Marketing 370 Ch 12
Now that the consumer demand is building for Miranda's new organic shampoo, she and her team face a new set of decisions. Which of the following is NOT one of the decision items on the agenda for the team discussion of Place in the marketing mix for a new product launch?
Are the packaging colors working well with the target markets?
________________ is the process by which ideas are transformed into new products and services that will help firms grow.
Innovation
Whenever Donald considers upgrading his personal computer system, he consults with Jeremy, a knowledgeable friend who always has the newest technology. For Donald, Jeremy is a(n) ___________ in the diffusion of innovation curve.
Innovator
The product life cycle is theoretically ________ shaped with regard to sales and profits.
bell
If a few of Nintendo's customers are asked to try out a new video game that has not yet been released on the market, this is an example of
beta testing
One reason auto companies spend millions on racing cars is that they offer the opportunity to test new designs and technology under extreme conditions. Car racing provides an opportunity for
beta testing
The pharmaceutical industry often justifies the high prices for new drugs by arguing that they research as many as one hundred new compounds before they come up with one ______________, an extremely successful product that pays for the costs associated with the other attempts to develop new products.
blockbuster
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
If they create new markets, pioneer or breakthrough products
can add tremendous value to the firm
In many cases, pioneers lose their market lead and initial market share to imitators who
capitalize on the pioneers weakness
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
beta testing
conducted by consumers likely to use the product
By adding new product lines beyond its core business of computer software, like the Zune MP3 player 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 customers when installing their products. This close contact often creates new product ideas through
customer input
During the ________________ stage of the product life cycle, firms either position themselves for a niche market of loyal consumers or they exit the market.
decline
The process by which the use of a new product or service spreads throughout a market group is referred to as
diffusion of innovation
Alpha testing
done by employees
If the _____________ diffusion of innovation group is relatively small, the number of people who ultimately adopt the innovation likely will also be small.
early adopter
Robin recently bought Voice over Internet protocol (VOIP) phone service (phone service delivered over the Internet). A few of Robin's friends bought VOIP before she did, but many other friends were interested in Robin's opinions of the new phone service. Robin is a(n) ________________ in this product category.
early adopter
As soon as she saw one, Hillary wanted a flat-screen television, but she was worried about making the wrong choice. She waited until there were many alternatives in the market with lower prices and improved quality. Hillary is part of the __________ diffusion of innovation group.
early majority
The ________________ diffusion of innovation group is crucial because few new products can be profitable until this large group buys them.
early majority
One of the potential benefits to a firm of introducing new-to-the-world products or services is:
establishing a completely new market
Successful first movers create a market or a product category. They often benefit from being readily recognizable to consumers and
establishing an early market share lead
Which of the following is NOT a stage in the product life cycle?
evaluation
Which of the following is LEAST likely to be a source of ideas for new products?
geodemograpic segmentation
During the _______ stage of the product life cycle, there are few but an increasing number of competitors.
growth
During the _____________ stage of the product life cycle, sales rise, profits rise rapidly, and there are a small but increasing number of competitors.
growth
When Toyota introduced hybrid cars, there were waiting lists to buy them. Then Honda and a few other manufacturers entered the market, shifting the product life cycle for hybrid cars into the _____________ stage of the product life cycle.
growth
Concept testing is important because it can
help a firm avoid the costs of unnecessary product development
Innovators are a critical group of new product adopters because they
help the product gain market acceptance
blockbuster
highly successful product which can fund attempts to develop other products that were unsuccessful
maturity phase characteristics
intense price competition, marketing costs increase as firms defend their market share, the market may become saturated, firms consider entry into a new market
___________________ are special incentives offering reduced prices for a limited time, offered to retailers to get them to try a new product.
introductory price promotion
The CEO of David's firm just came back from a business seminar, and he called David into his office. He stated, "I just found out about the product life cycle curve in a strategy seminar. This is a great tool. I want you to drop whatever you're doing and inventory all of our products to determine exactly where they are in the product life cycle." David needs to think fast for a good answer because he knows that
it is often impossible to identify with precision where a product is in the product life cycle.
Computer game companies constantly monitor computer game-related blogs keeping track of the latest hot products, because they know that their customers crave the "latest and greatest" games. They use this information to create new products that primarily provide the benefit of
keeping up in a world where sales come mostly from new product
Bob and George live in the United States. Bob recently asked for George's cell phone number, but George said he didn't have one. George would probably be considered a(n) _________________ in the diffusion of innovation process. laggard
laggard
When John began helping his favorite uncle Burton with his finances, he discovered his uncle was still renting a rotary-dial telephone from the phone company. Uncle Burton had paid thousands of dollars in rental fees over the previous forty years. Uncle Burton is a(n) ______________ in the diffusion of innovation process for telephones.
laggard
Which of the following is NOT a characteristic of products in the maturity stage of the product life cycle?
laggards are a major focus of marketing efforts
By the time BMW got into the mini-SUV market, sales had leveled off and were even starting to decline. BMW had to target its marketing efforts toward the _________________ diffusion of innovation group.
late majority
The _________________ diffusion of innovation group is the last large group of consumers to adopt a new product or service.
late majority
When microwaves were new, they often cost over $300, were huge, and were had numerous settings and options. Brenda and Bart waited, concerned about potential health hazards and wishing for more choices in the market. By the time they purchased a microwave, sales of microwaves had leveled off and prices had declined significantly. Brenda and Bart were part of the ______________ diffusion of innovation group.
late majority
Which of the following adopter categories refers to the last large group of buyers to enter a new product market?
late majority; last LARGE group of buyers
Ron sells commercial-grade tools to building contractors. Whenever he visits his customers, he looks to see if they are using his tools for other tasks or have modified the tools for some other purpose. These customers are ____________, who can provide ideas for new and improved products.
lead users
___________________ are customers who modify existing products according to their own ideas to suit their specific needs.
lead users
test marketing
limited product test in a specific geographic area
introduction phase
low sales, small or negative profit, usually attracts innovators
The ______ is a specific price at which manufacturers encourage retailers to sell a product.
manufacturers suggested retail price MSRF
Eric is a sales rep for an established building materials manufacturer. Business is good, but he is concerned that the company has spent little on new product development and has not created a new product in over five years. Without new products, Eric can only market to his current customers or
market the same products to similar customers
By the time BMW and Mercedes Benz entered the mini-SUV market, there were many competitors, sales had peaked, and profits were declining. These firms entered the market during the ______________ stage of the product life cycle.
maturity
During the _____________ stage of the product life cycle, sales peak and profits begin to decline as competition becomes intense.
maturity phase
One of the key characteristics of brainstorming sessions is
no idea is immediately accepted of rejected
Even if the succeed, new to the world products are
not adopted by everyone at the same time
Many home design businesses volunteer to provide their latest products for tours-of-homes fundraisers because they know their new products will benefit from
observability
For new product marketers, early adopters are important because they tend to be
opinion leaders
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 Eiger Labs MPMan was the first mass-produced MP3 player sold in the United States. Eiger Labs was a(n) _______ in the MP3 player market.
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
Lorraine belongs to a national consumer panel created by a market research company. She regularly receives samples of new products from a variety of firms and fills out questionnaires about the products. The national consumer panel Lorraine is part of is engaged in
premarket testing
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
premarketing testing
Between concept testing and market testing, a firm should engage in which stage of the product development process?
product development
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
Before the development of computer-assisted design software, many firms handcrafted ______, wooden or clay models that served as rough physical representations of the new product.
prototypes
Which of the following is NOT one of the benefits to a firm of new product development?
reduced costs of production
Some products may stay comfortably in the maturity phase of the product life cycle often until a new product emerges to replace them. An example of such a mature product is
refrigerators
Early personal computer users remember the cumbersome, user-unfriendly "DOS" system. When Apple introduced System 1 and Microsoft introduced Windows, both of which were much easier to use, these new products diffused rapidly because of their
relative advantage
Inkjet personal computer 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
___________________ involves taking apart a product, analyzing it, and creating an improved product that does not infringe on the competitor's patents.
reverse engineering
growth phase
rising sales, profits, and increasing number of competitors
When Dr. Putt invented his Eye-Over-the-Ball (EOB) golf putting device, he knew during the introductory stage
sales would be low and profits nonexistent, but he would attract golf equipment innovators
premarket testing
sampling surveys & surveys are usually combine to collect consumer reactions to product
Many restaurants offer daily specials, appetizers, entrees, and desserts not listed on their standard menu. These daily specials primarily provide the new product benefit of
satisfying the changing needs of current and new customers
When testing new products, most firms consider the question of whether testing products on animals
should be done when the new product does not contribute to the health and well being of human users
A(n) __________________ is a fee paid by manufacturers to get new products into stores or to gain more or better shelf space for products.
slotting allowance
Brian is trying to sell a new line of ultrasound imaging equipment. Unlike existing technology, these machines are compact, creating the potential for general practice physicians to have and use them in their offices. Brian is trying to identify innovators in his market, knowing these customers will
spread positive word of mouth to other physicians
Which of the following would NOT be part of the launch of a new product?
starting to make preliminary decisions about the target market
A marketing professor in Ithaca, New York maintains a museum of failed consumer products. Most new products in this museum failed during the _______________ stage of new product development, when they are introduced to a limited geographical area.
test marketing
When McDonald's comes up with a new drink or sandwich for its fast food stores, it often markets it in a dozen or so of its outlets. When the company does this, it is engaged in
test marketing
A major limitation in the use of internal R&D departments for new idea generation is
the costs tend to be quite high
Which of the following was NOT a new-to the-world product or service when it was introduced?
the mercedes mini sport utility vehicle
The diffusion of innovation theory focuses on
the rate at which consumers are likely to adopt a new product or service.
Early personal computers cost several thousand dollars, allowing competitors
to introduce lower price alternatives
When a manufacturer launches a new product, it may offer _________ to wholesalers and retailers, including introductory price promotions, special events, and personal selling.
trade promotions
What type of event exposes retailers to large numbers of new products in a concentrated location?
trade shows
Samples are often used for new products when _________________ will influence the diffusion of the product.
trialability
Zappos.com, an online shoe store, worked to overcome the problem of new product ______________ with its easy, no hassle return procedure.
trialability
Microsoft's Windows operating system continues to dominate the market, even though it has been around for over twenty years. Windows will likely remain in the maturity stage of the product life cycle
until a superior product comes along to replace it
At the end of a brainstorming session, participants are often asked to:
vote on the best ideas
When automobile manufacturers introduced SUVs, they distributed and promoted them in the United States, but not in Europe where gasoline is heavily taxed and roads are much smaller. Car manufacturers recognized that this new line of cars
were not compatible with European market conditions.
When conducting exploratory research for her firm's new Internet anti-piracy software, Dee knows the most important question is
whether or not respondents would purchase the software if it becomes available
Kristina created a virtual prototype of her new line of swimwear on a website to show to consumers. Kristina will ask consumers what they think of the clothing, but the most important question is
whether or not they would purchase the swimwear if it becomes available.
Beverly is assessing the results of a new product launch of a series of e-books for her bookstore. When evaluating the results, Beverly will likely consider all of the following EXCEPT
why it took her so long to consider the new product line.
Barbara is using a test model of her firm's new inline skates to see if they work according to the design specifications. Barbara is involved in:
alpha testing
Before Segway manufactured their two-wheeled people movers, they built a prototype and had staff engineers test it for performance and stability. At this stage, Segway was involved in
alpha testing
Which of the following is the correct sequence of new product adopters in the Diffusion of Innovation Curve?
Innovators, Early adopters, Early majority, Late majority, Laggards
5 groups in the diffusion of innovation curve
Innovators, early adopters, early majority, late majority, and laggers
Source of ideas for new products
Internal R&D, R&D consortia, licensing, outsourcing, competitors products, consumer research, and brainstorming
During the _____________ stage of the product life cycle, sales are low and profits are small or negative.
Introduction
4 product life cycle stages
Introduction, growth, maturity, decline
The growth phase of the product life cycle is always dynamic. Which of the following does NOT occur in this phase?
Price competition with protracted price wars erodes profits. (more likely in the maturity phase)
