When developing a new product which of the following questions might you ask during evaluation?

The following questions are asked during the business analysis stage:oWhat is the likely demand for the product?oWhat impact would the new product have on total sales, profits, market share, and returnon investment?oHow would the introduction of a new product affect existing products? Would the newproduct cannibalize existing products?oWould current customers benefit from the product?oWould the product enhance the image of the company’s overall product mix?oWould the new product affect current employees, such as hiring more people or reducingthe size of the workforce?oWhat new facilities would be needed?oHow might competitors respond?oWhat is the risk of failure? Is the company willing to take the risk?Step 3: Idea Evaluation

In the idea evaluation stage, the product ideas that survive the screening process are scrutinizedmore carefully.Concept testing: getting reactions from customers about how well a new product idea fits theirneeds.oInformal studies may include focus groups of customers who are asked to react tovarious aspects of the product idea.oMore formal studies may involve surveys in which consumers rate different dimensions ofthe product idea.In the idea evaluation stage, companies often make rough estimates of costs, revenue, andprofitability.oThey do so based on the reactions of final consumers, wholesalers, and retailers.Step 4: DevelopmentIn the development stage, the product idea is translated into a tangible prototype, in the case of aphysical good.

oFor a service, the organization works out the details of the training, equipment, and staffrequired to deliver the service.Technology has had a big impact on the development of physical products, mainly in the use ofcomputer-aided design (CAD) software.Once marketers have product and service prototypes, they often get consumer reactions to thembefore expending the resources needed for a full production run.Marketers may conduct test marketing, which is in essence a “dry run” of a new productintroduction, bringing the full marketing mix into play in selected geographic areas.oTest marketing is costly and time-consuming, and it may also provide information tocompetitors.Sometimes, the risk of not having the information gathered in a test market is greater than the riskfrom “tipping one’s hand” to competitors.oAnd, in some cases, the advantages of getting to the market quickly outweigh theadvantages gained from a time-consuming test market.Step 5: CommercializationA product that survives the first four stages of the new-product development process is ready forcommercialization -- introduction to the full target market.Commercializing a new product is expensive and success usually requires cooperation from thewhole organization.o1. Manufacturing or service facilities are established.o2. Goods are produced in order to fill channels of distribution.o3. Service personnel must be hired and trained.o4. Introductory promotion is executed.Due to the cost and complexity of a product rollout, some companies prefer to do it gradually,perhaps by geographic area, until the whole market is covered.oThis approach may give the marketing staff an opportunity to recognize and correctmarketing mix problems before they appear in all areas.Commercialization

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