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Marketing Test #2

New Product Categories

New-to-the-world Products, New Product Lines, Additions to existing product lines, Improvements or revisions of existing products, repositioned products & Lower-priced products.

New-to-the-world Products

These products create an entirely new market and represent the smallest category of new products.

New Product Lines

These products allow the firm to enter an established market.

Additions to Existing Product Lines

New products that supplement a firm's established line.

Improvements or Revisions of Existing Products

A products that may be significantly or only slightly changed.

Repositioned Products

Existing products targeted at new markets or market segments, or ones repositioned to change the current market's perception of the product, which may be done to boost declining sales.

Lower-Priced Products

Products that provide performance similar to competing brands at a lower price.

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.

New-Product Development Process

1) New-product strategy 2) Idea generation 3) Idea screening 4) Business analysis 5) Development 6) Test marketing 7) Commercialization = New Product

Product Development

a marketing strategy that entails the creation of marketable new products; the process of converting applications for new technologies into marketable products.

Business Analysis

the second stage of the screening process where preliminary figures for demand, cost, sales, and profitability are calculated.

Test Marketing

the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation.


the decision to market a new product.


a product perceived as new by a potential adopter.

Diffusion Process

Innovators, Early Adopters, Early Majority, Late Majority & Laggards.


the first 2.5 percent of all those who adopt the product. Eager to try new ideas and products.

Early Adopters

the next 13.5 percent to adopt the product. Rely much more on group norms and values.

Early Majority

the next 34 percent to adopt. Weighs the pros and cons before adopting a new product. Likely to collect more information and evaluate more brands than early adopters.

Late Majority

the next 34 percent to adopt. Adopts a new product because most of their friends have already adopted it. Rely on group norms, their adoption stems from pressure to conform.


the final 16 percent to adopt. Do not rely on group norms. Their independence is rooted in their ties to tradition. The past heavily influences their decisions.

Product Characteristics / Adoption Rates

Complexity, Compatibility, Relative Advantage, Observability & Trialability.


the degree of difficulty involved in understanding and using a new product.


the degree to which the new product is consistent with existing values and product knowledge, past experiences, and current needs.

Relative Advantage

the degree to which a product is perceived as superior to existing substitutes.


the degree to which the benefits or other results of using the product can be observed by others and communicated to target customers.


the degree to which a product can be tried on a limited basis.

Product Life Cycle

Introductory Stage, Growth Stage, Maturity Stage & Decline Stage

Introductory Stage

the full-scale launch of a new product into the marketplace.

Growth Stage

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

a period during which sales increase at a decreasing rate.

Decline Stage

a long-run drop in sales.

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