innovation
the process by which ideas are transformed into new products and services that will help firms grow
diffusion of innovation
the process by which the use of an innovation, whether a product or service, spreads through a market group over time and over various categories of adaptors
pioneers( breakthroughs)
new product introductions that establish a completely new market or radically change both the rules of competition and preferences in market
first movers
product pioneers that are the first to create a market or product category
innovators
those buyers who want to be he first to have a new product or service
early adopters
the second group of consumers in the diffusion of innovation model, after innovators, to use a product or service innovation; generally don't like to take as much risk as innovators but instead wait and purchase the product after careful review
early majority
a group of consumers in the diffusion of innovation model that represents approximately 34 percent of the population members dont like to take much risk and therefore tend to wait until bugs are worked out of a particular product or service; few new produ
late majority
the last group of buyers to enter a new product market; when they do the product has achieved its full market potential
laggards
consumers who like to avoid change and rely on traditional products until they are no longer available
reverse engineering
involves taking apart a competitor's product, analyzing i, and creating an improved product that does not infringe on the competitors patents, if any exist
lead users
innovative product users who modify existing products according to their own ideas to suit their specific needs
concepts
brief written descriptions of a product or service; its technology, working principles, and what customer needs in would satify
concept testing
the process in which a concept statement that describes a product or service is presented to potential buyers or users to obtain their reactions
product development
also called product design; entails a process of balancing various engineering, manufacturing, marketing, and economic considerations to develop a products form and features or a service's features
prototype
the first physical form or service description of a new product still in rough or tentative form, that has the same properties as the new product but is produces through different manufacturing processes, sometimes even crafted individually
alpha testing
an attempt by the firm to determine whether a product will perform according to its design and whether it satisfies the need for which it was intended; occurs in the firm's research and development dept.
beta testing
having potential consumers examine a product prototype in a real-use setting to determine its functionality, performance, potential problems, and other issues specific to its use
premarket test
conducted before a product or service is brought to market to determine how many customers will try and then continue to use it
test marketing
introduces a new product or service to a limited geographical area (usually a few cities) prior to national launch
trade promotions
advertising to wholesalers or retailers to get them to purchase new products often through special pricing incentives
introductory price promotions
short term price discounts designed to encourage trial
trade show
major events attended by buyers who choose to be exposed to products and services offered by potential suppliers in an industry
manufacturer's suggested retail price
(MSRP) the price manufacturers suggest retailers use to sell their merchandise
slotting allowance
fees firms pay to retailers simply to get new products into stores or to gain more or better shelf space for their products
product life cycle
defines the stages that a new products move through as they enter, get established in, and ultimately leave the market place and thereby offers marketers a starting point for their strategy planning
introduction stage
stage of the life cycle when innovators start buying the product
growth stage
stage of the product life cycle when the product gains acceptance, demand and sales increase, and competitors emerge in the product category
maturity stage
stage of the product life cycle when industry sales reach their peak, so firms try to rejuvenate their products by adding new features or repositioning them
decline
stage of the product life cycle when sales decline and the product eventually exits the market