4. Concept Definition and Evaluation Flashcards Preview

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Flashcards in 4. Concept Definition and Evaluation Deck (17)
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1
Q

Potential market

A

All customer who show interest in the product

2
Q

Available market

A

All customers who have sufficient income to afford and access the product

3
Q

Qualified available market

A

All customers who pass the availability and are qualified

4
Q

Served or target market

A

All customers in the qualified market that the company decides to pursue

5
Q

Penetrated market

A

All customers who have already bought the product

6
Q

Making forecasts about the future - 2 features

A
  1. Expected level of variable given data is available
    • function of structural variation
  2. Degree of accuracy that can be assigned to forecasted value
    • function of ability to correctly model the variable, random variation and sometimes unforeseen events
7
Q

Time-series analysis

A

Time-series forecast projects past experiences into the future using historical data with the assumption that the future will be like the past

  • trend
  • seasonality
  • cycles
  • irregualar variations
  • random variations
8
Q

Causal forecasting methods

A

Causal models use a number of explanatory factors to predict a variable of interest

9
Q

Adoption process of new products

A

How is a new idea, a good, or a service assimilated into a social system over time?

  • Diffusion: Spread of an idea or the penetration of a market by a new product from its source of creation to its ultimate users or adopters
  • Adoption: Steps an individual goes through from the time he hears about an innovation until final adoption
  • Innovativeness: Difference among individuals in their response to new ideas
10
Q

Bass Model

A

• model used to forecast first purchases of a new product for which no closely competing alternatives exist
• managers need such forecasts before investing significant resources in them
• model is used when:
- firm has recently introduced the product and has observed first sales
- firm has not introduced the product but it is similar to an existing product

11
Q

Two types of customers

A
  • Innovators: Buy the product using the information about the product through packaging and advertising (“external influence”)
  • Imitators: Buy the product based on experience of other people (“internal influence”)
12
Q

Assumptions underlying the Bass model

A
  • market potential m remains constant
  • the marketing strategies supporting the innovation do not influence the adoption process
  • the customer decisions process is binary
  • the value of q is fixed throughout the lifecycle of the innovation
  • uniform mixing (everyone can come into contact with everyone else)
  • imitation always has a positive impact
  • sales of the innovation are considered to be independent of the adoption or non-adoption of other innovators
  • there is no repeat or replacement purchase of the innovation
13
Q

Innovation of the day: Heinz Ketchup

A
  • Example description: in 2001, Heinz introduced new bottles that are stored upside down
  • What made it stand out: New packaging design facilitated easy pouring
  • How does it relate to concepts we discussed previously: It is an incremental innovation on the product and market level with a very strong sales growth response
14
Q

Concept evaluation

A
  1. Initial screening:
    • Which concepts should be tested with regard to their marketability?
  2. Marketability analysis:
    • Which market opportunities do the different product concepts have?
  3. Economic feasibility:
    • Which economic success is to be expected from the different product concepts?
  4. Realization
15
Q

Concept screening and forecasting methods

  1. question
A

Is a historical time-series of variable of interest available?

Yes: Economic methods

No: Judgemental methods

16
Q

Concept screening and forecasting methods

Time-series data is not available

A

Judgmental methods:

  • Market research
  • Delphi method
  • Panel consensus method
  • Visionary forecast
  • Historical analogy
  • Scenario analysis
17
Q

Concept screening and forecasting methods

Time-series data is available

A

Is historical time-series data of multiple variables of interest available?

Yes: Causal regression models

No: Time-series models