BUAD 301 Review Exam 3

BUAD 301 Review Exam 3 - BUAD 301 Review Exam 3 Lecture 11:...

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BUAD 301 Review Exam 3 Lecture 11: New Product Development and Product Life Cycle New product development: through research and development efforts, the development of new brands, product modifications, product improvements, and original products. o New product development process: Idea generation: the systematic search for new product ideas; a company typically has to generate many ideas to get a few good ones Idea screening: screening new product ideas in order to spot good ideas and drop poor ones as soon as possible Concept development and testing: testing new product concepts with a group of target consumers to find out if the concepts have strong consumer appeal Marketing strategy development: designing an initial marketing strategy for a new product based on the product concept Business analysis: a review of les, costs, and profit projections for a new product to find out whether these factors satisfy the company’s objectives Product development: developing the product concept into a physical product in order to ensure that the product idea can be turned into a workable product Test marketing: the stage of new product development in which the product and marketing program are tested in more realistic market settings Standard: conducting a full marketing campaign in a test city Controlled: controlled panels of stores that agree to carry new products for a fee and track individual customer behavior Simulated: showing a group of test consumers advertisements and finding out which product they would buy Commercialization: (timing, geography, target market segment) Product Life Cycle o Can be applied to a product class (soda), product form (diet soda), or brand (Sprite) o PLC Stages Product Development: the company develops a new idea, sales are zero, investment costs are high, profits are negative
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Introduction: low sales, high cost per customer acquired, negative profits, innovators are targeted, little competition. Strategy: basic product, use cost-plus basis pricing, build selective distribution, build awareness among early adopters Growth: rapidly rising sales, average cost per customer, rising profits, early adopters are targeted, growing competition. Strategy: offer product extensions, use penetration pricing, intensive distribution, build awareness and interest Maturity: sales peak, low cost per customer, high profits, early and late majority are targeted, competition begins to decline. Strategy: diversify brand, match competitions price, intensive distribution, stress benefits and brand differences. Lasts longer than previous stages, poses more marketing challenges, most products sold today are in maturity stage. Decline: declining sales, low cost per customer, declining profits, target laggards,
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This note was uploaded on 04/22/2008 for the course BUAD 301 taught by Professor Mcnutt during the Fall '08 term at University of Delaware.

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BUAD 301 Review Exam 3 - BUAD 301 Review Exam 3 Lecture 11:...

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