Marketing Chapter 12 Smartbook (goes with chapter 15)

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

invest heavily in research and development

Laggards make up roughly ______ of the market. a) 20% b) 10% c) 5% d) 16%

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. a) 50% b) 12.5% c) 2.5% d) 34%

34%

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

34%

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) R&D department; scan the market c) look inside; scan the perimeter d) market scan; research the development

R&D department; scan the market

Early ___ are the category of consumers who begin to use a product or service immediately following innovators.

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. a) diffusion b) cycle c) success d) adoption

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

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

are constantly changing

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

blockbusters

Which of the following processes could be considered an acceptable method for generating ideas? - brainstorming within the firm - researching competitors' products and services - conducting consumer research - arguing with other firms and institutions - communicating with a firm's R&D department

brainstorming within the firm, researching competitors' products and services, conducting consumer research, communicating with a firm's R&D department

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

by creating a broader portfolio of products through innovation

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

concept

Without innovation, what options would be available to firms? - continue to market current products to current customers - develop new products for new markets - develop new products for current markets - take current products to new markets

continue to market current products to current customers, take current products to new markets

___ 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

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 ______. a) the product life cycle b) distribution of product inventory c) viral marketing d) diffusion of innovation

diffusion of innovation

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. a) seeking b) assimilation c) transfer d) diversification

diversification

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. a) innovators b) first movers c) early majority d) early adopters e) pioneers

early adopters

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.

early majority

After a new product is launched, what is the next step of the product development process? a) evaluation of results b) pricing the product c) concept testing d) developing the advertising campaign

evaluation of results

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

false

What is a key characteristic of the maturity stage? a) firms defending market share b) high prices c) few competitors d) adoption of the product by early majority

firms defending market share

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

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

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

first

Product development entails a variety of processes and considerations to determine which aspects of a product or service? a) marketing strategy b) sales potential c) customers and distributors d) form and features

forms and features

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 industries are most likely to participate in a research consortium? - high-tech - pharmaceuticals - fast food - toys

high-tech, pharmaceuticals

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

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

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

idea (or concept)

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

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: a) improve business relationships b) eliminate competition c) identify new target markets d) increase market share

improve business relationships

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

innovation

___ are those buyers who want to be the first on the block to have a new product or service.

innovators

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.

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? a) it is the most popular item on the market b) it is better than its substitutes c) it is new and innovative d) it is less expensive than competitors

it is better than its substitutes

What will happen to a firm if it continues to produce the same products in a saturated market? a) its revenues will stay the same b) it will experience rapid growth c) it will eventually decline d) its revenues will grow slowly

it will eventually decline

During the decline stage of the product life cycle, ______ who have not yet tried the product or service will be entering the market for the first time. a) early adopters b) innovators c) laggards d) marketers

laggards

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

laggards

___ are consumers who like to avoid changes and rely on traditional products until they are no longer available. a) laggards b) crawlers c) lollygaggers d) traditionalists

laggards

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

late

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

Product development or product design entails a process of balancing which types of considerations? - marketing - manufacturing - engineering - distribution

marketing, manufacturing, engineering

During the ______ stage of the product life cycle, the market for the product usually becomes saturated. a) maturity b) indeterminate c) introduction d) growth

maturity

Some markets demand a higher frequency of new product releases than others. In which of the following markets do sales come from new products? - gardening equipment - movies - video games - over-the-counter medicines - books

movies, video games, books

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. a) growth-stage b) introductory-stage c) postlaunch d) prelaunch

postlaunch

In the context of how firms develop new products, what is the next step if a firm has positive results from market testing? a) licensing b) evaluation of results c) product designing d) product launch

product launch

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

research and development

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? a) internal research and development b) licensing c) research consortium d) outsourcing

research consortium

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

research, development (r and d)

What are the key characteristics of the growth stage of the product life cycle? - sales rise - sales stabilize - competitors increase - typical consumers are innovators

sales rise, competitors increase

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 ______. a) integrated b) profitable c) saturated d) vacant

saturated

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

six

What are key characteristics of the introduction stage? - price competition is fierce - start-up costs are high - profits are low - buyers are abundant - sales are high

start-up costs are high, profits are low

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

test marketing

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

test marketing

Which of the following is a market testing method that offers a strong predictor of product success based on actual purchasing behavior? a) test marketing b) focus grouping c) simulated shopping d) brainstorming

test marketing

___ defines the stages products move through as they enter, get established in, and ultimately leave the marketplace. a) the product development process b) the product life cycle c) diffusion of innovation d) alpha and beta testing

the product life cycle

What objectives do firms have in adding new products, services, and processes to their offerings? - to satisfy the changing needs of consumers - to attract talented employees to the firm - to lower production costs - to keep customers from getting bored with existing products

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

True/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/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? a) household appliances b) oil and gas c) writing utensils d) video games

video games

What might a concept include along with a brief written description of the product? - ideas generated - the final product - visual images - customer needs it satisfies

visual images, customer needs it satisfies

What does a postlaunch review help determine? - whether additional resources are needed - whether competitors should be eliminated - whether the launch was a success or failure - whether changes to the marketing mix are needed - whether new management should be hired

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

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

which stage the product is in