Chapter 12 Smartbook Questions

Product development entails a variety of processes and considerations to determine which aspects of a product or service? Marketing strategy Customers and distributors Sales potential Form and features

Forms and features

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

Idea

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. cycle adoption diffusion success

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

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

Which of the following processes could be considered an acceptable method for generating ideas? 1. Conducting consumer research 2. Communicating with a firm's R&D department 3. Brainstorming within the firm 4. Researching competitors' products and services 5. Arguing with other firms and institutions

1. Conducting consumer research 2. Communicating with a firm's R&D department 3. Brainstorming within the firm 4. Researching competitors' products and services

Which of the following is a way by which risk can be diversified? A. By creating a broader portfolio of products through innovation B. By manufacturing only those products in which a firm has a competitive advantage C. By avoiding projects that are risky D. By taking up new ventures that predict high returns

A. By creating a broader portfolio of products through innovation

Which of the following questions are likely to be asked of customers during concept testing? (Choose every correct answer.) A. How often and in what quantities would the customer buy the product? B. Does the product meet a need that is not currently being satisfied? C. Does the proposed price seem like a good value? D. Would the product be used in the morning or at night?

A. How often and in what quantities would the customer buy the product? B. Does the product meet a need that is not currently being satisfied? C. Does the proposed price seem like a good value?

Which of the following factors influence how rapidly a product will move through the product life cycle? A. How valuable the product is to the consumer B. How different the product is from other offerings in the market C. The size of the producing firm's R&D budget D. The average age of the target market

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

What are the steps taken by firms that have products in the decline stage of the product life cycle? A. Target a niche segment B. Create surveys to find the problem C. Completely exit market D. Add more inventory

A. Target a niche segment C. Completely exit market

What objectives do firms have in adding new products, services, and processes to their offerings? (Choose every correct answer.) A. To satisfy the changing needs of consumers B. To attract talented employees to the firm C. To lower production costs D. To keep customers from getting bored with existing products

A. To satisfy the changing needs of consumers D. To keep customers from getting bored with exisiting products

Without innovation, what options would be available to firms? (Choose every correct answer.) A. Develop new products for current markets B. Continue to market current products to current customers C. Develop new products for new markets D. Take current products to new markets

B. Continue to market current products to current customers D. Take current products to new markets

Why might it be an advantage for a company to launch a product without test marketing it? A. Consumers respond best to products they have never heard of. B. They could get the product to market before the competition. C. They could have more time to develop expensive add-ons for the product. D. Relying on intuition is more effective than test marketing.

B. They could get the product to market before the competition.

Firms need to continue to innovate because customer needs _____. A. tend to stay constant over time B. are constantly changing C. are insignificant compared to the need to always use the newest technologies D. can be disregarded once a product is established in the market

B. are constantly changing

Which type of firm is most likely to engage in a licensing approach to R&D? A. A firm with a large in-house staff of researchers B. A firm with a high budget and plenty of time to develop new products C. A firm with a low budget and a need to get a product to market quickly D. A firm that has no interest in introducing new products

C. A firm with a low budget and a need to get a product to market quickly

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. A. look within; scan the outside B. look inside; scan the perimeter C. market scan; research the development D. R&D department; scan the market

D. R&D department; scan the market

The most important questions a marketer will ask in a concept testing scenario pertain to which of the following? A. The respondent's past purchases B. Which of the firm's competitors the respondent is most likely to purchase from C. The respondent's purchase intentions regarding the proposed product D. The respondent's general perceptions of the firm

D. The respondent's general perceptions of the firm

____ 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

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

False

What is a key characteristic of the maturity stage? Adoption of the product by early majority High prices Firms defending market share Few competitors

Firms defending market share

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 results

According to the diffusion of innovation curve, when would marketers expect to see the highest frequency of purchases for a given product or service? At the beginning of the curve Toward the end of the curve In the middle of the curve

In the middle of the curve

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

Innovation

Place each of the following categories of consumers in the order in which they adopt a product, according to the diffusion of innovation curve, beginning with the innovators at the top.

Innovators Early adopters Early majority Late majority Laggards

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 Copy existing products on the market that have significant potential for growth Read trade journals to understand what other companies in the market are pursuing Purchase the rights to products developed by overseas producers

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 new and innovative. It is less expensive than competitors. It is better than its substitutes. It is the most popular item on the market.

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. It will experience rapid growth. Its revenues will grow slowly. Its revenues will stay the same.

It will eventually decline

Product development or product design entails a process of balancing which types of considerations? Marketing Engineering Distribution Manufacturing

Marketing Engineering Manufacturing (Economic considerations as well)

Some markets demand a higher frequency of new product releases than others. In which of the following markets do sales come from new products? (Choose every correct answer.) Gardening equipment Movies Video games Over-the-counter medicines Books

Movies Video games Books

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? (Choose every correct answer.) Pampers disposable diapers in the early 1960s Amana's microwave oven in 1967 Microsoft's Bing Search Engine in 2009 Coca-Cola's New Coke in 1984

Pampers disposable diapers in the early 1960s Amana's microwave oven in 1967

_____ 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 ex. iPod

What are key characteristics of the introduction stage? (Choose every correct answer.) Buyers are abundant Profits are low Price competition is fierce Sales are high Start-up costs are high

Profits are low Start-up costs are high

What are the key characteristics of the growth stage of the product life cycle? Sales stabilize Sales rise Competitors increase Typical consumers are innovators

Sales rise Competitors increase

Which of the following is a market testing method that offers a strong predictor of product success based on actual purchasing behavior? Focus grouping Test marketing Simulated shopping Brainstorming

Test marketing

The most important questions a marketer will ask in a concept testing scenario pertain to which of the following? The respondent's past purchases The respondent's purchase intentions regarding the proposed product Which of the firm's competitors the respondent is most likely to purchase from The respondent's general perceptions of the firm

The respondent's purchase intentions regarding the proposed product

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

Adding new products is MOST likely to prompt consumers to purchase in which of the following industries? Oil and gas Writing utensils Household appliances Video games

Video games

What does a postlaunch review help determine? (Choose every correct answer.) Whether competitors should be eliminated Whether new management should be hired Whether changes to the marketing mix are needed Whether additional resources are needed Whether the launch was a success or failure

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

What is the late majority?

Will buy it after most of their friends have one

Laggards

Will not buy one until something newer has come along

What are early adopters?

Will wait a week or two and read several reviews before buying

What is the early majority?

Will wait till they are sure it works well and that they will be able to use it

What are innovators?

Would line up outside the store to be the first to buy it

The diffusion of innovation curve refers to the rate in which consumers Blank______ a given product or service. discuss repurchase sample adopt

adopt

When a product is in the ___ stage of the product life cycle, its firm will often choose between targeting a niche segment or exiting the market.

declining

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 ______. the product life cycle distribution of product inventory diffusion of innovation viral marketing

diffusion of innovation

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

diversification

Although there are numerous stages in the product development process, every firm starts to develop new products through ______ and then finishes with an evaluation of idea generation; results product deliberation; alternatives produce manifestation; alternatives idea degradation; failures

idea generation; results

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: identify new target markets. eliminate competition. increase market share. improve business relationships

improve business relationships

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

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

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 outsourced investigated researched

marketed

During the ______ stage of the product life cycle, the market for the product usually becomes saturated. maturity growth introduction indeterminate

maturity

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. introductory-stage postlaunch growth-stage prelaunch

postlaunch

If a firm has positive results from market testing, the next step will be the _____

product launch

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 ______. integrated vacant profitable saturated

saturated

When Burger King introduced the new Whopper Bar to a limited geographic area prior to a national launch, it was engaging in ______. prototype testing test marketing concept testing a premarket test

test marketing

When Subway introduced a new Southwestern Club sandwich in South Florida before launching it nationwide, it was engaging in ______. concept testing beta testing test marketing alpha testing

test marketing

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

the product life cycle

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: 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

When a product is first launched during the introduction stage, sales are usually _____ and there are _____ competitors. very low; essentially no high; numerous unprofitable; several profitable; no

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 group of consumers like the product if more prototypes would be beneficial which stage the product is in if the cost of the product is accurate

which stage the product is in