view all the answers

    Which of the following is a typical third stage in the product development process?

    <p>Pre-technical evaluation (B)</p> Signup and view all the answers

    What is the main benefit of conducting a pre-technical evaluation?

    <p>To select a final set of concepts for development (B)</p> Signup and view all the answers

    During which step should feedback be actively sought and analyzed?

    <p>Work the transition (A)</p> Signup and view all the answers

    Which type of approach is more commonly adopted by firms that prefer to start with opportunity identification?

    <p>Market-pull approach (A)</p> Signup and view all the answers

    What may result from faulty research in product development?

    <p>Skewed findings (A)</p> Signup and view all the answers

    What aspect of customers is often overlooked in product development?

    <p>Concern for overall needs (A)</p> Signup and view all the answers

    How does the fourth-generation product development process improve project selection?

    <p>Incorporates go/kill decision points (B)</p> Signup and view all the answers

    During which step is it essential to train management and participating players?

    <p>Effect change (A)</p> Signup and view all the answers

    What is often a consequence of not clarifying decision-making roles?

    <p>Confusion and conflict (D)</p> Signup and view all the answers

    What is a strategy primarily characterized as?

    <p>A game plan to achieve business goals (C)</p> Signup and view all the answers

    What do tactics refer to in a business context?

    <p>Programs implemented to execute strategies (C)</p> Signup and view all the answers

    What does new product strategy encompass?

    <p>Various types of new products across different markets (B)</p> Signup and view all the answers

    How do current markets relate to customer segmentation?

    <p>They include existing customers and potential customers within the target segment. (D)</p> Signup and view all the answers

    What is indicated by the term 'new technology' in the context of product development?

    <p>Technology the company must acquire or create (C)</p> Signup and view all the answers

    What characterizes a market penetration strategy?

    <p>An objective to increase market share and usage within the current customer base (B)</p> Signup and view all the answers

    Which of the following best describes the role of customer satisfaction ratings?

    <p>They reflect the overall health of customer relations and strategy effectiveness. (A)</p> Signup and view all the answers

    What is a potential misconception about new product development?

    <p>New products are always major breakthroughs in the market. (B)</p> Signup and view all the answers

    What is the main characteristic of a market penetration strategy?

    <p>Attracting customers through cost reductions and product improvements (A)</p> Signup and view all the answers

    What best describes a product development strategy?

    <p>Capitalizing on new technology to offer more options to existing customers (A)</p> Signup and view all the answers

    Which of the following is a characteristic of a market development strategy?

    <p>Targeting new markets with existing products (B)</p> Signup and view all the answers

    What is typically associated with a diversification strategy?

    <p>Exploring new customer markets, often unrelated to current business (D)</p> Signup and view all the answers

    How does a company utilize line extensions in product development?

    <p>By incorporating new technologies into existing product lines (B)</p> Signup and view all the answers

    In the product development process, which is a noted issue?

    <p>It has historically been haphazard and unstructured (A)</p> Signup and view all the answers

    What is NOT a goal of the market penetration strategy?

    <p>Expanding into new international markets (A)</p> Signup and view all the answers

    What typically motivates diversification in a business strategy?

    <p>Expanding into both new customer segments and product technologies (C)</p> Signup and view all the answers

    What is the primary benefit of a systematic product development process?

    <p>Increases the likelihood of new product success (B)</p> Signup and view all the answers

    Which statement best describes the strategy-driven product development approach?

    <p>It aligns product development with the company's objectives and goals. (A)</p> Signup and view all the answers

    How does idea-directed product development differ from strategy-driven product development?

    <p>It can be either systematic or unstructured. (C)</p> Signup and view all the answers

    What is a critical downside of using a technology-push approach in product development?

    <p>It requires extensive post-development marketing work. (C)</p> Signup and view all the answers

    Which approach prioritizes customer needs in product development?

    <p>Market-pull (C)</p> Signup and view all the answers

    According to the research mentioned, what proportion of companies now use a formal product development process?

    <p>Two out of three companies (A)</p> Signup and view all the answers

    What is a common feature of market-pull product development?

    <p>It begins with analyzing the marketplace. (C)</p> Signup and view all the answers

    What is a potential advantage of employing a systematic approach to product development?

    <p>It minimizes risks associated with product failure. (C)</p> Signup and view all the answers

    Flashcards

    PACE Process

    A product development process focusing on speed to market, paralleling the stage-gate process.

    Fourth-Generation Product Development

    A product development process with a discovery stage at the beginning to generate breakthrough ideas, improve project selection using go/kill decisions.

    Concept Generation vs. Opportunity Identification

    Different approaches to starting product development; one starts with ideas, the other with market needs.

    Idea-Directed Companies

    Companies prioritizing concept generation. They start with many ideas and refine.

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    Market-Pull Approach

    Companies following market demand to prioritize product development. Begin with market research.

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    Pre-Technical Evaluation

    The third stage in product development; evaluating and prioritizing product concepts before investing in technical development.

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    Product Protocols

    Detailed guidelines that define a product concept and its development path.

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    Technical Development

    The stage where formal product development begins, following pre-technical evaluation.

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    Product Development Stages

    A series of steps to create and launch a product, including technology testing, business planning, and market launch.

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    Technology Realization/Testing

    Ensuring the product's technology functions as intended and complies with specifications.

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    Business Plan/Market Viability

    Evaluating the profit potential of a product to determine if it's worth further development.

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    Product Launch Stage

    Activities for market acceptance, including testing, preparation, release, and post-launch monitoring.

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    Product Life Cycle Management

    Continuing monitoring, refining, or upgrading a product to stay current with consumer demand and competition.

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    Product Development Process Attributes

    Characteristics of a good product development process including checkpoints, flexibility, crucial points handling, and team integration.

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    Process Checkpoints

    Points during development where progress is assessed and adjustments are made.

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    Product Launch Success Criteria

    Standards for judging a launch's success, such as high sales and profitability

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    Product Development Process Challenges

    Issues like over-reliance on the product, lack of customer focus, flawed research, and failing to meet all customer needs during product development.

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    O'Connor's 5-Step Process

    A five-step approach to implementing a product development process: Lay the foundation, Gain initial commitment, Effect change, Work the transition, and Monitor and improve.

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    Process Optimization

    Focusing on making a product development process as efficient and effective (or as good as possible) even if it's not perfect.

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    Top Management Commitment

    Essential for a product development process to succeed; without it, the process won't last.

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    Structured Decision-Making

    Clear roles and responsibilities for decision-making to avoid confusion and conflict during product development.

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    Implementation Plan

    A detailed plan outlining the steps for putting a product development process into action.

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    Process Validation

    Ensuring that the implemented product development process works as intended, despite any initial imperfections.

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    Sustained Participation

    Constant involvement of all people participating in the process, important for long-term process development.

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    New Product Strategy

    A broader approach to new products considering different market types (existing or new) and technology (existing or new).

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    Market Penetration Strategy

    A strategy to increase market share or usage among existing customers using existing technology.

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    New Markets

    Customer groups not previously served by the company.

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    New Technology

    Technology that a company needs to acquire or create.

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    Strategy

    A game plan to achieve a business goal.

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    Program

    A tactic to execute a strategy, possibly multiple tactics combined.

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    2012 sales increase

    A 10% increase in sales in 2012.

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    Customer Satisfaction

    A 5% increase in customer satisfaction ratings by year-end.

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    Market Penetration Strategy

    A strategy focusing on attracting or retaining customers by lowering prices or improving product attributes.

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    Product Development Strategy

    A strategy to capitalize on new product technologies for existing customers.

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    Line Extension

    Adding new products to an existing product line using new technologies.

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    Market Development Strategy

    Expanding sales volume of existing products into new markets.

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    Diversification Strategy

    Expanding into new markets and product technologies, either related or unrelated to current business.

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    New Product Development Process

    The process for creating new products, historically haphazard and unstructured.

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    Cost Reduction

    A strategy to lower the cost of a product while maintaining or improving quality.

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    Product Improvement

    A product attribute or feature added/improved to attract/retain customers through higher quality, better features.

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    Systematic Product Development

    A structured approach to product development that typically results in a higher likelihood of success. It includes careful planning and evaluation of ideas/needs.

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    Strategy-Driven Development

    Product development focused on achieving specific business objectives. It starts with goals and creates a path to achieve them.

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    Idea-Directed Development

    Product development based on a new idea. Can be systematic (research based) or unstructured (quick implementation).

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    Market-Pull Development

    Product development driven by customer needs and market demands. Focus is on understanding consumer wants to create needed products.

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    Technology-Push Development

    Product development driven by the creation of new technology. Focus is on implementing a new technology, hoping to find a market for it.

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    New Product Success

    A successful product launch that meets market needs, brings in good profit and maintains market position.

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    Systematic Approach (Product Success)

    A product development process using strategies and market analysis for a greater chance of successful product launch.

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    Market Analysis (Product Development)

    Thorough research to understand the market, identifying consumer needs, wants, and competitor analysis.

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    Study Notes

    Product Planning Strategy and Process

    • Product planning strategy and process is a chapter 3 topic.
    • The strategic planning process follows a pyramid structure, with the mission at the top, followed by objectives, goals, strategies, and finally, programs/tactics.
    • Objectives, derived from the mission, are specific elements to be achieved by the company. Examples include: becoming the market leader, recognized leader in innovation, being profitable, increasing sales, and providing outstanding customer service.
    • Goals are measurable, time-specific metrics by which objective attainment is gauged. They're narrower and more precise than objectives. An example is "50 percent of company revenue will come from new products introduced within the past three years."
    • Strategies define how goals will be achieved, which is like a game plan.
    • Programs/Tactics explain how individual strategies will be executed. Multiple tactics can work together under one strategy. An example is a strategy of increased innovation requires resources/training for R&D personnel.
    • New product strategy is not limited to new initiatives but is a broader concept, encompassing types of markets (new or current) and technology (current or new).

    Strategic Planning Process Details

    • Mission: Defines the company's central purpose, direction, and scope. Google's mission is to organize the world's information and make it universally accessible and useful. Nike's mission is to bring inspiration and innovation to every athlete in the world.
    • Objectives: Specific elements to be achieved by the company. Example objectives include becoming the market leader. being a recognized leader in innovation, and being profitable.
    • Goals: Measurable, time-specific metrics used to define the attainment of an objective. Goals should be quantifiable, helping gauge progress towards a business objective. Examples of marketing goals include a minimum unit sales volume, percentage increase in sales, customer satisfaction, and new product launches.
    • Strategies: Game plan for realizing objectives. Strategies outline how businesses will achieve specific goals.
    • Programs/Tactics: How individual strategies are carried out. Multiple tactics may be used to support a specific strategy.

    New Product Strategy

    • A misnomer when product planning assumes that all new products necessarily represent significant changes or major initiatives. New product strategy is broader than immediate customers. It includes current customers, competitor customers, and potential customers.
    • New Strategy Types - different types of markets (current or new) and technology.

    Product Technology Matrix

    • The product/market matrix is a tool for product strategy decisions. The matrix uses four possible product and market strategy scenarios.
    • Market Penetration (improving an existing product/service for the existing market).
    • Market Development (selling existing products/services to new markets)
    • Product Development (creating a new product/service for an existing market)
    • Diversification (creating new products/services for new markets).

    Product Development Process

    • Stage-Gate or phase-review product development process. Another form of this process is called the PACE process.
    • The Product Development Institute offers a model for fourth-generation product development process. It adds a discovery stage at the start to increase the chances of successful breakthrough products and improve project selection.
    • Transfer technology, meet technical & market needs, manage operations, implement company strategy, and manage internal control.

    Common Product Development Process Issues

    • Challenges in the product development process:
    • Process optimization and validation: Achieving the optimal process may be impossible, and a workable process might be just as effective.
    • Top management commitment and involvement are necessary to sustain the process.
    • Training critical skills and knowledge are essential for the process.
    • Cross-functional communication and collaboration are necessary for product development.
    • Product development process should be structured with checkpoints or gates, as well as being flexible to accommodate change.
    • Errors (lack of customer focus, flawed research, or meeting only some needs).

    Implementing a New Product Development Process

    • Five steps for implementing a new product development process, laid out in 1994:
    • Establish the need.
    • Gain commitment.
    • Effect change.
    • Work the transition.
    • Monitor and improve.

    Case Discussion

    • A case study on a particular computer component manufacturing company (estimated at $250M per year) has problems getting their new brain wave-activated mouse (no wires) accepted by their existing customer base (OEMs). The new product appears revolutionary, but it lacks widespread market demand, and customers are not willing to pay a premium.

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    Product Planning Strategy and Process PDF

    Description

    This quiz focuses on Chapter 3 of the product planning strategy and process. Understand the pyramid structure of strategic planning, including the distinction between missions, objectives, goals, strategies, and programs/tactics. Test your knowledge on how these elements work together to achieve company success.

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