Chapter 07 - New Product Planning and Development
Guarantee: An assurance by the producer that the product is as represented and will perform
properly. If not, the organization making the guarantee replaces the product or refunds the
Idea generation: Stage of the new product development process at which the goal is to ensure
that all new product ideas considered by the organization have the opportunity to be heard and
evaluated because the success of the process will depend greatly on the quality of the ideas
Idea screening: Evaluation of an idea based on strategic risk, market risk, and internal risk for
the purpose of eliminating ideas that could not be profitably marketed and expanding viable
ideas into full product concepts.
Market development: A strategy that seeks to find new customers for existing products. An
organization pursuing this strategy seeks to establish footholds in new markets or preempt
competition in emerging market segments.
Market penetration: A strategy that denotes a growth direction through the increase in market
share of present products in present markets. An organization pursuing this strategy hopes to
capitalize on existing markets and combat competitive entry or incursions.
New product development process: Stages include idea generation, idea screening, project
planning, product development, test marketing, commercialization.
Product development: A strategy that seeks to create new products to replace existing ones. An
organization pursuing this strategy hopes to capitalize on existing markets and combat
competitive entry or incursions.
Product development stage: Stage of the new product development process at which the
product idea has met all expectations and is considered a candidate for further research and
testing. In the laboratory, the product is converted into a finished good and tested.
Project planning: Stage of the new product development process at which the idea is evaluated
further and responsibility for the project is assigned to a project team. The idea is evaluated in
terms of production, marketing, financial, and competitive factors. A development budget is
established, and preliminary marketing and technical research is undertaken.
Rugby or relay: An approach to creating and managing product development teams that
involves groups in different areas of the organization working simultaneously on the project.
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