netrashetty
MP Guru
DRS Technologies, Inc. (DRS) is a US-based defense contractor. Previously traded on the NYSE, the company was purchased by the Italian firm Finmeccanica in October 2008.
VATORS.
The first people in a society to adopt a new product are the innovators. These people are risk takers and may be looking for new products to try. They represent only 2.5 percent of the population. Though these people are the first to try a product, they are not usually opinion leaders. Consequently, they do not pass information about the product to the rest of the population.
EARLY ADOPTERS.
The early adopters have many opinion leaders in their ranks. They are the first people in the neighborhood to try a new product, and many of them willingly pass the information about the product onto other people. Their experiences can determine whether a product will have a long or short life cycle. They represent about 13.5 percent of the population.
EARLY MAJORITY.
Once the early adopters have tried and given their approval to a product, the early majority will begin to follow. Thirty-four percent of the population is in this category. Since they represent such a large percent of the population, the adoption by the early majority causes the new product to enter a period of rapid growth.
LATE MAJORITY.
After a significant portion of the population has adopted a product, the late majority will consider its use. These people are not risk takers; they typically wait until they see the product approved by others. They also represent about 34 percent of the population. Once they have adopted the product, the innovators, early adopters, early majority, and late majority represent a total of about 84 percent of the population. By this point, the new product will have reached its maturity.
LAGGARDS.
The last category of society to adopt a new product is generally fearful about trying new things. Often, they wait until being forced to adopt because the alternate product is no longer being produced. The laggards represent about 16 percent of the population.
NEW-PRODUCT DEVELOPMENT
Although product development is not usually recognized as a formal stage in the product life cycle, many ideas for long-term product planning are derived from the concepts that are generated through this preliminary process. Product development is defined as a strategy for company growth by offering modified or new products to current market segments. Additionally, product development focuses on turning product concepts into a physical product, while ensuring that that the idea can be turned into a workable product through each stage.
In the product development stage, costs begin to accumulate due to the investment in proposed concepts and ideas. Before introduction, a successful product in the marketplace will go through the following eight distinct stages of new product development: idea generation, idea screening, concept development, marketing strategy, business analysis, product development, test marketing, and commercialization.
Idea generation usually stems from the organization's internal sources (R&D, engineering, marketing). Company employees will brainstorm new ideas to generate viable product concepts. Additionally, a company may also analyze their competition's new product offerings with the intention of differentiating and improving on existing designs.
Ideas are ultimately screened, reducing the number of unrealistic concepts and focusing on realistic, attainable concepts. A single idea is developed into a product concept. Concepts are then tested to measure how appealing the product might be to consumers from the anticipated target market. Testing may range from focus groups to random surveys.
After concept testing, a marketing strategy is needed to define how the product will be positioned in the marketplace. Identifying the product's anticipated target market, financial expectations, distribution channels, and pricing strategy are also determined at this time.
Business analysis, including sales forecasting, determines if the product will be profitable to manufacturer. Many factors are considered when judging the products anticipated profitability. Managers will look at the length of time it takes for the product to be profitable, cost of capital, and other financial considerations when deciding weather to proceed with development. If the concept is approved, a prototype is created from the product concept.
The prototype undergoes rigorous testing to ensure safety and effectiveness of the product. These tests are a good measure for determining whether or not a product is safe and if it should if the designers should move forward with the creation of the product.
Once a successful prototype is developed, companies perform test marketing on the product. Typically, a company will conduct formal research on a product concept to see if the proposed idea has validity with the targeted audience. Again, customer surveys and focus groups are conducted with the intention of testing the product on a sample of the targeted demographic. The testing is then analyzed to measure consumer reaction to the product. Once all the information is available and the company decides to introduce the product, high commercialization costs are incurred.
Quality of Researcher – As we will discuss, research conducted using primary methods are largely controlled by the marketer. However, this is not the case when it comes to data collected by others. Consequently, the quality of secondary research should be scrutinized closely since the origins of the information may be questionable. Organizations relying on secondary data as an important component in their decision-making (e.g., market research studies) must take extra steps to evaluate the validity and reliability of the information by critically evaluating how the information was gathered, analyzed and presented.
Not Specific to Researcher’s Needs – Secondary data is often not presented in a form that exactly meets the marketer’s needs. For example, a marketer obtains an expensive research report that looks at how different age groups feel about certain products within the marketer’s industry. Unfortunately, the marketer may be disappointed to discover that the way the research divides age groups (e.g., under 13, 14-18, 19-25, etc.) does not match how the marketer’s company designates its age groups (e.g., under 16, 17-21, 22-30, etc). Because of this difference the results may not be useful.
Inefficient Spending for Information – Since the research received may not be specific to the marketer’s needs, an argument can be made that research spending is inefficient. That is, the marketer may not receive a satisfactory amount of information for what is spent.
Incomplete Information – Many times a researcher finds that research that appears promising is in fact a “teaser” released by the research supplier. This often occurs when a small portion of a study is disclosed, often for free, but the full report, which is often expensive, is needed to gain the full value of the study.
Not Timely – Caution must be exercised in relying on secondary data that may have been collected well in the past. Out-of-date information may offer little value especially for companies competing in fast changing markets.
Not Proprietary Information – In most cases secondary research is not undertaken specifically for one company. Instead it is made available to many either for free or for a fee. Consequently, there is rarely an “information advantage” gained by those who obtain the research.
VATORS.
The first people in a society to adopt a new product are the innovators. These people are risk takers and may be looking for new products to try. They represent only 2.5 percent of the population. Though these people are the first to try a product, they are not usually opinion leaders. Consequently, they do not pass information about the product to the rest of the population.
EARLY ADOPTERS.
The early adopters have many opinion leaders in their ranks. They are the first people in the neighborhood to try a new product, and many of them willingly pass the information about the product onto other people. Their experiences can determine whether a product will have a long or short life cycle. They represent about 13.5 percent of the population.
EARLY MAJORITY.
Once the early adopters have tried and given their approval to a product, the early majority will begin to follow. Thirty-four percent of the population is in this category. Since they represent such a large percent of the population, the adoption by the early majority causes the new product to enter a period of rapid growth.
LATE MAJORITY.
After a significant portion of the population has adopted a product, the late majority will consider its use. These people are not risk takers; they typically wait until they see the product approved by others. They also represent about 34 percent of the population. Once they have adopted the product, the innovators, early adopters, early majority, and late majority represent a total of about 84 percent of the population. By this point, the new product will have reached its maturity.
LAGGARDS.
The last category of society to adopt a new product is generally fearful about trying new things. Often, they wait until being forced to adopt because the alternate product is no longer being produced. The laggards represent about 16 percent of the population.
NEW-PRODUCT DEVELOPMENT
Although product development is not usually recognized as a formal stage in the product life cycle, many ideas for long-term product planning are derived from the concepts that are generated through this preliminary process. Product development is defined as a strategy for company growth by offering modified or new products to current market segments. Additionally, product development focuses on turning product concepts into a physical product, while ensuring that that the idea can be turned into a workable product through each stage.
In the product development stage, costs begin to accumulate due to the investment in proposed concepts and ideas. Before introduction, a successful product in the marketplace will go through the following eight distinct stages of new product development: idea generation, idea screening, concept development, marketing strategy, business analysis, product development, test marketing, and commercialization.
Idea generation usually stems from the organization's internal sources (R&D, engineering, marketing). Company employees will brainstorm new ideas to generate viable product concepts. Additionally, a company may also analyze their competition's new product offerings with the intention of differentiating and improving on existing designs.
Ideas are ultimately screened, reducing the number of unrealistic concepts and focusing on realistic, attainable concepts. A single idea is developed into a product concept. Concepts are then tested to measure how appealing the product might be to consumers from the anticipated target market. Testing may range from focus groups to random surveys.
After concept testing, a marketing strategy is needed to define how the product will be positioned in the marketplace. Identifying the product's anticipated target market, financial expectations, distribution channels, and pricing strategy are also determined at this time.
Business analysis, including sales forecasting, determines if the product will be profitable to manufacturer. Many factors are considered when judging the products anticipated profitability. Managers will look at the length of time it takes for the product to be profitable, cost of capital, and other financial considerations when deciding weather to proceed with development. If the concept is approved, a prototype is created from the product concept.
The prototype undergoes rigorous testing to ensure safety and effectiveness of the product. These tests are a good measure for determining whether or not a product is safe and if it should if the designers should move forward with the creation of the product.
Once a successful prototype is developed, companies perform test marketing on the product. Typically, a company will conduct formal research on a product concept to see if the proposed idea has validity with the targeted audience. Again, customer surveys and focus groups are conducted with the intention of testing the product on a sample of the targeted demographic. The testing is then analyzed to measure consumer reaction to the product. Once all the information is available and the company decides to introduce the product, high commercialization costs are incurred.
Quality of Researcher – As we will discuss, research conducted using primary methods are largely controlled by the marketer. However, this is not the case when it comes to data collected by others. Consequently, the quality of secondary research should be scrutinized closely since the origins of the information may be questionable. Organizations relying on secondary data as an important component in their decision-making (e.g., market research studies) must take extra steps to evaluate the validity and reliability of the information by critically evaluating how the information was gathered, analyzed and presented.
Not Specific to Researcher’s Needs – Secondary data is often not presented in a form that exactly meets the marketer’s needs. For example, a marketer obtains an expensive research report that looks at how different age groups feel about certain products within the marketer’s industry. Unfortunately, the marketer may be disappointed to discover that the way the research divides age groups (e.g., under 13, 14-18, 19-25, etc.) does not match how the marketer’s company designates its age groups (e.g., under 16, 17-21, 22-30, etc). Because of this difference the results may not be useful.
Inefficient Spending for Information – Since the research received may not be specific to the marketer’s needs, an argument can be made that research spending is inefficient. That is, the marketer may not receive a satisfactory amount of information for what is spent.
Incomplete Information – Many times a researcher finds that research that appears promising is in fact a “teaser” released by the research supplier. This often occurs when a small portion of a study is disclosed, often for free, but the full report, which is often expensive, is needed to gain the full value of the study.
Not Timely – Caution must be exercised in relying on secondary data that may have been collected well in the past. Out-of-date information may offer little value especially for companies competing in fast changing markets.
Not Proprietary Information – In most cases secondary research is not undertaken specifically for one company. Instead it is made available to many either for free or for a fee. Consequently, there is rarely an “information advantage” gained by those who obtain the research.
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