Final Exam Studynotes
Marketing Final Exam Study Notes
Chapter 8: Developing New Products
Product: anything that is of value to a consumer and can be offered through a marketing exchange
-goods, services, place, ideas, organizations, people, or communities all create value
Why do firms innovate?
Innovation: the process by which ideas and transformed into new products
1. changing customer needs
2. market saturation
3. managing risk through diversity: a product doing bad can be offset by a product doing good
4. fashion cycles: industries such as books, software, apparel depend on sales of new products
5. innovation and value: pioneers: new product introductions, new-to-word product add tremendous value to firms, establish completely new market, changes rules of competition and consumer preferences (ex. iPod, eBay’s auction model, Internet, BlackBerry, Intel microprocessor). Pioneers have the advantage of being first movers (readily recognizable to consumers and establishing an early market share lead. Many new products fail because they offer few benefits compared to existing products, take a substantial time to learn, and may be introduced in a bad timing. Even if they succeed, the product is adopted through the population in a process known as adoption of innovation
¬Adoption of Innovation
Diffusion of Innovation: the process by which the use of an innovation, whether a product or service, spreads throughout a market group over time and over various categories of adopters
Innovators: buyers who want to be the first to have the new product or service. They enjoy taking risks, have strong knowledge about the product/service, and are not price sensitive. Help the product gain market acceptance and help bring early adopters into the market through word of mouth, etc. For example, these would be the people who lineup for the midnight release of a new Harry Potter movie.
Early adopters: they don’t like to take as much risk as innovators, they
Chapter 8: Developing New Products
Product: anything that is of value to a consumer and can be offered through a marketing exchange
-goods, services, place, ideas, organizations, people, or communities all create value
Why do firms innovate?
Innovation: the process by which ideas and transformed into new products
1. changing customer needs
2. market saturation
3. managing risk through diversity: a product doing bad can be offset by a product doing good
4. fashion cycles: industries such as books, software, apparel depend on sales of new products
5. innovation and value: pioneers: new product introductions, new-to-word product add tremendous value to firms, establish completely new market, changes rules of competition and consumer preferences (ex. iPod, eBay’s auction model, Internet, BlackBerry, Intel microprocessor). Pioneers have the advantage of being first movers (readily recognizable to consumers and establishing an early market share lead. Many new products fail because they offer few benefits compared to existing products, take a substantial time to learn, and may be introduced in a bad timing. Even if they succeed, the product is adopted through the population in a process known as adoption of innovation
¬Adoption of Innovation
Diffusion of Innovation: the process by which the use of an innovation, whether a product or service, spreads throughout a market group over time and over various categories of adopters
Innovators: buyers who want to be the first to have the new product or service. They enjoy taking risks, have strong knowledge about the product/service, and are not price sensitive. Help the product gain market acceptance and help bring early adopters into the market through word of mouth, etc. For example, these would be the people who lineup for the midnight release of a new Harry Potter movie.
Early adopters: they don’t like to take as much risk as innovators, they