MARK1012 Lecture Notes - Lecture 7: Voice Of The Customer, Observability, Test Market
Chapter 9 – Developing New Products
Ansoff Matrix: Product/market expansion grid
Changing Customer Needs – firms create & deliver value more effectively by satisfying
changing needs or current & new customers
Market Saturation – longer a product exists in marketplace, more likely it is that the
market will become saturated (value of firm ultimately declines)
Managing Risk through Diversity – broader portfolio of products helps diversify risk &
enhance firm value
• Easier to withstand external shocks
Fashion Cycles – in industries reliant on trends & short product life cycles (apparel,
books, software markets) most sales come from new products
Improving Business Relationships – not always targeted at consumers
• Improving relationships with suppliers & intermediaries to enhance value creation
Diffusion of Innovation
Process by which use of an innovation spreads throughout a market group, over time &
across various categories of adopters
• Helps understand rate at which consumers are likely to adopt a new product
Pioneers/breakthroughs – new products (radical innovations) that establish a
completely new market or change rules of completion/ consumer preferences
• First movers – readily recognizable to consumers (early market share lead)
Innovators (2.5%) – buyers who want to be first to have new product
• Enjoy taking risks & regarded as being highly knowledgeable
• Help product gain market acceptance
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