Business Administration
Department
BA347 New Products Management
Dr.
Geoffrey Lan tos Fall 2007
Glossary of Terms in New Products Management
The 3rd through 5th editions of this book
contained a Glossary of new product terms as an appendix. The authors have since eliminated the
Glossary from the textbook; however it was updated to include terms from the 6
th and 7th editions,
and this version is available here.
The authors did not update the glossary
for the eighth edition. Instead, they
now address your attention to a comprehensive glossary of product terms
available on the Product Development and Management Association (PDM) website (www.pdma.org)
(type “glossary” in the search engine). It is based largely on the Glossary that
appeared in previous editions of the textbook, but it has been greatly
extended. You can use the PDMA glossary
as your reference source for the latest terms. New products management is still
an evolving field, coming from many disciplines, and there is little agreement
on terms. Prof. Crawford compiled and
defined all the terms that appeared in the 3rd edition, as no
authoritative glossary of new product development terms existed at the
time. Another new products glossary has
since appeared, in the PDMA Handbook of
New Product Development (see Bibliography in textbook for publishing
information on this book), and the you may wish to consult this one as well.
A
abandonment The discontinuance of a
marketed product. Also called product deletion or product elimination.
Abandonment may occur at any time from shortly after launch (a new product
failure) to many years later.
accelerated product
development Product development processes that increase
speed to market.
acquisition The purchase by one
organization of people, technology (process, facility, or material), product
rights (trademarks), or entire businesses from other organizations. Acquisition
is a method of expanding one's product offering by means other than internal
development.
activity based accounting Process of
developing costs and revenues (and thus profit contributions) for separate
activities, in this case new products projects.
adaptive product Also called adapted product,
this market entry acquires its uniqueness by variation on another, more
pioneering product. The degree of adaptation is more than trivial (to avoid
being an emulative or me-too product).
adopter categories Persons or firms that adopt
an innovation are often classified into five groups according to the sequence
of their adoption of it: (1) innovators (the first 2 to 5 percent); (2) early
adopters (the next 10 to 15 percent); early majority (the next 35 percent);
late majority (the next 35 percent); and laggards (the final 5 to 10 percent).
The numbers are percents of the total number of actual adopters, not of the
total number of persons or firms in the marketplace. There is wide disagreement
on the exact percentage in each category.
adoption of innovation The process
by which an innovation spreads throughout a population. It consists of adopter
categories (innovators, early adopters, etc.) and a specific process of
adoption by each adopter.
alliance (See strategic alliance.)
alpha test The testing of a new product
in-house, not with potential users (beta test). The testing may be in a
laboratory setting or (as in the case of glues or computers) in some part of
the developing firm's regular operations.
analytic hierarchy process
(AHP) A decision-making procedure which can be
applied to product project screening and evaluation, which is based on
managerial judgment and aided by commercially-available software.
analytical attribute approach A class of
concept-generating techniques not based on the problem find/solve route. The
techniques are many, usually logical, and tend to make variations in products
currently on the market. Attribute analysis and relationships analysis are two
categories of this approach.
announcement Second stage of the product
launch cycle.
applications engineering A strategy
of applying one's technical skills to new areas. Adhesives manufacturers have
often followed such a strategy.
AR perceptual map A positioning map showing positions of competing
brands, derived from respondents’ ratings of each brand on a set of selected
attributes.
A-T-A-R (awareness-trial-availability-repeat) A paradigm consisting of four key steps by
the intended user; the steps take the person or firm from a state of ignorance
about a new product to the point of product adoption. (See awareness, trial, availability and repeat.)
attribute (See product attributes.)
attribute analysis A bundle of idea-generating
techniques built on the concept that any product improvement is a change in the
attributes of its predecessor. Also a term used mean the same as analytical
attribute approach.
augmented product The view of a product that
includes not only its core benefit and its physical or service-procedure being
but adds other sources of benefits, such as service, warranty, and image. The
augmented aspects are added by action of the seller, such as with company
reputation.
availability A measure of the extent to
which target customers can get a new product if they wish to do so. Often
stated as a percent of outlets where the product is stocked or percent of total
market volume done in the stores where stocked (called share of all-commodity-volume).
awareness A measure of the percent of
target customers who are aware of the new product's existence. Awareness is
variously defined, including recall of brand, recognition of brand, recall of
key features or positioning, etc.
B
balanced matrix An organization option that
uses matrix in approximately balanced proportions between the project and the
departments.
basic market description Market
research done before or immediately after selecting an arena for product
innovation charter focus. Prepares the firm to innovate in that area.
Bass model A model used to forecast the
diffusion of durable goods, initially proposed by Frank Bass in 1969.
beachhead The third phase of the launch
cycle. It comes immediately after announcement, is quite frenetic, and ceases
when the product is withdrawn or moves into the fourth (growth) stage.
benchmarking A process of studying
successful competitors (or organizations in general), and selecting the best of
their actions or standards. In the new product program, it means finding the
best process methods and the best process times and setting out to achieve them
in the firm doing the benchmarking.
benefit A product attribute expressed
in terms of what the user gets from the product, rather than its physical
characteristics (features). Benefits are often paired with specific features,
but they need not be. They are perceived, not necessarily real.
benefit segmentation A method of identifying market segments based on
benefits sought or preferred. Dimensions
identified through factor analysis can serve as benefits when doing joint space
mapping.
best practices Set of practices in the new
products field that correlate with successful product introductions. Obtained
by benchmarking or survey.
beta test The type of product use
testing that follows alpha testing and takes place on the premises of intended
market users. The procedure may concentrate only on whether the product
performs as expected or on whether the performance meets the needs of the user,
as perceived by that user, in which case it is called a gamma test.
blind test The type of product use
testing in which the identity of the new item's producer is kept secret.
Unbranded, in contrast to a branded test.
bottom-up strategic approach Management explicitly considers strategic
criteria when making the project selection decision.
brainstorming A group method of problem
solving used in product concept generation. It is sometimes thought to be an
open, free-wheeling idea session, but more correctly is a specific procedure
developed by Alex Osborn, with precise rules of session conduct. Has many
modifications in format of use, each variation with its own name.
brand A name, term, design, symbol, or any other
feature that identifies one seller's good or service as distinct from those of
other sellers. The legal term for brand is trademark. A brand may identify one
item, a family of items, or all items of that seller. If used for the firm as a
whole, the preferred term is trade name. (See trademark, family brand, and individual
brand.)
brand equity The dollar value of a brand.
High brand equity suggests opportunity for line extensions that capitalize on
the brand strength.
brand extension A product line extension
marketed under the same general brand as a previous item or items. To
distinguish the brand extension from the other item(s) under the primary brand,
one can either add a secondary brand identification or add a generic. A brand
extension is usually aimed at another segment of the general market for the
overall brand. (See family brand and individual brand.)
brand generic The second half of a product's
identifying title. Brand is the first half and identifies one seller's version,
while the generic is the second half and identifies the general class of item.
[Example: Jello (brand) gelatin dessert (generic).] Not to be confused with
generic brands (such as on some low-price items in supermarkets) where there is
no individual brand (see generic brands).
brand image The perception of a brand in
the minds of persons. The image is a mirror reflection (though perhaps
inaccurate) of the brand personality or product being. It is what people
believe about a brand--their thoughts, feelings, expectations.
brand name That part of a brand that can
be spoken: letters, numbers, or words. The term trademark covers all forms of
brand (name, mark, etc.), but brand name is the form most often meant when
trademark is used. (See brand and trademark.)
brand personality The psychological nature of a
particular brand, as intended by its sellers, though persons in the marketplace
may see the brand otherwise (called brand image). These two perspectives
compare to the personalities of individual humans: what we intend or desire,
and what others see or believe.
brand platform (See platform.)
brand positioning (See product positioning.)
branding, family (See family brand.)
branding, individual Using separate brands for
each product, without a family brand to tie them to other brands of that firm.
(See family brand.)
bubble diagram A technique that can be used by senior
management to assess the strategic balance of a product portfolio.
business analysis A term of many meanings, and
in marketing is usually associated in some way with the evaluation of new
product proposals. In format, it may consist of a five-year, discounted cash
flow, net present value type of financial analysis, or it may be a more
comprehensive analysis of the entire situation surrounding the proposed
product. Chronologically, it may come early in the development process (when it
is used to decide whether expensive R&D should be undertaken), and/or late
in the product development cycle when the commercialization decision is being
made.
C
category platform (See platform.)
checklist A memory-jogger list of items,
used to remind an analyst to think of all relevant aspects. It finds frequent
use as a tool of creativity in concept generation and as a factor consideration
list in concept screening.
cluster analysis A multivariate analytic
technique that combines individual observations into groups or clusters. In benefit segmentation/joint space analysis,
cluster analysis can be used to combine customers in a market into benefit
segments based on their preferences.
codevelopment (See alliances.)
co-location Putting the new product team's individual
members or functional areas in close proximity.
commercialization A stage (usually the last) in
the development cycle for a new product. Commonly thought to begin when the
product is introduced into the marketplace, but actually starts when a
management commits to marketing the item. (See new product development.)
commercialized concept
statement A concept statement presented in promotional
style, used to obtain realistic evaluations from respondents.
component testing The testing of various parts
of the marketing program, separately. Market testing tests them in unison, but
during the development process each item in the marketing mix may be put
through separate testing. Copy testing is the most common form of component testing.
comprehensive prototype A complete prototype; a fully-functioning,
full-size product ready to be examined by potential customers.
concept (See product concept.)
concept generation The act by which new
concepts, or ideas, are created. Also the definition of the second phase of the
overall product innovation process, during which the concepts are created.
Sometimes called idea generation or ideation.
concept statement A verbal and/or pictorial
statement of a concept (for a product or for advertising) that is prepared for
presentation to potential buyers or users to get their reaction prior to its
being implemented. Product concepts are followed by prototypes, advertising
concepts by one of several forms of semifinished production.
concept statement commercialized A term used
in distinguishing two types of product concept statements. A commercialized
product concept statement is prepared in an advertising format, as a persuasive
statement. A noncommercialized product concept statement is prepared in
neutral, nonpersuasive format.
concept testing and development The process
in which a concept statement is presented to potential buyers or users for
their reactions. These reactions permit the developer to estimate the sales
value of the concept (whether product or advertising) and to make changes in it
so as to enhance its sales value.
concurrent engineering A term
applied to the development process when the steps are overlapped rather than
taking place in a sequential, linear fashion. Step two (e.g., motor placement)
is begun well before step one (motor size requirement) is finished; in fact,
step three (motor soundproofing) and step four (motor housing) may also begin
before step one is finished. The overlapped process gets quite confusing, and
rather risky given that earlier outcomes may not be what was expected. The
method is at the heart of accelerated product development.
conjoint analysis An analytical technique that
analyzes the tradeoffs made by respondents among product attributes. Rates the
product attributes in terms of their importance in the market. Useful in
concept evaluation and also concept generation.
contingency plan The action ready in standby that will be taken if a given state of affairs comes about during the new product launch. Usually tied to one or more triggers in the launch control process.
control Usually called managerial
control. Refers to practices that result in a project or other activity
achieving its objectives. Guided missiles are "controlled." Midterm
correction and contingency planning are characteristics of managerial control.
controlled sale A category of market testing
techniques in which the ability of the firm to obtain distribution is not
tested. Distribution is forced (e.g., by giving the outlets free product).
copy strategy statement A statement to the advertising/promotion
creative team as to what requirements ought to be communicated to the targeted
segment.
core product The central benefit or purpose
for which a consumer buys a product. Varies from purchaser to purchaser. The
core product or core benefit may come either from the physical good or service
performance, or it may come from the augmented dimensions of the product. (See augmented product.)
coupling The joining of efforts between
the firm innovating on new products and other firms or persons. Coupling can be
upstream (with vendors), downstream (with customers), or sideways (with
competitors).
creative stimuli A method of ideation whereby
one thinks of a problem or a product and then studies a set of words or phrases
that research has shown to be stimulating.
critical path scheduling A technique
of project control, now usually incorporated in various software programs. The
technique puts all important steps of a given new product project into a
sequential network.
cross-functional (See multifunctional.)
cumulative cost curve The shape
of a line that depicts a firm's cumulative costs of developing and marketing a
new product. It is plotted against the cumulative time, so it runs from zero
(start of project) to 100 percent of time (launch). The curve necessarily runs
from lower left to upper right.
customer service Identifiable, but essentially
intangible, activities offered by a seller in conjunction with a product, such
as delivery and repair. Not to be confused with intangible products (services),
types of products for which the activity is the primary purpose of a sale. The
sale of service products may be accompanied by the provision of customer
services.
customer migration The movement of customers from one product to
an improved or upgraded version of the product, such as the adoption of Windows
98 by Windows 95 users.
cycle time The time of development. From
when an idea is in hand until it is "on the shipping dock."
D
data cube The raw data used as the
starting point of a multivariate analysis.
The “cube” term refers to the fact that the data set has three
“dimensions”: X questions on each of Y stimuli (brands), responded to by a
total of Z respondents.
decay curve The curve representing death
of concepts during the development stage. Begins on the left with 100 percent
of concepts and ends up on the right with the percent actually marketed
successfully. Usually declines rapidly. Also called the mortality curve.
decline stage of the product life cycle The fourth stage of a product life cycle, in
which sales of the product fall off from their levels during the maturity
(third) stage.
deliverability The extent to which an
organization is viewed as being capable of actually delivering to the customer
and adequately servicing a particular new product concept. The measure is an
attribute of the concept, much as manufacturability is. (See
manufacturability.)
demand-pulled innovation Innovation
caused or at least stimulated by the needs, wants, or desires of customers.
Contrasts with supply-pushed innovation. Other terms for these two ideas are
market- or customer-driven innovation and technology-driven innovation.
Derivative products Products based on the same
platform as the existing product but modified incrementally in terms of
technology and/or customer need fulfillment.
Modifications include additions, modifications, or deletions of
features.
design A term of many meanings. In product
innovation, it usually means the activity of going from the product concept to
a finished physical item--technical development phase. The four parts of this
design phase are functional/styling design (traditionally called industrial
design), technical design, detail design, and manufacturing process design. In
design for assembly
(DFA) Techniques used by product designers to
encourage product simplification, or ease of assembly and manufacture.
design for manufacturability
(DFM) Techniques used by product designers to
minimize manufacturing costs.
determinant attribute An
attribute of a product category that (1) distinguishes such products from each
other and (2) is important to buyers.
determinant gap map A two-dimensional map that
uses two determinant attributes to plot all brands in a product category. The
plotting is done by an experienced analyst, not by the consumers themselves
(See AR perceptual map, OS perceptual map).
diagnostic information Information
obtained from any of the evaluative steps of a product's development that goes
beyond the current evaluation to give guidance to later steps. A product use
test, for example, rates the product's usefulness but also gives suggestions on
packaging, positioning, pricing, etc.
diffusion of innovation The process
by which the use of an innovation is spread within a market group, over time,
and over various categories of adopters. (See adopter categories.)
digital co-location Achieving the teamwork benefits of
co-location without actual physical proximity, using communications technology.
dimensional analysis An
analytical attribute approach technique, whereby new concepts are generated
from an exhaustive listing of the dimensions of products in a given category.
direct marketing In the context of controlled sale, this is
the sale of a product directly to the consumer, in order to test a new product
or service.
disciplines panel A variation of brainstorming
in which each participant represents a scientific discipline relevant to the
problem under study. Typical panels have psychologists, chemists, engineers,
lawyers, and others.
diversification The act of adding diverse
product(s) to a line to move the seller into new markets. The degree of
diversification can vary greatly.
DPI Initials stand for development process
improvement.
driving strategies (See strategic decisions.)
dual drive The strategic combination of
technology and market as sources for product innovation. Contrasts with market
drive and technology drive. Innovations are based on at least one specific
technical strength of the firm and at least one specific market opportunity.
E
early adopters The second identifiable
subgroup within a population that begins use of an innovation. They follow
innovators and precede the early majority. (See adopter categories and product
adoption process.)
early majority The third identifiable
subgroup within a population that adopts an innovation. Preceded by early
adopters and innovators. The early majority like to await the outcome of
product trial by the two earlier groups. (See adopter categories and product
adoption process.)
electronic brainstorming a form of brainstorming assisted by group support
systems (GSS) software.
empowerment The act of giving whatever
power it takes to enable a manager (such as a project manager) to get a job
done. A way of overcoming a nonauthority situation. Risky in that it causes
frictions in other established line situations.
emulative product A new product that imitates
another product already on the market. Is somewhat different than previous
products (not a pure me-too), but the difference is not substantial or
significant. (See adaptive product
and innovative imitation.)
engineering design An activity in the product
creation process where a good is configured. Specific form is decided. The
activity is sometimes seen as a late step in the R&D process and sometimes
as an early step in the manufacturing process. The design engineering
department takes the lead in the technical design phase and in the detail
design phase of the overall design process. (See design.)
entry evaluation The first evaluation done
after a concept emerges. It may be by the person creating it, but usually
involves others in the immediate "vicinity." Judgmental,
experience-based, not with creation of new data or opinions.
evaluation A set of activities scattered
through the third, fourth, and fifth stages of the overall product innovation
process. These activities measure the evolving worth of the new product being
developed. Includes such steps as concept testing, product use testing, and
market testing.
evolving product Like a butterfly, a new
product does not just emerge. It begins as a concept (or even just an
opportunity), then goes through various stages, such as protocol, prototype,
pilot plant product, and marketed product.
expected effects matrix A matrix of
two dimensions: damage and probability. Used to classify negative events that
might take place during the launch of a new item. A high score on both
dimensions increases the need for action.+
express warranty Spoken or written promises
made by the seller of a product about what will be done if the product proves
to be defective in manufacture or performance. Contrasts with promises that are
only implied by common knowledge of the product or by customary practices in a
trade. (See implied warranty.)
F
facilitator A person on a team (or
assigned to it) whose task is to enhance the group's productivity and output. A
type of leadership consistent with today's reduced reliance on hierarchies.
factor analysis A multivariate analysis
technique that reduces an original set of attributes into a smaller number of
underlying factors. Used in AR
perceptual mapping.
failure rate The percentage of a firm's
marketed new products that fail to achieve the objectives set for them. Should
not be confused with the decay or mortality rate. The term failure rate should
only be used on products that go to the full intended market target, not a
trial or rollout subset. (See decay curve.)
family brand A brand used on two or more
individual products. The product group may or may not be all of that firm's
product line. The individual members of the family also carry individual brands
to differentiate them from other family members. In rare cases, family brands
have other family brands as members, each of which have individual brands.
Automobiles fit the latter situation, as with Oldsmobile (family), Cutlass
(family), Ciera (individual). (See branding,
individual.)
family packaging