CSUF MKTG 351 CHAPTER 11 KIM| 20 QUESTIONS AND ANSWERS|GUARANTEED SUCCESS

new-product strategy a plan that links the new-product development process with the objectives of the marketing department, the business unit, and the corporation brainstorming (Idea generation) the process of getting a group to think of unlimited ways to vary a product or solve a problem screening (Idea screen) the first filter in the product development process, which eliminates ideas that are inconsistent with the organization's new-product strategy or are obviously inappropriate for some other reason business analysis the second stage of the screening process where preliminary figures for demand, cost, sales, and profitability are calculated development the stage in the product development process in which a prototype is developed and a marketing strategy is outlined test marketing the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation commercialization the decision to market a product innovation a product perceived as new by a potential adopter diffusion the process by which the adoption of an innovation spreads Innovators The first 2.5 percent. they are eager to try new ideas and products, almost as an obsession. They have higher incomes, more worldly, and more active outside their community. they rely less on group norms and are more self-confident. becuase they are well educated they more likely to get their information from scientific sources and experts. they are venturesome. Early Adopters the next 13.5 percent. they adopt early in the production lifecycle. they rely much more on group norms and values. likely to be opinion leaders. They are a new products best friend because they create buzz and word of mouth advertising. Marketers focus most of their attention to identify the group. (the influencers) Influencers they come form all backgrounds. they talk to others about their experiences with goods and services. Early Majority the next 34 percent. they weigh the pros and cons before adopting a new product. they are likely to collect more information and evaluate more brands than early adopters. they rely on the group for information and unlikely to be opinion leaders themselves. Late Majority the next 34 percent. they adopt to new products because their friends and family have already done so. because they also rely on group norms, their adoption stems from pressure to conform. they tend to be older, and below average in income and education. they depend on word of mouth communication rather than on the mass media. Laggards the final 16 percent. they do not rely on norms. their independence is rooted in their ties to tradition. by the time laggards adopt an innovation, it has been replaced by another. they have the longest adoption time and the lowest socioeconomic status. marketers ignore laggards. introductory stage (product life cycle) the full-scale launch of a new product into the marketplace growth stage (product life cycle) the second stage of the product life cycle when sales typically grow at an increasing rate, many competitors enter the market, large companies may start to acquire small pioneering firms, and profits are healthy maturity stage (product life cycle) a period during which sales increase at a decreasing rate decline stage (product life cycle) a long-run drop in sales