Chapter 12

Which type of firm is most likely to engage in a licensing approach to R&D?

A firm with a low budget and a need to get a product to market quickly

True pioneer products are products that have never been seen before and literally create new markets. Which of the following products would be considered a pioneer product at the time it was introduced?

Amana's microwave oven in 1967 Pampers disposable diapers in the early 1960s

Product development or product design entails a process of balancing which types of considerations?

Engineering Marketing Manufacturing

True or false: New products must be targeted toward end consumers.

False: New products do not always target end consumers; sometimes they function to improve relationships with suppliers.

What is a key characteristic of the maturity stage?

Firms defend market share

Which of the following statements about firms' expectations regarding the success of internal research and development efforts is true?

Firms expect that a few highly successful products will cover the costs of the entire R&D effort.

Which of the following industries are most likely to participate in a research consortium? (Select all that apply.)

High-tech Pharmaceuticals

The diffusion of innovation curve illustrates the typical rate of adoption for a product or service among consumers. According to the curve shown, when would marketers expect to see highest frequency of purchases for a given product or service?

In the middle of the curve

What will happen to a firm if it continues to produce the same products in a saturated market?

It will eventually decline.

Some analysts have attributed the success and quick diffusion of the Apple iPod in part to the white earbuds. At the time, earbuds were not seen as often, and most headphones were black, not white. As knowledge of the iPod spread, the white earbuds could be seen even if the iPod itself was out of sight. This is an example of which of the factors that affect speed of diffusion?

Observability

In distinguishing between firm strategies for developing new products, a pioneer firm will be more likely to rely on its ______, whereas a follower firm will be more likely to ______ for ideas.

R&D department; scan the market

A firm that joins with other firms as well as government and educational institutions to research a costly new technology is participating in which of the following?

Research consortium

Without innovation, what options would be available to firms?

Take current products to new markets Continue to market current products to current customers

What is one reason Sara Lee developed a new white bread with whole grains?

The company saw consumer needs changing.

What can marketers learn from the diffusion of innovation theory? (Select all that apply.)

The rate at which consumers are likely to adopt a new product or service Which markets are likely to be most receptive to new products or services

What objective(s) do firms have in adding new products, services, and processes to their offerings? (Select all that apply.)

To keep customers from getting bored with existing products To satisfy the changing needs of consumers

True or false: Contributing factors to the increased failure rate for new products are targeting the wrong segment and poor positioning.

True: The main reasons for failure include neglecting to do appropriate product testing, targeting the wrong segment, and/or poor positioning.

The diffusion of innovation curve refers to the rate in which consumers ______ a given product or service.

adopt, the diffusion of innovation curve refers to the initial adoption of a product, not subsequent purchases.

New products and services that consumers accept quickly will have a high ______ rate early in their product life cycles, which will accelerate the diffusion process across the various stages.

adoption

Relative ______ deals with perception among consumers that a product is better than its substitutes.

advantage

The Apple iPod was readily accepted by consumers in part because it was an easy way to listen to music anywhere, with substantial improvements over portable CD players. This is an example of a relative ___________ within the diffusion process.

advantage

Firms need to continue to innovate because customer needs ______.

are constantly changing

Mattel wants to create new toys that will better integrate increased and advanced technology and emphasize storytelling. Which of the following reasons firms create new products is represented in this decision?

changing customer needs

The degree to which one's product is consistent with the needs and habits of target consumers is known as ______.

compatibility

Sometimes, firms have difficulty moving through the brainstorming process themselves. When this occurs, they can hire outside firms such as IDEO, which help to create an environment that is conducive to ______.

creativity

The process by which the use of an innovation, whether it be a product or service, is spread throughout a market group over time and over various categories of adopters, is known as ______.

diffusion of innovation

The theory that helps marketers understand the product or service adoption rates of consumers is called ______.

diffusion of innovation

When a company adds new products this helps the company to ______ its risk.

diversify

Those kids who play with Mattel's new toys that focus on digital content and learning activities and are considered opinion leaders for other kids are a part of which diffusion of innovation group?

early adopters

Sara Lee determined the new product was a success at which stage of the development process?

evaluation of results

Sara Lee's use of the focus group to help develop the package is an example of

idea generation

A company that develops a new merchandise tracking technology that automatically notifies suppliers when a new shipment is needed is using its new product to _______.

improve business relationships

_________is the process by which ideas are transformed into new products and services that will help firms grow.

innovation

The first kids who own one the latest line of 12 dolls designed to represent the top female wrestlers with the WWE represent which group in the diffusion of innovation model?

innovators

As Mattel's traditional toys like Barbie and Ken dolls are purchased by consumers, there may come the point where most households own one. When this occurs, Mattel will encounter which reason firms create new products?

market saturation

Licensing is a trade-off in that it can save a firm from the high costs of in-house R&D, but instead the firm is counting on a solution (product) that already exists but has not been ______.

marketed

Some markets demand a higher frequency of new product releases than others. In which of the following markets do sales come from new products?

movies books videogames

_______________or break through products re brand new products that establish a completely new market or radically change both the rules of competition and consumer preferences in a market.

pioneers

The "sensory panel" is an example of

premarket testing.

__________ development entails a variety of processes and considerations to determine the form and features of a firm's offerings.

product

Mattel creates prototypes of the 15 new Ken dolls during the ____________ stage of the product development process.

product development

The _______ department can be considered an investment into a company's future, in which scientists work to solve problems and develop new ideas.

research and development

New product and service innovation is important because the longer a product or service exists in a given marketplace, the more likely that the market will become ______.

saturated

Adding new products is most likely to prompt consumers to purchase in which of the following industries?

video games