mgmt 323 ch.12
innovators on the diffusion of innovation curve usually stay well informed about the product category. which of the following are the most likely ways an innovator might keep up-to-date about new developments in 3d televisions?
-attend the annual consumer electronics show to see the newest models -participate in a discussion forum about new tv technology
which of the following processes could be considered an acceptable method for generating ideas?
-communicating with a firm's r&d department -researching competitors' products and services -brainstorming within the firm -conducting consumer research
why is it important for a company to determine how complex its products are?
-complex products are more difficult for customers to try before buying -the manufacturer might need to provide displays where people can try the product
without innovation, what options would be available to firms?
-continue to market current products to current customers -take current products to new markets
during test marketing, the potential elements of the marketing mix that may be used include which of the following?
-coupons -advertising
which of the following traits are associated with the innovators consumer group?
-highly knowledgeable (about the product/service) -risk takers
which of the following questions are likely to be asked of customers during concept testing?
-how often and in what quantities would the customer buy the product? -does the proposed price seem like a good value? -would the customer buy the product as a gift?
product development or product design entails a process of balancing which types of considerations?
-manufacturing -marketing -engineering
which of the following are major reasons for product failures in the market?
-poor positioning of the product -targeting the wrong market segment -neglecting to do appropriate product testing
key characteristics of the introduction stage are that ___
-profits are low -start-up costs are high
when firms measure the success of a new product, their assessment includes three factors:
-satisfaction of financial requirements -the extent of acceptance by consumers -satisfaction of technical requirements
which of the following are disadvantages of test marketing in comparison to premarket tests?
-test marketing costs more -test marketing takes longer to carry out
early adopters, although not as fast as innovators, are quick to purchase a new product or service. identify all of the following characteristics that are typically associated with early adopters.
-they tend to be opinion leaders of particular product categories -they are less risk seeking than innovators
some markets demand a higher frequency of new product releases than others. in which of the following markets does this demand apply?
-video games -movies -clothing
concept testing can be as simple as a brief written description of the product that might also include ____
-visual images -customer needs it satisfies
while early adopters are crucial to the success of a new product, they still only make up a relatively small percentage of the total consumers in a given product market. this percentage is approximately how big?
13.5%
while innovators are crucial to the success of a new product or service, this category of consumers is actually very small. approximately what percentage of a total market does this category of consumers represent?
2.5%
while late to the party, the late majority category of consumers is still significant, making up roughly ___ of the total consumer market
34%
crucial to the success of new products are early ___, who are responsible for influencing the final three categories of consumers to purchase the product
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
relative ___ deals with perception among consumers that a product is better than its substitutes
advantage
when ben & jerry's ice cream tests all of its new flavors on its own employees at its corporate headquarters in vermont, it is engaging in what kind of testing?
alpha testing
firms need to continue to innovate because customer needs ____
are constantly changing
during the product development process a firm uses ___ testing, in which potential consumers examine the product prototype in a "real use" setting to determine its functionality, performance, potential problems, and other issues specific to its use
beta
if a firm produces a visual image of an imagined or projected product to bring an idea to life, this is an example of ___ testing
concept
through the effective use of ___ testing, firms may be able to avoid the high costs of product development for the product ideas that do not meet customers' expectations
concept
r&d ___ are groups of firms and institutions who collaborate to do research and development
consortia
innovators are those who must be first on the block to have a new product or service. identify who can be considered an innovator
consumers
while product development costs are very high for firms in r&d departments, they are not always expected to produce a successful new product. a firm might lose money in the short term, but because r&d departments are viewed as ___, the firms hope that they will be profitable in the long term
continuous investments
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
managers can use the product life ___ concept to help predict what pricing, product, promotional, and placement strategies they should employ at each of the four stages
cycle
during the ___ stage of the product life cycle, the few laggards who have not yet tried the product will be entering the market for the first time
decline
___ ___ are the category of consumers who begin to use a product or service immediately following the innovators
early adopters
using a new smart phone as an example, match each consumer category with the most probable action it would take with regard to buying the device
innovators-would line up outside the store to be the first to buy it early adopters-will wait a week or two and read several reviews before buying early majority-will wait till they are sure it works well and that they will be able to use it late majority-will buy it after most of their friends have one laggards-may never buy one; if they do, it may not happen until something newer has come along
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
put the stages in the product life cycle in order from first to last, with the first stage at top
introduction, growth, maturity, decline
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
___ are consumers who like to avoid changes and rely on traditional products until they are no longer available
laggards
in the ___ user approach to customer input for developing new products, a company studies how innovative product users modify existing products for their needs
lead
purchasing a coffee from a coffee shop, for example, is a ___ purchase decision than purchasing a cell phone from a large retail store
less complex
a useful tool used by managers is the product ___ ___, which helps to analyze the types of strategies that may be required over the life of a product
life cycle
the product ___ ___ concept has been proven to be a valid idea, and new analytical tools now provide "rules" for detecting points in the cycle
life cycle
the early ___ represents the earlier half of the two largest categories of consumers on the diffusion of innovation curve
majority
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
during the ___ stage of the product life cycle, industry sales reach the peak, so firms try to rejuvenate their products by adding new features or repositioning them
maturity
licensing typically occurs most frequently with products that are __ and __ and have complex patents and copyrights
scientific; technological
by the time the late majority enters the market, sales tend to ___
stabilize or decline slightly
on the basis of the research gathered on consumer perceptions, the tests it has conducted, and competitive considerations, the firm confirms its ___ market and decides how the product will be positioned
target
when burger king introduced the new whopper bar to a limited geographical area prior to a national launch, it was engaging in ___
test marketing
premarket tests involve ___
tests conducted before a product or service is brought to market to determine how many customers will try and then continue to use it
one of the most critical elements of success in new product launches is ___ the introduction such as scheduling the release of a movie to match school holidays
timing
true or false: since test marketing costs are high, a company may choose to launch a new product without extensive test marketing and instead rely on instinct
true
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
despite market saturation, firms are constantly introducing products with new and improved features or in order to gain market share against intense ___
competition
when a product goes into the ___ stage of the product life cycle, it eventually exits the market
decline
when a product is in the last, or ___ stage of the product life cycle, its firm will often choose between targeting a niche segment or exiting the market
decline
a firm's research and ___ department consists of scientists who work to solve complex problems and develop new ideas
development
the theory that helps marketers understand the product or service adoption rates of consumers is called ___
diffusion of innovation
which diffusion of innovation adopter group waits until the "bugs" are worked out of a particular product, in order to avoid risk, but still purchases within the first half of all adopters?
early majority
true or false: prototypes are never crafted individually
false
apple created an entirely new brand that started with the ipod and evolved into different product categories 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
during the ___ stage of the product life cycle, the market for the product usually becomes saturated
maturity
not every product makes it through the life cycle to the last two stages of the PLC to reach stage three (____) or stage four (decline)
maturity
___ or breakthrough products are brand new products that establish a completely new market or radically change both the rules of competition and consumer preferences in a market
pioneers
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 intense competition, a firm needs constant innovation and product ___ to defend its market share from competition
proliferation
___ refers to a group session in which participants work together to generate new ideas
brainstorming
when a group works together to generate a number of ideas and then determines which is the best idea, this is referred to as ___
brainstorming
depending on the product category, the time element of the diffusion curve varies. for some product categories, the time it takes to get from innovators to laggards to purchase a product is shorter. which of the following would be expected to have the shortest time frame for full diffusion?
children's toys
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
using the ___ theory, a firm can predict which types of consumers will buy a new product or service immediately after its introduction and which consumers will buy it later, once the product is more widely accepted by the market
diffusion of innovation
during the ___ stage of the product life cycle, firms attempt to reach new consumers by studying their preferences and producing many competing and different product variations
growth
in the ___ stage of the product life cycle, the product gains acceptance, demand and sales increase, and there are more competitors
growth
match the stage of the product life cycle with the relative level of profitability typically observed
growth-rapidly rising maturity-peaking or beginning to decline decline-dropping introduction-low or negative
the product development process can be diagrammed as a sequential process. place the stages in order, with the first stage at top
idea generation, concept testing, product development, market testing, product launch, evaluation of product's success
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
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
if a firm has a positive result from the market testing the next step is known as ___ launch
product
a good or service may pass through many stages as it establishes itself in the marketplace. marketing managers refer to this as the ___ ___ cycle
product life
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
___ 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
whenever we see a copycat consumer good appearing for sale in grocery or drugstore products, we know that some other firm has successfully ____ engineered a previous firm's product
reverse
as industry sales increase, profits in the growth stage will ___ because of the economies of scale associated with manufacturing and marketing costs
rise
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
while pioneers capture an early and commanding market share, ___ often enter the market, capitalize on the pioneer brand's weaknesses, and subsequently gain advantage in the market
imitators
___ are buyers of a product or service who are the first ones to adopt it
innnovators
entry into a ___ market may emerge through simple product design changes. for example clorox has added pre-moistened armor all wipes to its do-it-yourself car cleaning line
new
during the growth stage of the product life cycle, the market often becomes more segmented. consumers' preferences can be addressed by adding variations of the product such as different colors, styles, or features, which can lead a successful firm to have ___ sales
increased
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
place each of the following categories of consumers in the order in which they adopt a product, beginning with the innovators at the top
innovators, early adopters, early majority, late majority, laggards
using a new movie as an example, match each consumer category with the most probable action it would take with regard to viewing the movie
innovators-would sleep overnight outside the movie theater just to be one of the first to see it early adopters-will go to the movie theater to see it a week after release and after consulting several reviews early majority-will view the movie at a discount-price theater or rent the dvd the first week it is available late majority-will view the movie on a premium cable tv channel or put it low on their netflix queue laggards-will watch the movie once it is on tv-or possibly never
