Chapter 12

Although innovation strategies may not work in the long run, overriding short-term reasons compel firms to introduce new products and services. Group starts

False

On the diffusion of innovation curve, the late majority is the final group of buyers who like to avoid change and rely on traditional products until they are no longer available. Group starts

False

Test marketing refers to customers who modify existing products according to their own ideas to suit their specific needs.

False

The maturity phase of the product life cycle is characterized by greatly reduced competition.

False

When Pierre asked a few of his regular customers to test his prototype wine press, he was engaging in alpha testing. Group starts

False

The growth phase of the product life cycle is always dynamic. Which of the following occurs in this phase?

Profits increase as economies of scale are attained.

Which of the following reflects the maturity stage of the product life cycle?

Sales: peak; Profits: peak to declining; Typical Consumers: late majority; Competitors: high number of competitors and competitive products

Even if products succeed, not all consumers adopt new-to-the-world products at the same time.

True

The fact that the Apple iPad is easy to try—demo units are available at Apple stores as well as other retail stores—is helping it diffuse more quickly. Group starts

True

The most challenging part of applying the product life cycle concept is that managers do not know exactly what shape each product's life cycle will take.

True

The most challenging part of applying the product life cycle concept is that managers do not know exactly what shape each product's life cycle will take. Group starts

True

To determine if a new product is commercially viable, a firm can conduct premarket testing.

True

The product life cycle is theoretically ________ with regard to sales and profits.

bell-shaped

Suppose that you work for an advertising agency and are brought into a meeting where everyone is asked to generate ideas for names for a new beach resort. You are engaged in ________, a form of new idea generation.

brainstorming

Pioneer or breakthrough products

can change consumer preferences.

Laptop computers, personal digital assistants, and cellular phones were all readily accepted and diffused in U.S. markets where business and personal lifestyles tend to be faster-paced, compared to many other areas in the world. These products offered ________ with consumers' needs and priorities.

compatibility

By adding new product lines beyond its core business of computer software, like the Surface Pro tablet and Xbox 360 game system, Microsoft primarily benefits by

creating diversification and reducing risk.

Companies that develop customized business software often work closely with their users when installing their products. This close contact often creates new product ideas through

customer input.

As personal computers became popular, the sale of typewriters decreased significantly and now typewriters are only used by a very small segment of consumers. Typewriters are in the ________ stage of the product life cycle.

decline

During the ________ stage of the product life cycle, firms either position themselves for a niche segment of diehard consumers or they completely exit the market.

decline

Firms with products in the ________ stage either position themselves for a niche segment of diehard consumers or those with special needs or they completely exit the market.

decline

The ________ diffusion of innovation group is crucial because few new products can be profitable until this large group buys them.

early majority

During the introduction stage of a product's life cycle, typical consumers are

innovators.

After a product has been launched, marketers must undertake a critical postlaunch review to determine whether the product and its launch were a success or failure and what additional resources or changes to the marketing mix are needed, if any. For a product that does move on, the firms can measure the success of the new product by interrelated factors that include all of the following except

its satisfaction of the firm's manufacturing requirements.

During the ________ stage of the product life cycle, sales peak and profits begin to decline as competition becomes intense.

maturity

Melinda has used Olay beauty products for years, even though there are many competitors on the market. She plans to purchase a recently introduced micro-sculpting cream from Olay's Regenerist line. Olay is in the ________ stage of the product life cycle.

maturity

Even if they succeed, new-to-the-world products are

not adopted by everyone at the same time.

In the diffusion of innovation process, innovators enjoy taking risks and are regarded as highly knowledgeable. Marketers want to identify innovators because

other consumers defer to their judgment, creating the opportunity for word-of-mouth referrals.

The Apple iPod is a ______ product.

pioneer

The diffusion of innovation theory is useful to marketers in helping them

predict which types of customers will buy their product immediately and later.

In one test before product launch, customers try a sample product and are then surveyed to understand whether or not they would buy/use the product again. This is known as

premarket testing.

If a new product concept gets positive evaluations from potential customers during concept testing, the next step for a firm is

product development.

The ________ step in the product development process is critical, requiring tremendous resources and extensive coordination of all aspects of the marketing mix.

product launch

Some products may stay comfortably in the maturity phase of the product life cycle until a new product emerges to replace them. An example of such a mature product is

refrigerators.

Inkjet printers were a big improvement over the dot-matrix printers they replaced. Inkjet printers gained rapid acceptance in the marketplace primarily because of their

relative advantage.

When a global firm turns to its subsidiaries in less developed markets for new product ideas, such as when Samsung's ActivWash was initially developed for the Indian population and is now one of the most popular washing machines in South Korea, it is engaged in

reverse innovation.

When Dr. Sharpie invented his Get-It-There (GIT) golf putting device, he knew during the introductory stage

sales would be low and profits nonexistent, but he would attract golf equipment innovators.