7.4 Key Terms

Adaptation: Changing, of the product to meet the needs of the local culture is necessary. Although it is much less expensive to standardize products and promotional strategies, cultural and environmental differences usually require some adaptation. 7.2

Alpha Testing: During the testing stage, the offering is tested, first in the lab and then with real customers. 7.1

Beta Testing: Actual customers make sure the offering works under real-world conditions. 7.1

Concept Testing: Involves running the idea of the offering by potential consumers. 7.1

Decline Stage: When sales of the product decrease and continue to drop to lower levels. 7.2

Depth Interviews: Individuals are presented with the concept and can react to it individually. 7.1

Divesting: Dropping or deleting the product from its offerings. 7.2

Downsize: (Or decrease) the package sizes of their products or the amount of the product in the packages to save money and keep prices from rising too much. 7.2

Financial Feasibility: If the product’s costs cannot be controlled when it’s being made or serviced, the firm’s financial goals won’t be met. 7.1

Focus Groups: Groups of eight to twelve consumers gather and react to the concept. 7.1

Harvesting: The product entails gradually reducing all costs spent on it, including investments made in the product and marketing costs. By reducing these costs, the company hopes that the profits from the product will increase until their inventory runs out. 7.2

Growth Stage: If a product is accepted by the marketplace, it enters the growth stage of the product life cycle. The growth stage is characterized by increasing sales, more competitors, and higher profits. 7.2

Introduction Stage: The first stage in a product’s life cycle. 7.2

Investment Risk: The possibility that the company will fail to earn the appropriate return on the money and effort (the investment) it puts into the new product. 7.1

Line Extension: It occurs when a company comes out with another model (related product) based on the same platform and brand as one of its other products. 7.1

Lead Users: Customers who are good at generating new product ideas or applications of products. 7.1

Market Test: Some companies test the complete launch of a product’s marketing plan to ensure that it reaches buyers, gets positive feedback, and generates sales of the product or service.7.1

Maturity Stage: After many competitors enter the market and the number of potential new customers declines, the sales of a product typically begin to level off. 7.2

Opportunity Risk: The risk that there is a better idea that gets ignored because the firm has invested in the idea at hand. 7.1

Penetration Pricing Strategy: Involves using a low initial price to encourage many customers to try a product. 7.2

Process Feasibility: The degree to which the company can actually make and service the product. 7.1

Product life Cycle (PLC): The stages the product goes through after development, from introduction to the end of the product. 7.2

Quality Function Deployment (QFD): A process whereby a company begins with the customer’s desired benefits and then designs an offering that delivers those benefits. 7.1

Rolling Launch: Offering is made available to certain markets first and then other markets later. 7.1

Skimming Pricing Strategy: Involves setting a high initial price for a product, to more quickly recoup the investment related to its development and marketing. 7.2

Standardized: If an organization wants to maintain strong centralized control and uniformity in its products and marketing activities, it is choosing a strategy called standardization. 7.2