Chapter 12 SmartBook

Video games

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

Evaluation of results

After a new product is launched, what is the next step of the product development process? Pricing the product Evaluation of results Concept testing Developing the advertising campaign

16%

Laggards make up roughly ______ of the market. 20% 10% 16% 5%

Marketing Engineering Manufacturing

Select all that apply Product development or product design entails a process of balancing which types of considerations? (Choose every correct answer.) Marketing Engineering Manufacturing Distribution

Video games Movies Books

Select all that apply 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 Video games Over-the-counter medicines Movies Books

Pharmaceuticals High-tech

Select all that apply Which of the following industries are most likely to participate in a research consortium? (Choose every correct answer.) Pharmaceuticals High-tech Fast food Toys

introduction

The _____ stage of the life cycle for a new product or service category usually starts with a single firm, and innovators are the ones to try the new offering.

concept

A _____ is a written description of a product and its technology and is presented to potential buyers or users to obtain their reactions.

improve business relationships.

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

Research consortium

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? Outsourcing Internal research and development Licensing Research consortium

Blank 1: research or R Blank 2: development or D

A firm's _____ and _____ department consists of scientists who work to solve complex problems and develop new ideas. (Do not abbreviate answer)

Blank 1: life

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.

early adopters

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. Multiple choice question. first movers pioneers early adopters innovators early majority

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

Click and drag on elements in order Put the stages in the product life cycle in order from first to last, with the first stage at top.

1. Idea generation 2. Concept testing 3. Product development 4. Market testing 5. Product launch 6. Evaluation of results

Click and drag on elements in order The product development process can be diagrammed as a sequential process. Place the stages in order, with the first stage at top.

adopters

Early _____ are the category of consumers who begin to use a product or service immediately following innovators. (Remember to type only one word in the blank.)

It is better than its substitutes.

Firms can highlight a product's relative advantage, which refers to which perception among consumers about the product? It is less expensive than competitors. It is better than its substitutes. It is new and innovative. It is the most popular item on the market.

are constantly changing

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

Invest heavily in research and development

Hightower Industries wants to be a pioneering firm in the robotics and artificial intelligence industry. Which strategy is the company most likely to pursue? Copy existing products on the market that have significant potential for growth Invest heavily in research and development Purchase the rights to products developed by overseas producers Read trade journals to understand what other companies in the market are pursuing

Blank 1: product Blank 2: launch

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

licensing

In a ______ agreement companies buy the rights to use technologies from another company. licensing joint venture technological scientific franchising

R&D department; scan the market

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

postlaunch

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. growth-stage postlaunch prelaunch introductory-stage

first

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

marketed

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 ______. investigated outsourced researched marketed

saturated

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 ______. profitable integrated saturated vacant

adoption

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 cycle success diffusion

decline

Once a product stops generating sales or profits, or sales and profits are very low, the product is in the _____ stage of the product life cycle and eventually exits the market.

diversification

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

Form and features

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

blockbusters

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

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

Select all that apply 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 Coca-Cola's New Coke in 1984 Amana's microwave oven in 1967 Microsoft's Bing Search Engine in 2009

Maturity Growth Introduction Decline

Select all that apply 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 Laggard

Sales rise Competitors increase

Select all that apply What are the key characteristics of the growth stage of the product life cycle? (Choose every correct answer.) Typical consumers are innovators Sales rise Sales stabilize Competitors increase

Which markets are likely to be most receptive to new products or services The rate at which consumers are likely to adopt a new product or service

Select all that apply What can marketers learn from the diffusion of innovation theory? (Choose every correct answer.) Which markets are likely to be most receptive to new products or services The length of the product life cycle in a given industry The rate at which consumers are likely to adopt a new product or service The amount of time before a competitor releases a similar product

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

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

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

Select all that apply Which of the following factors influence how rapidly a product will move through the product life cycle? (Choose every correct answer.) The size of the producing firm's R&D budget The average age of the target market How valuable the product is to the consumer How different the product is from other offerings in the market

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

Select all that apply Which of the following processes could be considered an acceptable method for generating ideas? (Choose every correct answer.) Communicating with a firm's R&D department Researching competitors' products and services Brainstorming within the firm Arguing with other firms and institutions Conducting consumer research

Continue to market current products to current customers Take current products to new markets

Select all that apply Without innovation, what options would be available to firms? (Choose every correct answer.) Develop new products for new markets Develop new products for current markets Continue to market current products to current customers Take current products to new markets

creativity

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 ______. profiting debating research creativity

Blank 1: advantage

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.

Blank 1: early Blank 2: majority

The _____ _____ of users representing approximately 34 percent of the population on the diffusion of innovation curve is crucial because few new products and services can be profitable until this large group buys them. (Enter one word in each blank.)

Blank 1: introduction, introductory, or intro

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.

Blank 1: maturity or mature

The _____ stage of the product life cycle is characterized by the adoption of the product by the late majority and good profitability. (Remember to type only one word in the blank.)

research and development

The ______ department can be considered an investment into a company's future, in which scientists work to solve problems and develop new ideas. mergers and acquisitions research and development diversification research and innovation

34%

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% 12.5% 2.5% 50%

which stage the product is in

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

diffusion of innovation

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 diffusion of innovation distribution of product inventory viral marketing

Blank 1: introduction, intro, or introductory

The stage of the life cycle for a new product or service category usually starts with a single firm, and innovators are the ones to try the new offering.

diffusion of innovation

The theory that helps marketers understand the product or service adoption rates of consumers is called ______. diffusion of innovation consumer life cycle product pickup propensity (PPP) distribution of consumer adoption

laggards

Those consumers who enter the market for the first time during the decline stage are known as ______. late adopters laggards late majority innovators

True

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.

False

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

Blank 1: growth or growing

Usually, during the _____ stage of the product life cycle, the typical consumers are early adopters, and there are increases in the number of competitors.

Firms defending market share

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

Customer needs it satisfies Visual images

What might a concept include along with a brief written description of the product? (Choose every correct answer.) Customer needs it satisfies Visual images The final product Ideas generated

It will eventually decline.

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 stay the same. Its revenues will grow slowly.

test marketing

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

Blank 1: brainstorming, brain storming, or brainstorm

When a group works together to generate a number of ideas and then determines which is the best idea, this is referred to as _____.

Blank 1: decline, sales decline, or decline stage

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

six

When firms decide to develop new products, it is typically a long process that is broken into ______ stages. one four two six

Blank 1: late

When the _____ majority of consumers enters the market, the market reaches its full market potential.

Test marketing

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

The ideas that receive the most votes go to the next stage.

Which of the following is a possible advantage for a firm that chooses to use brainstorming for its new products as opposed to other idea generation methods? Brainstorming is one of the most expensive options available. The ideas that receive the most votes go to the next stage. The firm can immediately decide whether to accept or reject an idea. It can be accomplished by a single employee.

By creating a broader portfolio of products through innovation

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

A test kitchen at a fast food restaurant

Which of the following is an example of a research and development effort? A test kitchen at a fast food restaurant An agreement to market another firm's products A call center where workers offer product support to customers A retail store where the firm offers trials of new or upcoming products

Firms expect that a few highly successful products will cover the costs of the entire R&D effort.

Which of the following statements about firms' expectations regarding the success of internal research and development efforts is true? Firms expect that every product developed by in-house researchers will be profitable. Firms expect that a few highly successful products will cover the costs of the entire R&D effort. Firms do not track the profitability of their R&D efforts because some research pays off many years later. Firms expect to lose money on R&D in the long run but consider it an advertising expense.

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

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 A firm that has no interest in introducing new products A firm with a high budget and plenty of time to develop new products A firm with a large in-house staff of researchers

34%

While late to the party, the late majority category of consumers is still significant, making up roughly ______ of the total consumer market. 50% 13% 16% 34%

innovator; early adopter

While the ______ is first to adopt the item, the ______ adopts next. innovator; creator innovator; early adopter early adopter; innovator early adopter; creator early adopter; early majority

Blank 1: Idea or Concept

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

Blank 1: Licensing

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

Blank 1: Innovation or Inovation

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

Blank 1: Outsourcing

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

Diffusion

_____ 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. (Enter one word in each blank.)

pioneers

_____ 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.

Blank 1: Brainstorming or Brainstorm

_____ refers to a group session in which participants work together to generate new ideas. (Enter one word in the blank.)

Laggards

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

The product life cycle

______ defines the stages products move through as they enter, get established in, and ultimately leave the marketplace. The product life cycle Alpha and beta testing Diffusion of innovation The product development process