9609 · 8.1.2
Product development flashcards
Revision flashcards for Cambridge 9609 Product development (syllabus 8.1.2). Flip, recall, then mark a real past-paper question.
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NPD first stage?
Idea generation — R&D, staff suggestions, customer feedback.
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Screening?
Filter ideas by feasibility, cost, fit with brand.
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Concept testing?
Present idea to sample customers before expensive development.
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Test marketing?
Limited launch in one region to test real sales.
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NPD risks?
High R&D cost, failure at launch, cannibalising existing products.
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Link to Ansoff?
Product development = new product, existing market (8.2.2).
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Link to PLC?
New product starts introduction stage (3.1.4).
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Extension strategies?
Line extensions cheaper than wholly new products.
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What is the New Product Development (NPD) process?
A sequence of stages a business undertakes to bring a new or improved product to market, from initial idea generation through to commercial launch. It acts as a filtering process to reduce risk.
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Define 'Concept Testing'.
An early stage in NPD where a new product idea (not a physical product) is presented to target consumers to gauge their reactions, assess potential demand, and gather feedback before development begins.
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What is 'Test Marketing'?
A limited launch of a new product and its marketing plan in a small, controlled market or geographical area to test consumer response before committing to a full-scale national launch.
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What is the role of Research and Development (R&D) in NPD?
R&D is responsible for the technical and scientific aspects of creating a product. It involves research to gain new knowledge and development to apply that knowledge to create new or improved products and processes.
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Define 'Commercialisation' in the context of NPD.
The final stage of the NPD process, involving the full-scale launch of the product into the market. This includes committing to large-scale production, marketing campaigns, and establishing distribution channels. It marks the beginning of the Product Life Cycle.
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What is the 'business analysis' stage in NPD?
The stage where the commercial viability of a product idea is assessed. It involves creating detailed sales forecasts, cost estimates, and profitability analysis (e.g., break-even analysis) to determine if the product meets the company's financial objectives.
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What is the 'sunk cost fallacy' in NPD?
The mistake of continuing with a failing project because of the amount of money or resources already invested (sunk costs). Rational decision-making should only consider future costs and benefits, not unrecoverable past investments.