M370 Marketing Midterm

________ is when a company hires an outside firm to help accomplish a task.

-outsourcing

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

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

______ refers to a group session in which participants work together to generate new ideas.

-Brainstorming

When a product such as a "nick-free" razor blade is launched, it may diffuse more slowly than a product like the Apple iPad, which is easily seen and whose benefits or uses are easily communicated to others. This comparison exemplifies a difference in ______, one of the product characteristics that affect the speed of diffusion.

-observability

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

-It will eventually decline

A firm's _______ and _________ department consists of scientists who work to solve complex problems and develop new ideas.

-research; development

Without innovation, what options would be available to firms?

-continue to market current products to current consumers -take current products to new markets

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

A concept can be as simple as a brief written description of the product that might also include ______.

-customer needs it satisfies -visual images

In a ______ agreement companies buy the rights to use technologies from another company.

-licensing

_________ is an agreement through which one firm buys the rights to use the technology or ideas of another research-intensive firm.

-licensing

Apple created an entirely new brand that started with the iPod and evolved into different product categories (e.g., iPhone, iPad) before anyone else could catch on. Thus, Apple was the ______, which made the firm easily recognizable to consumers, helping it to gain an early market share lead.

-first mover

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

-innovator; early adopter

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

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

-diffusion of innovation

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

-early adopter

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

-first

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

________ engineering refers to taking apart a competitor's product, analyzing it, and creating an improved product that does not infringe on the competitor's patents (if any exist).

-reverse

Products go through a number of stages in the product life cycle. The stage where a product begins the product life cycle this is known as the _______ stage.

-introduction

While pioneers capture an early and commanding market share, imitators often enter the market and gain which advantages?

-Capitalize on the pioneer brand's weaknesses -Focus marketing efforts on demand for their brand -Can offer better products at lower prices

For concept testing a new fitness tracking device, a firm would present a concept statement to which group?

-customers who jog or go to the gym

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

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

-Innovation

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%

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

-video games

Which of the following is an example of a research and development effort?

-A test kitchen at a fast food restaurant

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

Identify potential impacts to the company when a new product launch is a failure.

-Company may fail -Product may not recover from failure -Negative financial impacts

Which product has the most observability?

-Cordless screwdriver

_______ 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

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

-Diversify

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.

Identify one of the disadvantages from being a first mover. Multiple choice question.

-Having to establish the market all alone

Which of the following industries are most likely to participate in a research consortium?

-High-tech -Pharmaceuticals

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

For the first few releases of new iPhone models, lines formed outside Apple stores, sometimes days in advance. The people in these lines hoped to be the first to obtain the latest phone. Most of the people in this line probably belonged to which of the adopter groups for new technology?

-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

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

-Manufacturing -Marketing -Engineering

What are the four stages that a product passes through as it enters, gets established in, and ultimately leaves the marketplace?

-Maturity -Growth -Introduction -Decline

What are some advantages experienced by pioneer firms over later entrants?

-More likely to command a greater market share over a longer period -Establish an early market share lead -More readily recognizable to consumers

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

_______ or breakthrough products are brand new products that establish a completely new market or radically change both the rules of the competition and consumer preferences in a market.

-Pioneers

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

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

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

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

-Sales rise -Competitors increase

As a consumer, being an innovator in a given product category can mean engaging in a number of behaviors. Which behavior would best illustrate an innovator?

-Sleeping outside Best Buy for the latest game console

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

-Test marketing

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

-The product life cycle

What can marketers learn from the diffusion of innovation theory?

-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?

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

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

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

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

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

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

Products that generate enough revenue to cover the losses from other unsuccessful introductions are known as ______.

-blockbusters

A newly formed coffee company should not have much trouble finding coffee drinkers in America to purchase a new type of coffee maker. However, a company selling gear for the game of cricket might have a difficult time being successful in the United States. They would probably be more successful in India or Australia. The degree to which one's product is consistent with the needs and habits of target consumers is known as ______.

-compatibility

For many Americans, the daily ritual of having a coffee is almost automatic and assumed. The same can be said for the Chinese but with tea. For a firm that is marketing a product, this example serves as a reminder to consider the ______ of your product and its intended target market.

-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

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

When a product goes into the _______ stage of the product life cycle, it eventually exits the market.

-decline

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

True or false: Prototypes are never crafted individually.

-false

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

-form and features

In the ________ stage of the product life cycle, the product gains acceptance, demand and sales increase, and there are more competitors.

-growth

After product development, firms conduct premarket tests, which help determine _____

-how many customers will try and then continue to use it

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

During the ______ stage of the product life cycle, the product category first launches and innovators start buying products.

-introduction

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

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

-it is better than substitutes

If a company invests all its time and effort into a new product and the product fails, ______.

-it will be extremely difficult for the firm to recover

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

-laggards

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

-laggards

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

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

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

-majority

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

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

During concept testing it is important to present a brief written description to ______ to obtain their reactions to the idea(s) presented.

-potential buyers or users

A(n) _______ test is when a company shows potential customers a product or service before they actually bring it to market.

-premarket

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

-very low; essentially no

________ 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

A(n) ________ is the first physical form or service description of a new product, still in rough form, that has the same properties as the product.

-prototype

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

In order for a firm to successfully make a new product out of a competitor's product, that firm must engage in ______ to figure out how to bring an improved version to the market.

-reverse engineering

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

-risk diversification

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

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 Burger King introduced the new Whopper Bar to a limited geographical area prior to a national launch, it was engaging in ______.

-test marketing

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

Put the stages in the product life cycle in order from first to last, with the first stage at top.

1. Introduction 2. Growth 3. Maturity 4. Decline