Chapter 12 – Developing New Products Marketing 6th
Chapter 12
Developing New Products
Tools for Instructors
Brief Chapter Outline
Learning Objectives
Extended Chapter Outline with Teaching Tips
Answers to End of Chapter Learning Aids
Chapter Case Study
Additional Teaching Tips
Connect Activities
Brief Chapter Outline
Why Do Firms Create New Products?
Diffusion of Innovation
How Firms Develop New Products
The Product Life Cycle
End of Chapter Learning Aids
Chapter Case Study: Is the Glass Half Full? The Launch, Death Struggles, and Potential Reemergence of
Google Glass
Learning Objectives
LO12-1 Identify the reasons firms create new products.
Firms need to innovate to respond to changing customer needs, prevent declines in sales from market
LO12-2 Describe the different groups of adopters articulated by the diffusion of innovation theory.
The diffusion of innovation theory can help firms predict which types of customers will buy their products
or services immediately upon introduction, as well as later as they gain more acceptance in the market.
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Chapter 12 – Developing New Products Marketing 6th
LO12-3 Describe the various stages involved in developing a new product or service.
When firms develop new products, they go through several steps. First, they generate ideas for the
product or service using several alternative techniques, such as internal research and development, R&D
consortia, licensing, brainstorming, tracking competitors’ products or services, or working with customers.
LO12-4 Explain the product life cycle.
The product life cycle helps firms make marketing mix decisions on the basis of the product’s stage in its
life cycle. In the introduction stage, companies attempt to gain a strong foothold in the market quickly by
Extended Chapter Outline with Teaching Tips
I Why Do Firms Create New Products?
A Changing Customer Needs
B Market Saturation
C Managing Risk through Diversity
D Fashion Cycles
E Improving Business Relationships
Progress Check: Several questions are offered for students to check their understanding of core
concepts.
1. What are the reasons firms innovate?
II Diffusion of Innovation
A Innovators
B Early Adopters
C Early Majority
D Late Majority
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Chapter 12 – Developing New Products Marketing 6th
E Laggards
F Using the Diffusion of Innovation Theory
1 Relative Advantage
2 Compatibility
3 Observability
4 Complexity and Trialability
Progress Check: Several questions are offered for students to check their understanding of core
concepts.
1. What are the five groups on the diffusion of innovation curve?
2. What factors enhance the diffusion of a good or service?
III How Firms Develop New Products
A Idea Generation
1 Internal Research and Development
2 R&D Consortia
3 Licensing
4 Brainstorming
5 Outsourcing
6 Competitors’ Products
7 Customer Input
B Concept Testing
C Product Development
D Market Testing
1 Premarket Tests
2 Test Marketing
E Product Launch
F Evaluation of Results
Progress Check: Several questions are offered for students to check their understanding of core
concepts.
1. What are the steps in the new product development process?
2. Identify different sources of new product ideas.
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Chapter 12 – Developing New Products Marketing 6th
IV The Product Life Cycle
A Introduction Stage
B Growth Stage
C Maturity Stage
1 Entry into New Markets or Market Segments
2 Development of New Products
D Decline Stage
E The Shape of the Product Life Cycle Curve
F Strategies Based on Product Life Cycle: Some Caveats
Progress Check: Several questions are offered for students to check their understanding of core
concepts.
1. What are the key marketing characteristics of products or services at each stage of the product
life cycle?
Answer: In the introduction stage, marketers attempt to build awareness and develop the market
2. Why might placement decisions for products or services into stages of the product life cycle
become a self-fulfilling prophecy?
Answer: If a product experiences several seasons of declining sales, a manager may determine
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