Chapter 8: Product I: Innovation and New Product Development
IV. END-OF-CHAPTER ANSWER GUIDE
Chapter Questions and Activities
CONCEPTS: TEST YOUR KNOWLEDGE
8-1 What is a good? What are the differences between tangible and intangible products?
8-2 What is the difference between the core product, the actual product, and the augmented product?
8-3 What is the difference between a durable good and a nondurable good? What are the main differences
among convenience, shopping, and specialty products?
8-4 What is an unsought product? How do marketers make such products attractive to
consumers?
8-5 What types of products are bought and sold in B2B markets?
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Chapter 8: Product I: Innovation and New Product Development
8-6 What is a new product? Why is understanding new products so important to marketers? What are the types of
innovations?
The FTC says that a company can call its products new if:
The product is entirely new or changed significantly from the past.
8-7 What it R&D, and what is its importance to marketers and the product development process?
8.8 List and explain the steps marketers undergo to develop new products.
New product development has seven steps.
Idea Generation—where marketers use a variety of sources to come up with great new-product ideas
that will provide customer benefits and that are compatible with the company mission.
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Chapter 8: Product I: Innovation and New Product Development
8-9 What is a test market? What are some pros and cons of test markets?
In test marketing, the firm tries out the marketing plan in a limited area.
Test marketing can be very expensive, gives competition a look at the product and marketing plan,
and gives an indication of pricing strategy.
8-10 Explain the stages a consumer goes through in the adoption of a new product.
Awareness that the innovation exists
Interest in which the adopter begins to see how a new product might satisfy an existing or newly
realized need.
8-11 List and explain the categories of adopters.
The categories of adopters are:
Innovator—the first consumer to know about and to try an innovation.
8-12 What product factors affect the rate of adoption of innovations?
Relative advantage is the degree to which a consumer perceives that a new product provides
superior benefits.
ACTIVITIES: APPLY WHAT YOU’VE LEARNED
8-13 Creative Homework/Short Project Assume that you are employed in the marketing department of a firm
that is producing an electric scooter. In developing this product, you realize that it is important to provide a
core product, an actual product, and an augmented product that meets the needs of customers. Develop an
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Chapter 8: Product I: Innovation and New Product Development
outline of how your firm might provide these three product layers in the electric scooter.
MyMarketingLab for answers to Assisted Graded Questions
8-14 In Class, 10–25 Minutes for Teams Firms go to great lengths to develop new product ideas. Sometimes
new ideas come from brainstorming, in which groups of individuals get together and try to think of as
many different, novel, creative, and, it is hoped, profitable ideas for a new product as possible. With a
group of other students, participate in brainstorming for new product ideas for one of the following (or
some other product of your choice):
a. An exercise machine with some desirable new features
b. A combination shampoo and body wash
c. A new type of university
Then, with your class, screen one or more of the ideas for possible further product development.
8-15 In Class, 10–25 Minutes for Teams As an entrepreneur, you know that innovation will play a huge role in
your new business. With your team, brainstorm briefly to define what your new business will be—let the
sky be your limit. Then create a short outline that defines the various types of innovations—continuous,
dynamically continuous, and discontinuous—and give examples of each. Which innovation type would
be the easiest when starting out? Which innovation type brings the greatest reward? Which innovation
type ultimately makes the most sense for your new business?
8-16 Creative Homework/Short Project As a member of a new product team with your company, you are
working to develop an electric car jack that would make changing car tires easier. You are considering
conducting a test market for this new product. Outline the pros and cons for test marketing this product. What
are your recommendations?
MyMarketingLab for answers to Assisted Graded Questions
8-17 For Further Research (Individual) Every year, marketers come out with many new or new and improved
products. Using the web, research a new or new and improved product and summarize either how
marketers developed and tested that product before taking it to market or how they created awareness
about that new product once they developed it.
Using the web, students can research a new or new and improved product and summarize how marketers
developed and tested that product.
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Chapter 8: Product I: Innovation and New Product Development
8-18 Creative Homework/Short Project Select a company and identify an existing product sold by that
company that could potentially be further developed to meet new consumer needs. Using the selected product,
develop an approach to engage consumers in the process of value co-creation with the objective of developing a
new version of the selected product.
8-19 For Further Research (Individual) Select a recently successful product that you believe is innovative and
do some research on how the product was introduced. Using the adopter categories in the chapter, identify
adopters of the product that you consider to be innovators and provide evidence of specific behaviors and
characteristics that support the placement of these consumers within that adopter category.
8-20 For Further Research (Individual) Identify an innovative product that was just recently introduced into
the market and using the five characteristics that affect the rate of adoption (relative advantage, compatibility,
complexity, trialability, and observability) evaluate the product on each respective characteristic. Based on your
evaluation state whether you believe the innovation will be quickly adopted, slowly adopted, or adopted at a
rate somewhere in between. Use your best judgment in making this determination.
8-21 For Further Research (Individual) Sometimes products are massively successful because consumers find
a use for them separate from what the developing company initially envisioned. Find two products online that
fit this description and identify their initial intended use(s), then what other use(s) consumers
found for them, and nally whether companies adjusted their marketing efforts around
the products after becoming aware of how consumers were actually using the products.
Using the web, students can research a new or new and improved product and summarize how marketers
developed the new use for an existing product.
APPLYING MARKETING METRICS
In the chapter, we define creativity and discuss how it relates to innovation. Innovation can be measured in
terms of number of successful new products as well as a variety of secondary measures related to those
products (e.g., new product launches per year, per employee, and success rate versus failure rate—cast on the
basis of how the firm defines product success and failure). Innovation is fueled by R&D expenditures, as the
chapter notes.
But what about measuring creativity itself? Some experts have argued that an overfocus on metrics can kill
creativity. They might argue that the phrase “creativity metric” is an oxymoron. There’s always been a
right-brain/left-brain argument that marketing, to be optimally successful, has to nurture both the creative and
the analytical. Has the obsession with marketing metrics over the past decade squelched essential creativity
emanating from the right brain?
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Chapter 8: Product I: Innovation and New Product Development
8-22 What is your viewpoint about measuring creativity? Do you believe it is more constructive or damaging to
organizational innovation? Support your opinions.
Creativity describes a process that results in something new. Creative outcomes can take on many forms, but
most often we experience them as something we can see, hear, smell, touch, or taste. The outcome can be most
anything—an idea, a joke, an artistic or literary work, a painting or musical composition, a novel solution to a
8-23 Point out a few well-known organizations that you believe are quite creative. How do you know that they are
creative—that is, what specific evidence can you cite that indicates that a high level of creativity is practiced?
This question asks students to review what they have learned about creativity, the types of creativity and their
impact on society, and consider how new products are introduced and adopted into mainstream society.
CHOICES: WHAT DO YOU THINK?
8-24 Critical Thinking Technology is moving at an ever-increasing speed, and this means that new products enter
and leave the market faster than ever. What are some products you think technology might be able to
develop in the future that you would like? Do you think these products could add to a company’s profits?
8-25 Critical Thinking In this chapter, we talked about the core product, the actual product, and the augmented
product. Does this mean that marketers are simply trying to make products that are really the same seem
different? When marketers understand these three layers of the product and develop products with this
concept in mind, what are the benefits to consumers? What are the hazards of this type of thinking?
Marketers have known for some time that consumers see products differently and purchase for different reasons
and to fulfill different needs. When marketers look at the three different dimensions of the product as described
above, they are attempting to find sets of needs that to which consumers will respond. To some consumers, the
core product is a sufficient reason to purchase (fulfill the hunger drive by eating a steak). To others, it is the
actual product (a steak bought at their favorite steakhouse is what they really want). Still others want the
“sizzle” or the augmented product (they not only want the steak but they want the entertainment and the
atmosphere that might be present at their favorite steakhouse, or the guarantee of satisfaction).
The marketer is generally trying to find mechanisms to satisfy all of customers’ needs when this approach is
used. However, if the marketer does not concentrate on the proper need level, the consumer may not respond.
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Chapter 8: Product I: Innovation and New Product Development
For example (using the analogy above) if the marketer talks about the quality of the meat in a steak, but the
consumer is looking for a romantic setting, the consumer may make their purchase elsewhere.
8-26 Critical Thinking Discontinuous innovations are totally new products—something seldom seen in the
marketplace. What are some examples of discontinuous innovations introduced in the past 50 years? Why are
there so few discontinuous innovations? What products have companies recently introduced that you believe
will end up being regarded as discontinuous innovations?
MyMarketingLab for answers to Assisted Graded Questions
8-27 Ethics For several decades, consumer products—everything from vaccines to cosmetics—have been tested
on animals. Do you think product testing on animals should be legal or illegal? Does
your position change depending on what kind of animal the product is tested on (e.g., a mouse versus dog)?
What are some instances of when it would be acceptable or unacceptable to test products on animals (e.g.,
medical necessity versus enhancing one’s looks)?
MyMarketingLab for answers to Assisted Graded Questions
8-28 Ethics. Should a company opt to manufacture a product with a cheaper component if it knows that its inclusion
will moderately increase the physical safety risk of the product for consumers? What if it is known that the
increase in cost of using the more expensive and safer component will lead to about a 50 percent lower
adoption rate for the product by consumers, does it become more justifiable to do so then?
8-29 Critical Thinking Consider the differences in marketing to consumer markets versus business markets. Which
aspects of the processes of product adoption and diffusion apply to both markets? Which aspects are unique to
one or the other? Provide evidence of your findings.
Have the students review the differences in marketing to consumers and business markets. Product adoption
is the process by which an individual begins to buy and use a new product, whereas, the diffusion of
innovations is how a new product spreads throughout a population. The stages of the adoption process are
awareness, interest, trail, adoption and confirmation. To understand the diffusion process, marketers classify
consumers according to their readiness to adopt new products as innovations, early adopters, early majority,
late majority and laggards.
8-30 Ethics In this chapter, we explained that knockoffs are slightly modified copies of original product designs. Should
knockoffs be illegal? Who is hurt by knockoffs? Is the marketing of knockoffs good or bad for consumers in the
short run? Or in the long run?
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Chapter 8: Product I: Innovation and New Product Development
8-31 Critical Thinking It is not necessarily true that all new products benefit consumers or society. What are some
new products that have made our lives better? What are some new products that have actually been harmful to
consumers or to society? Should there be a way to monitor or “police” new products that are introduced to the
marketplace?
Discuss with students new products introduced during their lifetime and made their lives better. Most of the
discussion will probably center on technology equipment and entertainment (i.e., CDs, DVDs, MP3, smart
phones, HDTV, and so on). Another area of new products to explore would be a safety feature on products (e.g.,
side impact air bags). Some new products, like medications, have actually been harmful to some consumers.
8-32 Critical Thinking Patent trolling is the practice of acquiring patents with the sole purpose of making money off
of them either by suing those who infringe on the patent or by licensing the patent. What do you think of the
practice of patent trolling? What effect does patent trolling have on product innovation?
Students can research patent trolling and find examples of companies which have made money by suing those
who infringe of the patent or by licensing the patent. They can debate the ethics of patent trolling and show the
its negative effect on product innovation.
8-33 Critical Thinking Are there potential risks to involving consumers in the development of new products
through processes associated with value co-creation as discussed in the chapter? What factors might make a
value co-creation approach more or less suitable for the development of a new product?
This is an opportunity to review the concept of value co-creation, the process by which an
organization creates worth through collaborative participation by customers and other stakeholders in the new
product development. Students can discuss potential risks in new product development—-unforeseen problems
with toys, for example. How could value co-creation reduce the risk?
8-34 Critical Thinking Products such as video games produced for traditional gaming consoles used console
(such as Xbox one or PlayStation 4). For a video game that is exclusively sold as a download, how do you think
the new product development process might vary compared to the process involved in producing a video game
sold exclusively as a physical product?
MINI-PROJECT: LEARN BY DOING
What product characteristics do consumers think are important in a new product? What types of service
components do they demand? Most important, how do marketers know how to develop successful new
products? This miniproject is designed to let you make some of these decisions as you walk through several
steps of the new product development process.
8-35 Develop a presentation that summarizes your efforts for each of the following phases of new product
development:
a. Phase 1: Idea generation: Create (in your mind) a new product item that might be of interest to college
students such as yourself. Develop a written description and possibly a drawing of this new product.
Describe the benefits of the product.
b. Phase 2: Product concept development and screening: Describe what features the product should have
and the benefits those features will provide for consumers. Estimate both the technical success and the
commercial success of the product.
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Chapter 8: Product I: Innovation and New Product Development
c. Phase 3: Marketing strategy development: Develop a simple marketing plan that identifies the target
market and how you can position the product to meet that market’s needs.
Assume now that you have undergone a thorough business analysis (Phase 4) and have built
a prototype of the product (Phase 5).
d. Phase 6: Test marketing: Describe your product to five other college students, as if you had an actual
prototype of the product. What is their overall opinion of the new product? Would they try the product?
How could you influence them to buy the product?
e. Phase 7: Commercialization: Based on the information you have collected determine whether you are
ready to launch the product. If not, describe the reasons why.
The purpose of the mini-project listed in the chapter is to allow students to experience the new product
development process from the standpoint of an initiator. Students will examine new product characteristics,
service components, and how marketers determine successful new products as they travel through the new
product development process.
Choose the best ideas from among the class and have the “inventors” present the ideas to this “tough audience.”
Award prizes for success; provide improvement feedback for those that still have work to do.
Instructors may wish to extend the deadline for this assignment or make the assignment early enough so
that students will have many opportunities to think, create, write their report, and discuss the outcomes with
peers
V. MARKETING IN ACTION CASE: REAL CHOICES AT
FACEBOOK
Summary of Case
Facebook has big plans for its virtual reality offering, the Oculus Rift, which is designed to transform how
people play games, view videos, and share the experiences of their social lives. The Rift is one of three
premium virtual reality headsets new to the market, and it’s no small market with estimated value at more than
$16 billion. In 2016, the Rift sold for $599, supported by dozens of games. Other uses include viewing
conventional movies and videos, 360° 3D videos, and “virtual reality movies. But problems plagued the early
stages of the product’s introduction. The first shipments were delayed by a component shortage. Some people
complained of motion sickness when using the Rift.
Other companies are rushing to join the virtual reality marketplace. Two major players are HTC and Sony.
HTC, introduced the Vive, a $799 headset designed to use while standing and walking around. Sony introduced
the $399 PlayStation VR headset to compete as a lower priced option. Sony created a new PlayStation 4 with
better performance to effectively run the virtual reality options.
Suggestions for Presentation
This case could be assigned for various out-of-class or in-class discussion activities.
Out-of-Class
Group assignment could include each group investigate other social media sites that are similar in scope to
Facebook.
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Chapter 8: Product I: Innovation and New Product Development
Research the perceived benefits that Facebook provides its customers.
In-Class
Discuss the process of product adoption and the diffusion of innovations for new
technology.
As a class project, conduct a SWOT analysis focusing on the marketing aspects of
Facebook
Discuss the impression that students have of Facebook. Address both the positive and
negative aspects.
You Make the Call
8-36 What is the decision facing Facebook?
8-37 What factors are important in understanding this decision situation?
The following factors are important in understand this decision situation:
8-38 What are the alternatives?
Students might recommend a variety of different alternatives. Some possibilities include:
8-39 What decision(s) do you recommend?
8-40 What are some ways to implement your recommendation?
Students may make a variety of suggestions for implementation depending on their recommendations.
These may include specific promotion activities, specific pricing, research activities and many others.
MYMARKETINGLAB
Go to mymktlab.com for Auto-graded writing questions as well as the following assisted-graded writing
questions:
8-41 Creative Homework/Short Project Assume that you are the director of marketing for the company that has
developed a smart phone to outdo the iPhone. How would you go about convincing the late majority to go
ahead and adopt it—especially since they still haven’t quite caught onto the iPhone yet?
8-42 Creative Homework/Short Project You work for a large retailer and have been asked by a professor at the
local university to give a presentation on how your business classifies products. Prepare a slide show that
defines the various product categories, including any subcategories, and give at least three examples of each.
Include photos of the products where possible.
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Chapter 8: Product I: Innovation and New Product Development
Copyright © 2018 Pearson Education, Inc.