Chapter 11 Marketing

When considering the diffusion of innovation, which group is least motivated by advertising or personal selling? a. Laggards b. The late majority c. Innovators d. The early majority

a. Laggards

What do programs like Google X do to promote innovative thinking among its employees? a. They eliminate the fear of coming up with bad ideas by rewarding failure b. They promote investment in bad ideas to explore the possibilities learned from them. c. They promote the fear of coming up with bad ideas by punishing failure. d. They eliminate the possibility of investment in bad ideas by rewarding only successes.

a. They eliminate the fear of coming up with bad ideas by rewarding failure

Sergio, an affluent college graduate, buys gadgets on the day of their launch in the market. He reads expert reviews on the Internet and is not influenced by the opinions of his family and friends while choosing products. Sergio is most likely to belong to the category of _____ in the context of diffusion of innovation. a. innovators b. the late majority c. early adopters d. the early majority

a. innovators

At which stage in the new-product development process is the decision to market a product made? a. Development b. Commercialization c. Test marketing d. Business analysis

b. Commercialization

Atwood Furnishers is experiencing a period when their sales are increasing at a slower rate. The company realizes that new users cannot be added indefinitely and that, sooner or later, its market will approach saturation. Which stage is the company now entering? a. early majority b. late majority c. early adopters d. innovators

b. late majority

Inês, the owner of an ice cream parlor, has been experimenting with different flavors to create a new exotic ice cream for her customers. After much deliberation and many tests, she decides to market the new Beet Cake with Black Walnut variant. In this scenario, the chosen ice cream flavor has entered the _____ stage of the new-product development process. a. development b. commercialization c. test marketing d. business analysis

b. commercialization

When predicting or explaining a new rate of adoption and diffusion of a new product, relative advantage refers to the degree to which that product is ______. a. free of difficulty relating to its usage b. perceived as superior to existing substitutes c. consistent with existing values d. available to be tried on a limited basis

b. perceived as superior to existing substitutes

When developing a new product, which is true of a new-product development strategy? a. It refrains from adopting ideas suggested by customers and competitors. b. It doesn't provide the general guidelines for new-product ideas. c. It involves targeting existing products at new markets. d. It must be compatible with the objectives of the marketing department, the business unit, and the corporation.

d. It must be compatible with the objectives of the marketing department, the business unit, and the corporation.

Comparably speaking, which of the following would have the highest observability in terms of its rate of acceptance and diffusion? a. A musical instrument b. A social media app c. A medicinal tea d. A new line of trousers

d. A new line of trousers

Hakimo Corp., a manufacturer of audio equipment, has developed a unique wireless speaker system that runs on solar power. The speakers can operate for 16 hours after being exposed to the sun for 2 hours. This product, which is radically different from anything available in the market, falls into which category of new products? a. New and improved products b. Revised products c. Repositioned products d. Discontinuous innovations

d. Discontinuous innovations

Which of the following is a disadvantage of test marketing? a. It promotes the criticism of an idea, no matter how ridiculous it may seem. b. It inaccurately predicts the success of a product that creates new consumption patterns. c. It requires major changes in consumer behavior such as rejecting microwave ovens. d. It exposes the new product and its marketing mix to its competitors before its introduction.

d. It exposes the new product and its marketing mix to its competitors before its introduction.

A mobile telephone manufacturer markets a limited-edition cell phone model with 126 different functions. The campaign failed across all 50 states in the United States. Which of the following is the most likely reason? a. The mobile simply wouldn't offer any discernible benefit compared to existing products. b. There was a good match between product and customer desires to have a simple phone. c. The market size was overestimated and thus the manufacturer overproduced. d. The price was a little high and the initial distribution covered a small geographical area.

a. The mobile simply wouldn't offer any discernible benefit compared to existing products.

Which of the following describes the late majority? a. They adopt a new product because most of their friends have already adopted it. b. They depend mainly on mass media rather than on word-of-mouth communication. c. They do not rely on group norms and their adoption is free from pressure to conform. d. They tend to be younger and above average in income as well as education.

a. They adopt a new product because most of their friends have already adopted it.

In comparison to early adopters, which of the following statements is true of the early majority? a. They are likely to collect more information and evaluate more brands. b. They are self-confident, and they rely less on group norms. c. They are more likely to be opinion leaders. d. They are less likely to extend the adoption process.

a. They are likely to collect more information and evaluate more brands.

Test marketing is very expensive. As a result, which of the following is true of some companies? a. They do not test market line extensions of well-known brands to save costs. b. It is better to have a large-scale test market that is decidedly affordable. c. They mandatory test market line extensions of well-known brands. d. They go for a national introduction than an expensive test market.

a. They do not test market line extensions of well-known brands to save costs.

Steve, a retiree, wants to use his savings to open a day care facility for dogs. After deciding on the services that he would provide to his customers, he calculates costs versus the demand and the profit he could make depending on the volume of sales. After extensive deliberation, Steve decides to take a bank loan because the needed initial investment is too high for opening the facility. Steve is currently in the _____ stage of the new-product development process. a. business analysis b. idea generation c. commercialization d. test marketing

a. business analysis

A marketing strategy that entails the creation of marketable new products; the process of converting applications for new technologies into marketable products is called ______. a. product development b. idea screening c. niche marketing d. commercialization

a. product development

A furniture manufacturer with a reputation for making plain, lightweight foldable steel chairs decides to make cushioned chairs with printed upholstery. The new type of chair will be a ______. a. product line extension b. repositioned product c. discontinuous innovation d. new and improved product

a. product line extension

A company well-known for its easy-to-cook breakfast cereals was facing stiff competition from the many players in the market. The company changed its campaign to focus on dietary needs rather than just convenience, thus targeting a segment of consumers looking for healthy diet. This is an example of a ______. a. repositioned product b. discontinuous innovation c. new line-extension product d. new and improved product

a. repositioned product

To rate concept (or product) alternatives, concept tests are often used at the ______ stage. a. screening b. business analysis c. marketing d. developmental

a. screening

Steven, a construction worker, tends to buy a new gadget if most of his friends have them and only after they've teased him about not having the gadget yet. He relies on reviews from his friends rather than on television or newspaper advertisements to make his purchase decisions. It can be inferred that when it comes to the diffusion of innovation, Steven belongs to the group of _____. a. End of the introductory stage b. Beginning of the maturity stage c. Beginning of the growth stage d. End of the decline stage

b. Beginning of the maturity stage

Which of the following is a characteristic shared by both early majority and the late majority? a. Both tend to have opinion leaders within their groups. b. Both depend on word-of-mouth communication. c. Both rely on science and experts for information. d. Both are primarily influenced by the mass media.

b. Both depend on word-of-mouth communication.

A new range of organic confectionary was introduced by Bounty Foods. The company is forced to give its dealer high margins and also needs to invest heavily in advertising. Their production costs are also high. In which PLC stage is the company most likely to be? a. Growth stage b. Introductory stage c. Maturity stage d. Decline stage

b. Introductory stage

When considering the new-product development process, which of the following statements is true of screening? a. It calculates preliminary figures for demand, cost, sales, and profitability. b. It eliminates ideas that are inconsistent with an organization's new-product strategy. c. It involves getting consumer reactions to visual representations of a proposed product. d. It involves making cosmetic or functional changes to existing products.

b. It eliminates ideas that are inconsistent with an organization's new-product strategy.

In which way does the concept of product life cycle (PLC) help marketing managers? a. It tells managers the length of a product's life cycle. b. It helps marketers forecast future events and suggest appropriate strategies. c. It dictates the marketing strategy to be used for a product. d. It informs marketers about the duration of a product in the various stages of its life cycle.

b. It helps marketers forecast future events and suggest appropriate strategies.

Identify a similarity between laggards and innovators. a. Neither is rooted in tradition. b. Neither relies on group norms. c. Both are eager to try new products. d. Both exhibit short adoption time.

b. Neither relies on group norms.

Which of the following is a characteristic of products produced by multinational corporations? a. Products are inadequately distributed in local markets. b. Products are developed for global distribution and then tweaked to meet unique market requirements whenever possible. c. Test marketing is not required for products developed by multinational firms. d. A firm that starts with a local strategy is better able to develop global products.

b. Products are developed for global distribution and then tweaked to meet unique market requirements whenever possible.

For which type of products are concept tests thought to be less effective in predicting the success of a product? a. Customers b. The product's distributor c. A company employee d. The product's competitor

b. The product's distributor

Which is true of the influencers found among early adopters? a. They come from higher-income groups and are mostly in their 30s. b. They are distinguished not by demographics but by behavior. c. They are not focused on earning the respect of others. d. They use media differently than other users who are considered followers.

b. They are distinguished not by demographics but by behavior.

Which of the following describes laggards? a. They have the shortest adoption time and the lowest socioeconomic status. b. They have the longest adoption time and the lowest socioeconomic status. c. They have the longest adoption time and the highest socioeconomic status. d. They have the shortest adoption time and the highest socioeconomic status.

b. They have the longest adoption time and the lowest socioeconomic status.

Felicita Brewery wants to add brown ale beer to its existing list of alcoholic products. The questions the company currently is asking itself are: What is the likely demand for the product? What impact would the new product probably have on total sales, profits, market share, and return on investment? How would the introduction of the product affect existing products? At what stage of new-product development process is this company? a. Developmental stage b. Screening stage c. Business analysis stage d. Marketing staged. Marketing stage

c. Business analysis stage

The beginning of which stage of the product life cycle is signaled by a long-run drop in a product's sales? a. Introductory stage b. Growth stage c. Decline stage d. Maturity stage

c. Decline stage

NutriOats, an oatmeal cookie product, has been in the market for more than seven years and is now in its decline stage. In this case, which of the following strategies would be successful in marketing NutriOats? a. Spend heavily on advertising to educate consumers about the product's benefits. b. Focus on adding new users. c. Eliminate all nonessential marketing expenses and let sales decline. d. Lengthen the product line.

c. Eliminate all nonessential marketing expenses and let sales decline.

Which is a limitation of the PLC concept? a. It only tells managers the length of a product's life cycle based on past and currently running cycles. b. It cannot help marketers forecast future events and suggest appropriate strategies. c. It does not tell managers the length of a product's life cycle or its duration in any stage d. It can only dictate marketing strategy with forecasts of events depending on life cycle length.

c. It does not tell managers the length of a product's life cycle or its duration in any stage

Besides its high cost, what is the other possible problem that test marketing is likely to face? a. Consumers may perceive the sales promotion, pricing, or advertising campaign as overzealous hard sell or even unfair trade practices. b. The actions of competitors countering the test market may contribute to normalizing conditions that the testing firm might expect in the market. c. It exposes the new product and its marketing mix to competitors before its introduction. Thus, the element of surprise is lost. d. The product's success may present a threat to other product extensions recently introduced by the company and thus spread its customers thin.

c. It exposes the new product and its marketing mix to competitors before its introduction. Thus, the element of surprise is lost.

Which statement is true of the maturity stage of the product life cycle (PLC)? a. Product design changes tend to become functional rather than stylistic. b. It is the shortest stage of the PLC. c. Niche marketers that target the underserved segments of a market emerge. d. The beginning of this stage is signaled by increased sales.

c. Niche marketers that target the underserved segments of a market emerge.

Which statement is true of opinion leaders? a. They have the longest adoption time and the lowest socioeconomic status. b. They are distinguished by demographics. c. They speed up the diffusion process through word-of-mouth communication. d. They most likely belong to the late majority category of adopters.

c. They speed up the diffusion process through word-of-mouth communication

Which of the following is a goal of brainstorming? a. To have a group criticize an idea until it is acceptable to all b. To get a group to promote a product without varying it c. To discuss ideas while avoiding criticism of them d. To get a group to arrive at a solution within set parameters

c. To discuss ideas while avoiding criticism of them

When advertising a test product, should test locations in particular markets be isolated from media with a far reach, such as television? a. Yes, if media advertising persuades consumers in the market area, the product may then appear more successful than it really is. It would be an advertising success, not a product success. b. No, if media advertising cannot reach consumers within the market area being tested, it may fail to pull in many consumers from the market and thus the product may then appear less successful than it could be. c. Yes, if media advertising reaches a very large area outside that market, it may pull in many consumers from outside the market being tested and thus the product may then appear more successful than it really is. d. No, if media advertising cannot reach outside that particular market, it will fail to project the product's true potential outside the market and thus the product may then appear less successful than it could be.

c. Yes, if media advertising reaches a very large area outside that market, it may pull in many consumers from outside the market being tested and thus the product may then appear more successful than it really is.

The final stage in the new-product development process is ______. a. test marketing b. business analysis c. commercialization d. development

c. commercialization

In test marketing, the greatest danger is in choosing a test-site city that ______. a. is unique in being representative of the entire city, although it is unlike neighboring cities b. does not respond quickly to changing trends and is highly entrenched in its cultural ways c. does not reflect market conditions in the new product's projected market area d. has a racial mix and thus has more diversity than other cities in the projected market area

c. does not reflect market conditions in the new product's projected market area

Vicente bought his first color television set after flat screen televisions were already widely diffused. He is most likely to be one among the ______. a. late majority b. early adopters c. laggards d. early majority

c. laggards

The objective of brainstorming is to ______. a. postpone objective evaluation but eliminate ideas that do gain unanimous acceptance b. generate a small set of distilled ideas through a process of rigorous objective evaluation c. postpone objective evaluation and focus on the sheer quantity of ideas generated d. generate a large quantity of ideas through a process of rigorous objective evaluation

c. postpone objective evaluation and focus on the sheer quantity of ideas generated

Cleanz Inc., a toiletries manufacturing firm, has launched a new range of organic sanitizing wipes. It wants to test its consumers' reactions to this new product in an economical way. Therefore, Cleanz creates flyers that advertise several of its products along with the new product and send them to a few selected members of the target market. Besides this, it also takes the members to a mock shop and monitors their shopping behavior. In this scenario, Cleanz is using _____. a. traditional test marketing b. scanner-based research testing c. simulated market testing d. virtual test marketing

c. simulated market testing

When predicting or explaining the rate of acceptance and diffusion of a new product, the degree to which it can be sampled on a limited basis is its ______. a. complexity b. observability c. trialability .d. compatibility

c. trialability

A source suggested to Rubbermaid the idea of the Sidekick, a litter-free lunch box. Rubbermaid could place some of its plastic containers inside a lunch box and sell the box as an alternative to plastic wrap and paper bags. The source saw this opportunity because of being closer to the consumers than the manufacturer was and, thus, more aware of customer needs. Which of the following was likely the source? a. Products that are line extensions (same product category and brand) b. Products that do not require major changes in consumer behavior c. Products that are not easily classified into existing product categories d. Products that create new consumption patterns

d. Products that create new consumption patterns

Which is a characteristic of fads? a. They stay in the maturity stage for decades. b. They typically register a gradual and unpredictable spike in sales. c. They peak slowly but then register a rather abrupt decline. d. They can move through the entire cycle in weeks.

d. They can move through the entire cycle in weeks.

Innovators are eager to try new ideas and products, almost as an obsession. Which of the following is true of them? a. They are the first 12.5% of all those who adopt a product. b. They have higher incomes and rely more on group norms. c. They are less worldly, more introverted, and less sociable than noninnovators. d. They have higher incomes and are more self-confident.

d. They have higher incomes and are more self-confident.

Which is a key characteristic of those in the early majority who purchase a new product? a. They tend to be opinion leaders themselves, rather than their friends and neighbors. b. They are likely to collect less information and evaluate fewer brands than early adopters. c. They do not spend much time weighing the pros and cons of adopting a new product. d. They rely on the group for information but are unlikely to be opinion leaders themselves.

d. They rely on the group for information but are unlikely to be opinion leaders themselves.

Nozzle is a specially designed product that retro fits into your existing water faucet and atomizes the water stream in a spray that lets you use 98% less water when washing hands, brushing teeth, and washing produce or dishes. Some consider this a game changer for environmental protection, especially in regions of water scarcity. This product would be categorized as: a. a revised product. b. an addition to existing product lines. c. a repositioned product. d. a discontinuous innovation.

d. a discontinuous innovation.

Compared to innovators, early adopters ______. a. rely less on group norms and values b. are less oriented to the local community c. have weaker affiliations with groups d. are more likely to be opinion leaders

d. are more likely to be opinion leaders

The PLC for a brand that was the first and last competitor in a product form market is ______. a. longer than that of the product form b. shorter than that of the product form c. said to be zero or nil d. as long as that of the product form

d. as long as that of the product form

When considering a product's characteristics and the rate of adoption, complexity refers to the degree to which a new product is ______. a. available to be tried on a limited basis b. perceived as superior to existing substitutes c. consistent with existing values d. difficulty to understand and use the new product

d. difficulty to understand and use the new product

Marketing costs are high in the introductory stage of the product life cycle because a. product design changes become stylistic rather than functional. b. emphasis is given to communicating the differences among brands in the market. c. manufacturers scramble to sign up dealers and distributors. d. high dealer margins are often needed to obtain adequate distribution.

d. high dealer margins are often needed to obtain adequate distribution.

Hamdi Corp. manufactures and sells accessories for cell phones. To boost its sales, the research and development team decides to use product modification as an approach to new product development. In this scenario, the research and development team will most likely: a. add new products to supplement Hamdi's established product line. b. eliminate products that are inconsistent with Hamdi's business mission. c. develop products by applying new technology. d. make a slight change in the design or function of the existing products.

d. make a slight change in the design or function of the existing products.

Samsung is best known for its smartphones, tablets, and televisions. Years ago when it decided to expand its business activities and operations into ship building and military hardware, it was gearing to offer ______. a. repositioned products b. new-to-the-world products c. discontinuous innovations d. new product lines

d. new product lines

Magnira Corp. is an apparel company. After a slow start, it saw a steep rise in the number of its customers and a remarkable increase in its profits. However, with the launch of competing apparel manufacturers in the market, the profits of Magnira have started declining. To sustain its growth in the market, the managers of Magnira should a. advise top management to reduce the number of employees in the company. b. distribute the company's products at limited outlets. c. focus on primary demand stimulation rather than advertising the brand. d. shift to aggressive brand advertising and open new branches of its stores

d. shift to aggressive brand advertising and open new branches of its stores

The approach taken in the process of simultaneous product development leads a company to ______. a. shorten the development process and incur increased costs b. lengthen the development process and incur decreased costs c. lengthen the development process and incur increased costs d. shorten the development process and incur decreased costs

d. shorten the development process and incur decreased costs

Advertising and other promotional materials for a variety of products, including the test product, are shown to members of the product's target market. These people are then taken to shop at a mock or real store, where their purchases are recorded. This is part of the process involved in ______. a. customer relationship management b. scanner-based research c. simultaneous product development d. simulated (laboratory) market testing

d. simulated (laboratory) market testing

In the context of diffusion of innovation, the dominant value of laggards is _____. a. skepticism b. adventure c. deliberateness d. tradition

d. tradition