MKT CHAPTER 12

________ refers to the process by which the use of a product, service, or process spreads throughout a market group over time and across various categories.

Diffusion of innovation

_____ are buyers of a product or service who are the first ones to adopt it.

Innovators

______ are consumers who like to avoid changes and rely on traditional products until they are no longer available.

Laggards

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

false

In terms of their place on the diffusion of innovation curve, innovators are the ______ category of consumers.

first

As ________, one of the advantages that pioneers have is they create a new market or product category, establishing a commanding initial market share lead.

first movers

At which stage in the product life cycle do sales experience their most rapid increase?

growth

In the new product development process, companies have a variety of ways for ________, including collaborating with other firms, brainstorming, licensing, and customer research.

idea generation

When _________ enter a new product market, the product has achieved its full market potential, sales tend to level off, or may be in decline.

late majority adopters

The early ______ represents the earlier half of the two largest categories of consumers on the diffusion of innovation curve.

majority

If a firm has a positive result from the market testing the next step is known as _____ launch.

product

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

When firms decide to develop new products, it is typically a long process that is broken into ______ stages.

six

When Subway introduced a new Southwestern Club sandwich in South Florida before launching it nationwide, it was engaging in ______.

test marketing

________ entails a process of balancing various engineering, manufacturing, marketing, and economic considerations to develop a product's form and features or a service's features.

Product design

What are key characteristics of the introduction stage?

Profits are low Start-up costs are high

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

Without innovation, what options would be available to firms?

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

Which of the following is a market testing method that offers a strong predictor of product success based on actual purchasing behavior?

Test marketing

Disney recently released new versions of its classic movies, Aladdin and The Lion King. This is an example of new product innovation based on

a fashion cycle.

The first physical form or service description of a new product, still in rough form, having the same properties as a new product, but produced through different manufacturing processes, is called

a prototype.

A product that is perceived to be better than most substitutes is said to have ________, which should speed up the diffusion process.

a relative advantage

Early ______ are the category of consumers who begin to use a product or service immediately following innovators. (Remember to type only one word in each blank.)

adopters

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

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

When Ben & Jerry's Ice Cream tests all its proposed new flavors on its own employees at its corporate headquarters in Vermont, it is partaking in

alpha testing.

Firms need to continue to innovate because customer needs ______.

are constantly changing

Kendrick is highly knowledgeable about new developments in computer technology, since he reads everything he can find about the subject. Typically, being the first to try out new computer parts and models, he would be classified ________ in terms of the diffusion of innovation curve.

as an innovator

When a firm uses potential consumers who examine the product prototype in a real-use setting to determine its functionality, performance, and potential problems, it partakes in

beta testing.

When a product is offered in a foreign market but cultural differences slow down the diffusion process, it would most likely be attributed to low levels of

compatibility.

A _____ is a written description of a product and its technology and is presented to potential buyers or users to obtain their reactions.

concept

In the new product development process, this stage is when the company provides brief written descriptions of the product and what customer needs it would satisfy, sometimes including visual images of what the product would look like.

concept testing.

The 5.5 million vinyl long-playing (LP) records sold in the United States per year pales in comparison with the 1.26 billion digital downloads. The grooves in vinyl records create sound waves that are similar to those of a live performance, however, which means they provide a more authentic sound, which in turn means nightclub DJs, discerning music listeners, and collectors will always prefer them. Firms that sell LPs position themselves for a niche segment of diehard consumers. They are in the ________ stage.

decline

_____ of innovation is the process by which the use of an innovation, whether a product or a service, spreads throughout a market group over time and over various categories of adopters.

diffusion

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

One advantage of product innovation is that a firm can expand into different product categories. The point of the risk ______ strategy is that if some products in one category are competing poorly, others in another category could be doing very well.

diversification

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

diversify

If the _______ buying group is relatively small, the number of people who ultimately adopt the innovation likely will also be small.

early adopter

Along the diffusion of innovation curve, _______ make up the second group of consumers to adopt an innovation; they tend to be leaders in a social setting.

early adopters

Although they enjoy novelty and are considered to be opinion leaders, ________ are not the first to purchase new product innovations.

early adopters

Usually, during the _______ stage of the product life cycle, the typical consumers are early adopters, and there are increases in the number of competitors.

growth

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

Which term refers to the process by which ideas get transformed into new offerings, including products, services, processes, and branding concepts that will help firms grow?

innovation

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

innovation

While the ______ is first to adopt the item, the ______ adopts next.

innovator; early adopter

The ______ stage of the product life cycle is characterized by the adoption of the product by the late majority and good profitability.

maturity

People who get Botox treatments consider it to be a private matter; therefore, they do not discuss it with others. This lowers the level of ________, slowing down the diffusion process.

observability

When a company takes apart a product, analyzes it, and creates an improved product that does not infringe on the competitor's patents, if any exist, it is

reverse engineering.

True or False: Managers can use the product life cycle model to help predict what pricing, product, promotional, and placement strategies they should employ at each of the four stages.

true

When a product is first launched during the introduction stage, sales are usually ______ and there are ______ competitors.

very low; essentially no

The problem with using the product life cycle concept is that no one can predict the shape that the product's life cycle will take; therefore, it is impossible to know ______.

which stage the product is in

During the ________ stage, firms face intense competition for market share, causing them to market their product aggressively.

maturity

What is a key characteristic of the maturity stage?

Firms defending market share

Product development entails a variety of processes and considerations to determine which aspects of a product or service?

Form and features

Laggards make up roughly ______ of the market.

16%

The early majority represents approximately ______ of the total consumer market and is crucial to the profitability of a product or service. Without them, the product or service will typically fail.

34%

While late to the party, the late majority category of consumers is still significant, making up roughly ______ of the total consumer market.

34%

Which of the following factors influence how rapidly a product will move through the product life cycle?

How valuable the product is to the consumer How different the product is from other offerings in the market

Which of the following processes could be considered an acceptable method for generating ideas?

Conducting consumer research Brainstorming within the firm Researching competitors' products and services Communicating with a firm's R&D department

______ generation refers to the first stage in the process by which firms develop a new product.

Idea

_______ are crucial to the success of any new product or service because they help the product gain market acceptance by spreading positive word of mouth about the new product.

Innovators

Hightower Industries wants to be a pioneering firm in the robotics and artificial intelligence industry. Which strategy is the company most likely to pursue?

Invest heavily in research and development

Firms can highlight a product's relative advantage, which refers to which perception among consumers about the product?

It is better than its substitutes.

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

It will eventually decline.

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

Marketing Manufacturing Engineering

What are the key characteristics of the growth stage of the product life cycle?

Sales rise Competitors increase

________ represent(s) a substantial portion of the population, and few new products and services can be profitable until this large group buys them.

The early majority

______ defines the stages products move through as they enter, get established in, and ultimately leave the marketplace.

The product life cycle

What objectives do firms have in adding new products, services, and processes to their offerings?

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

________ relates to how easily consumers can test and use the product.

Trialability

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

Video games

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

Video games Books Movies

What might a concept include along with a brief written description of the product?

Visual images Customer needs it satisfies

What does a postlaunch review help determine?

Whether additional resources are needed Whether changes to the marketing mix are needed Whether the launch was a success or failure

The ________ stage of the product life cycle is characterized by initial losses to the firm due to its high start-up costs and low levels of sales revenue as the product begins to take off.

introduction

During the decline stage of the product life cycle, ______ who have not yet tried the product or service will be entering the market for the first time.

laggards

In some cases, ________ may never adopt a certain product or service since they rely on traditional products until they are no longer available.

laggards

Those consumers who enter the market for the first time during the decline stage are known as ______.

laggards

When the _____ majority of consumers enters the market, the market has already reached its full market potential.

late

A good or service may pass through many stages as it establishes itself in the marketplace. Marketing managers refer to this as the product ______ cycle.

life

In managing its product portfolio, 3M demands that a specific percentage of its yearly sales come from new products introduced within the previous few years to better withstand external shocks and to

manage risk through diversification.

During the ______ stage of the product life cycle, the market for the product usually becomes saturated.

maturity

The introduction of the BlackBerry is an example of a(n) ________ because its introduction to the market radically changed consumer preferences and the entire competitive landscape.

pioneer

In order to accurately evaluate the new product launch, marketers must undertake a critical ______ review to determine whether the product and its launch were a success or failure.

postlaunch

The ________ stage of the new product development process can involve the development of a prototype for alpha or beta testing.

product development

To examine the potential success of its nacho fries, Taco Bell started offering and promoting the product in cities such as Orlando, Florida, and Columbus, Ohio. This move is an example of

test marketing.

When Amazon created the Echo, smart speakers that respond to voice commands and connect via Bluetooth, the most likely reason was to

to adapt to changing customer needs.

True or False: If market testing returns with positive results, the firm is then ready to introduce the product to the entire market, which is called a product launch.

true