Page 332 - Foundations of Marketing

Developing and Managing Goods and Services | Chapter 11 299

expansion, the coffee drinking habits and types of coffee Italians drink did not match the
13
Starbucks product. If a product idea results in a product similar to the firm’s existing prod-
ucts, marketers must assess the degree to which the new product could cannibalize the sales of
current products. The company’s overall abilities to produce and market the product are also
analyzed. Other aspects of an idea to be weighed are the nature and wants of buyers and pos-
sible environmental changes. At times, a checklist of new-product requirements is used when
making screening decisions. This practice encourages evaluators to be systematic and thus
reduces the chances of overlooking some pertinent fact. Most new product ideas are rejected
during the screening phase.

Concept Testing

To evaluate ideas properly, it may be necessary to test product concepts. In concept testing ,
a small sample of potential buyers is presented with a product idea through a written or oral
description (and perhaps a few drawings) to determine their attitudes and initial buying inten-
tions regarding the product. For a single product idea, an organization can test one or several
concepts of the same product. Concept testing is a low-cost procedure that allows a com-
pany to determine customers’ initial reactions to a product idea before it invests considerable
resources in research and development.
During concept testing, the concept is described briefl y, and then a series of questions is
presented. The questions vary considerably depending on the type of product being tested.
Typical questions include the following: In general, do you fi nd this proposed product attrac-
tive? Which benefi ts are especially attractive to you? Which features are of little or no inter-
est to you? Do you feel that this proposed product would work better for you than the product
you currently use? Compared with your current product, what are the primary advantages of
the proposed product? If this product were available at an appropriate price, would you buy
it? How often would you buy this product? How could this proposed product be improved?
concept testing Seeking
potential buyers’ responses to a
Business Analysis product idea
business analysis Evaluating
During the business analysis stage, the product idea is evaluated to determine its potential
the potential contribution of a
contribution to the firm’s sales, costs, and profits. In the course of a business analysis, evaluators product idea to the firm’s sales,
ask various questions: Does the product fit with the organization’s existing product mix? costs, and profits

Going Green

Will LEDs Become the New Light Bulb?

Thomas Edison’s light bulb may soon be a thing of the also contain mercury, and consumers fear that if the bulbs
past. In 2007 the U.S. Congress passed a bill to completely break, they could be exposed to this toxic substance.
phase out the incandescent light bulb by 2014. Because These considerations are paving the way for another
incandescent bulbs convert just 10 percent of the energy type of bulb: light-emitting diodes (LEDs), semiconduc-
they use into light, substituting them with more efficient tors that don’t use filaments to give off light. Switching
alternatives will reduce energy loss and carbon emissions. to LEDs could reduce CO emissions from electric power
2
At first compact fluorescent light bulbs (CFLs) were lighting sources by as much as 50 percent within two
considered to be the best replacement for incandescent decades. Although the initial cost for LED bulbs is high,
light bulbs. CFLs are more energy efficient and last longer. experts believe they will become less expensive over time.
However, consumers soon began to question the product LED light bulbs might still be in the introduction stage of
quality of these bulbs. Turning a CFL on and off rapidly can the product life cycle, but continued product development
a
burn out the light bulb and reduce its product life. CFLs could make them ready for wide-scale commercialization.

© iStockphoto.com/CRTd

Copyright 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.