Podcast
Questions and Answers
What is the primary purpose of generating new product ideas?
What is the primary purpose of generating new product ideas?
Which of the following is NOT mentioned as a source of new product ideas?
Which of the following is NOT mentioned as a source of new product ideas?
What should be considered when testing new product ideas?
What should be considered when testing new product ideas?
How can companies gather feedback on a new product idea?
How can companies gather feedback on a new product idea?
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What is the main goal of test-marketing a new product?
What is the main goal of test-marketing a new product?
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Which method is commonly used to test consumer goods?
Which method is commonly used to test consumer goods?
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What question should a company ask regarding a new product idea that falls outside its expertise?
What question should a company ask regarding a new product idea that falls outside its expertise?
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Why might customer feedback not always yield good product ideas?
Why might customer feedback not always yield good product ideas?
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What is the primary goal of alpha testing in the product development process?
What is the primary goal of alpha testing in the product development process?
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Which method involves providing consumers with a product at no cost to evaluate their satisfaction?
Which method involves providing consumers with a product at no cost to evaluate their satisfaction?
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In controlled test marketing, what is primarily measured to evaluate product performance?
In controlled test marketing, what is primarily measured to evaluate product performance?
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What distinguishes beta testing from alpha testing?
What distinguishes beta testing from alpha testing?
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Which of the following is NOT a method of test marketing mentioned?
Which of the following is NOT a method of test marketing mentioned?
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What is the main focus of simulated test marketing?
What is the main focus of simulated test marketing?
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Which test marketing method involves a selective group of consumers trying the product in authentic settings?
Which test marketing method involves a selective group of consumers trying the product in authentic settings?
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What is the primary purpose of test-marketing business products?
What is the primary purpose of test-marketing business products?
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What phase in the product life cycle is indicated if the product is experiencing increased sales and market penetration?
What phase in the product life cycle is indicated if the product is experiencing increased sales and market penetration?
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Which aspect of the product profile focuses on the unique aspects that distinguish the product from competitors?
Which aspect of the product profile focuses on the unique aspects that distinguish the product from competitors?
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What is the primary purpose of having a breakeven selling point in the product profile?
What is the primary purpose of having a breakeven selling point in the product profile?
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Which strategy involves calculating costs, competition, and customer demand to set the product's price?
Which strategy involves calculating costs, competition, and customer demand to set the product's price?
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What role does the publicity manager play in the product profile?
What role does the publicity manager play in the product profile?
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What is a primary reason for observing interest during trade shows?
What is a primary reason for observing interest during trade shows?
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What should firms do if the test-market results are positive?
What should firms do if the test-market results are positive?
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What is suggested if the concept of the product fails to have a good strategic fit?
What is suggested if the concept of the product fails to have a good strategic fit?
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During which stage should a firm decide whether to manufacture and distribute the product?
During which stage should a firm decide whether to manufacture and distribute the product?
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What action should be taken if profitability remains poor at the final stage?
What action should be taken if profitability remains poor at the final stage?
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What might a company offer to testers during product trials?
What might a company offer to testers during product trials?
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What is the first step in the decision process to develop and test new products?
What is the first step in the decision process to develop and test new products?
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Which outcome indicates that the product should be dropped during the development process?
Which outcome indicates that the product should be dropped during the development process?
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What is a primary reason companies need to develop new products or services?
What is a primary reason companies need to develop new products or services?
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What percentage of recently launched products are no longer available in the market?
What percentage of recently launched products are no longer available in the market?
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Which step is essential before introducing a new product to the market?
Which step is essential before introducing a new product to the market?
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Why are companies under pressure to constantly innovate?
Why are companies under pressure to constantly innovate?
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What is one of the key components of the business decision-making process in product development?
What is one of the key components of the business decision-making process in product development?
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What can lead to the failure of new products aside from high development costs?
What can lead to the failure of new products aside from high development costs?
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How important is consumer choice in the context of developing new products?
How important is consumer choice in the context of developing new products?
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What aspect of product life is important for companies to consider?
What aspect of product life is important for companies to consider?
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Study Notes
Unit V: Developing New Products
- General Objective: Learners will understand the business decision-making process for developing and testing products/services for the target market.
- Specific Objectives: Students should be able to generate new product ideas, and understand the test-marketing process for new product introductions.
Overview
- Companies frequently develop new products and services to meet evolving consumer needs, increase sales, and compete effectively.
- Consumer preferences, product lifecycles (which eventually become outdated), and competitor actions all encourage new offerings.
- New product launches face high failure rates (approximately 80%). Factors impacting success include development costs exceeding projections, intensified competition, and unforeseen challenges.
Generating New Product Ideas
- To generate ideas, companies should ask customers about needs and desires, including areas of dissatisfaction.
- Customer input is not always sufficient since consumers may not be aware of all product/services possibilities or have difficulty articulating their needs.
- Companies should also consider their employees, industry consultants, and market research for new product ideas.
Testing New Product Ideas
- Firms should ensure new product ideas align with company strategy and resources before proceeding.
- Product ideas should be tested with target consumers, often through focus groups, questionnaires, or prototypes.
- Physical models or computer-aided design tools can illustrate new products.
Test-Marketing New Products
- Test-marketing involves evaluating a product's technical and commercial viability before its full launch.
- Testing is performed on both consumer and business goods.
- Test-marketing methods range from least to most costly, including identifying and testing the product with sample consumers.
Test-Marketing Consumer Products
- Sales Wave: Offering a product at varying prices to assess consumer interest/demand.
- Simulated Test Marketing: Showing potential consumers ads/commercials including product options and assessing purchasing decisions under simulated store settings.
- Controlled Test Marketing: Deploying products in selected stores and locations to measure sales performance in specific markets.
- Full-Scale Test Marketing: Utilizing complete advertising and marketing campaigns to assess product sales performance across a wider geographical area (e.g., multiple cities).
Test-Marketing Business Products
- Alpha Testing: Initial testing of product units with key customers (often accompanied by a company representative) to gather insights into product functionality and features.
- Beta Testing: Further testing of product units with a broader group of customers (more so than alpha testing), specifically as the product nears its final form.
Product Development Process
- A flowchart/figure demonstrates a typical product development process, beginning with the generation of ideas, followed by concept development, a marketing plan, and concluding with market testing to gauge success.
- The figure emphasizes the critical factors between each step (Idea Generation, Concept Development, Product Marketing Plan, Market Testing, Rollout, Profitability).
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Description
This quiz explores the key concepts of product development in a business context. Students will learn how to generate new product ideas and understand the importance of the test-marketing process. With a focus on consumer needs and competitive strategies, this quiz is essential for anyone studying business or marketing.
