Nested Logit Model – A probabilistic model for representing the discrete choice/behavior of individuals. On any choice occasion the individual is assumed to behave as though choice alternatives were considered in a hierarchical manner. At each stage of the hierarchy the choice to eliminate a set of items from consideration is made according to the logit model (McFadden 1986). The nested logit model arises as a random utility model in which the random component of utility has the generalized extreme value distribution. Guandagni (1983) used this model to represent jointly brand choice and purchase incidence decisions, and Dubin (1986) employed the model to represent consumers’ choice of hoe water heating fuel (gas, oil, or electricity) given the type of space heating system in the home.

Net Investment – Gross investment minus allowances for capital consumption.

Net National Product (NNP) – Gross national product less capital consumption allowance, i.e., depreciation on capital goods destroyed or damaged plus depreciation on minor capital goods.

Net Operating Income – Net sales less net cost of goods sold less operating expenses.

Net Terms – Terms calling for the billed amount of the invoice. No cash discount is allowed.

Never-out List – Key items or best sellers listed separately from a model stock plan or basic stock list by colored stars or other suitable means. It is a list of key items, checking-list item, or best-seller list.

New Product Committee – Made up of high level executives, the committee sets new product policies, establishes priorities, review progress, eliminates logjams, decides whether to abandon or commercialize a new product, and provides impetus to the overall new product program. Members typically include the chief executive, director of the new products department, and the major functional departments. Comment: Usually the new product committee will be in addition to one or more other forms of new product organization listed under new product organization, forms of. While the committee does not actually manage the new product program, it serves to spotlight the performance of the committee members whose departments are responsible for carrying out parts of new product development projects.

New Product Development – The overall process of strategy, organization, concept generation, concept and marketing plan evaluation, and commercialization of a new product. It occasionally is restricted in meaning to that part of the process done by technical (research and development) departments. New product development concerns activity within an organization, in contrasts to the acquisition of finished new products from outside.

New Product Failure – A new product that does not meet the objectives of this developers. Depending on what those objectives are, a profitable new product can be failure, and an unprofitable new product can be a success.

New Product Forecasting Models – These models for forecasting the performance (e.g., trial, repeat, sales, share) of new products and services include three major types of models: 1) those based on management subjective estimates; 2) those based on analogy to a similar product that had been previously introduced to the market; and 3) those based on consumer studies. There are four types of consumer based models: 1) concept test based forecasting models, including models such as POSSE; 2) pretest market-based models, especially those categorized as simulated test market models such as NEWS and Tracker; and 4) early sales-based forecasting models, which include the various diffusion models. For a review of these models, see Wind, Mahajan, and Cardozo (1981).

New Product Manager – This manager is responsible for identifying new product needs, developing new product concepts, and testing the concepts with groups of consumers before turning to research and development for technical development. If a satisfactory product evolves from research and development, the new product manager arranges for consumer product and and package testing; and , if these are successful, prepares market introduction plans. When ready for commercialization the new product manager reports to the marketing manager or division manager. This position is most likely to be found in consumer packaged goods companies producing low technology products.

New Product Organization, Forms of – New product organization provides for the planning, scheduling, coordination, and control of the new product process from idea to commercialization (or abandonment along the way), as well as getting participated from the internal functional departments and external agencies that must do the work. Comment: Internal participation is required of top management (corporate and/or divisional), major functional departments such as marketing, research and development, production, engineering, finance, and physical distribution (logistics). External participation may involve, for example, advertising agencies, industrial design firms, independent laboratories, market research agencies, new product consultants, and new product development companies.

New Product Strategies – The goals a product is expected to achieve in a market. A product’s strategy supports and complements the overall marketing strategy. Some products are used to introduce or pioneer new technologies while others are expected to balance current market offerings in terms of product price, product format, style and features.

New Products Department – This department is responsible for planning and coordinating the new product program for the company. The director has the functional authority to obtain the participation of other company departments and the line authority to hire outside agencies as needed. The director may have a staff of market research and technical people for conducting preliminary investigations before deciding to involve functional departments in full scale development. The director reports to the corporate chief executive. This provides an avenue for the chief executive to be directly involved in the new product program and provides the director with top management backing when needed to get action from functional managers.

NEWPROD – A model for predicting market share of a new product using test market data. The approach views potential customers as progressing through the stages of awareness-trial-repeat purchase. It considers the effect of advertising and promotion on awareness and trial, and the effect of the level of distribution on trial and repeat purchase. (Assymus 1975).

NEWS – A model used to predict the level of awareness-trial-repeat purchase, and market share over time for a new frequently purchased consumer product. It considers explicitly the effect of advertising and promotion on brand awareness and product trial, and also incorporates the effect of the level of distribution on trial and repeat purchase. For any particular new product, the model’s parameters can be calibrated either using pretest market data(i.e., a telephone survey, advertising copy test, concept test, and in-home product-use test) in the NEWS/Planner version, or using test market data in the NEWS/Market version (Pringle, Wilson, and Brody 1982).

Leave a Comment