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Which of the following is the correct sequence of new product adopters in the diffusion of innovation curve? A. innovators, early adopters, early majority, late majority, laggards B. early adopters, early majority, innovators, late majority, laggards C. innovators, early majority, early adopters, innovators, late majority, laggards D. early majority, late majority, early adopters, innovators, laggards E. innovators, late majority, early adopters, early majority, laggards

A

Bob and George live in the United States. Bob recently asked for George's cell phone number, but George said he didn't own a cell phone. George would probably be considered a(n) __________ in the diffusion of innovation process. A. innovator B. laggard C. late majority adopter D. early majority adopter E. early adopter

B

During the introduction stage of a product's life cycle, typical consumers are A. early adopters. B. innovators. C. pioneers. D. early majority. E. laggards.

B

Even if they succeed, new-to-the-world products are A. generally not profitable. B. not adopted by everyone at the same time. C. not capable of creating new markets. D. not subject to the law of first movers. E. typically very short-lived.

B

Firms can measure the success of a new product by all of the following factors except A. satisfaction of its technical requirements. B. fewer competitors in the market. C. satisfactory sales and profits. D. customer acceptance. E. satisfactory performance.

B

How is consumer panel data collected during the test marketing phase of a new product introduction? A. Panelists complete a questionnaire about the product. B. Panelists scan their receipts on a home scanning device. C. Stores provide sales data to companies. D. Consumers voluntarily go to a website to record their preferences. E. Focus groups are held in key markets.

B

If a new product concept gets positive evaluations from potential customers during concept testing, the next step for a firm is A. market testing. B. product development. C. brainstorming. D. reverse engineering. E. launching of the product.

B

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. A. relative positioning B. compatibility C. observability D. complexity E. trialability

B

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 A. keeping up in a market where sales come mostly from new products. B. satisfying the changing needs of current and new customers. C. avoiding market saturation from products that have been on the market for a long time. D. creating diversification and reducing risk. E. reduction in cost of ingredients.

B

Which of the following is not one of the five groups in the diffusion of innovation curve? A. Innovators B. Non-adopters C. Late majority D. Early majority E. Early adopters

B

Which of the following was not a new-to-the-world product or service when it was introduced? A. Wi-Fi B. the Mercedes mini sport utility vehicle, a smaller version of its larger SUVs C. Microsoft's Windows operating system D. the MP3 player E. flat-screen TVs

B

__________ involves taking apart a product, analyzing it, and creating an improved product that does not infringe on the competitor's patents. A. Reverse innovation B. Reverse engineering C. Selective dissection D. Redistribution E. Creative destruction

B

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 geographic area. A. pretesting B. product launch C. test marketing D. product development E. concept testing

C

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 A. test marketing. B. product launch. C. alpha testing. D. target marketing. E. concept testing.

C

Before the development of computer-assisted design software, many firms handcrafted __________, wooden or clay models that served as rough physical representations of a new product. A. premarket tests B. blockbusters C. prototypes D. storyboards E. designer models

C

During the __________ stage of the product life cycle, sales peak and profits begin to decline as competition becomes intense. A. introduction B. leveling C. maturity D. growth E. decline

C

One of the potential benefits to a firm of introducing new-to-the-world products or services is A. cost savings. B. late majority marketing. C. establishment of a completely new market. D. the ability to avoid paying pioneers for new product development. E. the ability to capitalize on existing consumer preferences.

C

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. A. laggards B. market testers C. lead users D. reverse engineers E. concept testers

C

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. A. blockbuster B. early adopter C. pioneer D. market tester E. concept tester

C

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 alternatives in the market with lower prices and improved quality. Hillary is part of the __________ diffusion of innovation group. A. innovator B. laggard C. late majority D. early majority E. early adopter

D

At the end of a brainstorming session, participants are often asked to A. identify the worst ideas. B. defer to management for the final decision. C. identify which ideas each person proposed. D. vote on the best ideas. E. propose one more new idea each.

D

By adding new product lines beyond its core business of computer software, like the Surface Pro tablet and Xbox 360 game system, Microsoft primarily benefits by A. keeping up in a market where sales come mostly from new products. B. satisfying the changing needs of the technological research staff. C. avoiding market saturation from products that have just been introduced to the market. D. creating diversification and reducing risk. E. spreading out production costs.

D

When Dr. Putt invented his Eye-Over-the-Ball (EOB) golf putting device, he knew during the introductory stage A. sales would rise quickly, profits would jump, and even laggards would buy his product. B. sales would level off, profits would decline, and mature golfers would be attracted to his product. C. sales would slow down, profits would peak, and early adopters of golf equipment would be his major customers. D. sales would be low and profits nonexistent, but he would attract golf equipment innovators. E. sales would be low, profits would be high, and all potential golfers would jump at the opportunity to buy his product.

D

A major limitation in the use of internal R&D departments for new idea generation is A. the natural conflict R&D has with adhering to the firm's mission. B. that R&D departments tend to be dissolved once sufficient ideas have been generated. C. that the bureaucracy associated with R&D departments limits the generation of ideas. D. that R&D scientists develop ideas that are impractical to produce. E. the costs associated with an internal R&D department tend to be quite high.

E

As a promotion technique, samples are often used for new products when __________ will influence the diffusion of the product. A. relative advantage B. compatibility C. observability D. complexity E. trialability

E

As it pertains to the diffusion of innovation, if the __________ group is relatively small, the number of people who ultimately adopt the innovation likely will also be small. A. innovator B. laggard C. late majority D. early majority E. early adopter

E

During the ___________ stage of the product life cycle, firms either position themselves for a niche market of loyal consumers or they exit the market. A. introduction B. leveling C. maturity D. growth E. decline

E

In the United States, most consumer packaged goods found in grocery and discount stores are in the __________ stage of the product life cycle. A. growth B. pioneer C. introduction D. decline E. maturity

E

Paul listens to music on his iPod and iPhone, but he still buys vinyl records at his local music store on occasion, although they are getting harder to find. Vinyl records are in the __________ stage of the product life cycle. A. introduction B. growth C. evaluation D. maturity E. decline

E

Robin recently bought Voice over Internet Protocol (VoIP) phone service. 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. A. innovator B. laggard C. late majority adopter D. early majority adopter E. early adopter

E

When Glenn asked a few of his regular customers to test his prototype surfboard, he was engaging in alpha testing

FALSE Alpha testing involves testing within the company's R&D department involving current employees. Beta testing uses potential customers to examine the product prototype in a real-use setting

The maturity phase of the product life cycle is characterized by greatly reduced competition

FALSE Competition intensifies in the maturity phase, because the only way a firm can gain customers is typically to take them away from the competition

On the diffusion of innovation curve, the first group of buyers who want to be the first on the block to have the new product are known as early adopters

FALSE Early adopters are the second group of adopters of an innovation; innovators come first.

The diffusion of innovation curve follows the following sequence: innovators, early majority, early adopters, late majority, and laggards

FALSE The diffusion of innovation curve generally follows a bell-shaped curve made up of innovators, early adopters, early majority, late majority, and laggards

One of the key characteristics of brainstorming sessions is that bad ideas should be immediately rejected so the group can focus its attention on good ideas

FALSE The purpose of brainstorming is to generate a large number of ideas without filtering, so no ideas should be immediately rejected

Although innovation strategies may not work in the long run, overriding short-term reasons compel firms to introduce new products and services.

FALSE The statement is backward. Innovation strategies focus on long-term objectives, which sometimes do not work in the short run

New-to-the-world products that create new markets can add tremendous value to firms

TRUE Although new-to-the-world products can carry with them significant risk, they also offer tremendous opportunities to add value

When the iPad Mini came out, Sasha spent the night in front of the store so she could get one before any of her friends. According to the diffusion of innovation, Sasha is an innovator

TRUE Innovators are those buyers who want to be the first on the block to have the new product or service

To determine if a new product is commercially viable, a firm can conduct premarket testing

TRUE Premarket testing exposes a small number of potential customers to the marketing mix variables; they are given the product to try and then are surveyed to evaluate their likelihood of buying/using the product again

The introduction stage of the product life cycle is characterized by negative or low profits.

TRUE The introduction stage 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

Even if products succeed, not all consumers adopt new-to-the-world products at the same time

TRUE The number of users of an innovative product or service spreads through the population over a period of time and generally follows a bell-shaped curve (called the diffusion of innovation curve

When consumers see their friends using an innovation, it often persuades them to try it too

TRUE This refers to observability. When products are easily observed, their benefits or uses are easily communicated to others, which enhances the diffusion process

The fact that the Apple iPad is easy to try—demo units are available at Apple stores as well as other retail stores—is helping it diffuse more quickly

TRUE This refers to trialability—the ability of a person to easily try a product. Trialability helps a product be adopted more quickly (i.e., to diffuse faster).

The process by which the use of a new product or service spreads throughout a market group is referred to as A. new product introduction. B. lead user dispersion. C. diffusion of innovation. D. the product life cycle. E. product development diffusion.

c

Before Segway manufactured its two-wheeled people movers, it built a prototype and had staff engineers test it for performance and stability. At this stage, Segway was involved in A. alpha testing. B. product launch. C. test marketing. D. beta testing. E. concept testing.

A

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 A. why it took her so long to consider the new product line. B. if the e-books are generating the expected level of profit. C. if the e-books are generating the expected level of sales. D. if her customers are interested in the new books. E. if the e-books function as expected.

A

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 most likely A. spread positive word of mouth to other physicians. B. buy one for each office in their practices. C. reposition his products. D. create demand among the late majority. E. not need any service or support when using the product.

A

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 A. keeping up in a market where sales come mostly from new products. B. satisfying the changing needs of former customers. C. avoiding market penetration from products that have been on the market for a long time. D. creating diversification and reducing risk. E. taking advantage of a long product cycle.

A

During the __________ stage of the product life cycle, sales are low and profits are small or negative. A. introduction B. leveling C. maturity D. growth E. decline

A

During the __________ stage of the product life cycle, there are few but an increasing number of competitors. A. growth B. introduction C. maturity D. decline E. innovation

A

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 A. relative advantage. B. compatibility. C. observability. D. associated services. E. trialability.

A

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 A. beta testing. B. market testing. C. premarket tests. D. test marketing. E. concept testing.

A

In many cases, pioneers lose their market lead and initial market share to imitators who A. capitalize on the pioneers' weaknesses. B. create similar products with reduced value to consumers. C. utilize alpha-beta testing. D. ignore patents and copyrights. E. target late maturity consumers.

A

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 A. premarket testing. B. market testing. C. alpha testing. D. concept testing. E. prelaunch testing.

A

Inkjet printers were a big improvement over the dot-matrix printers they replaced. Inkjet printers gained rapid acceptance in the marketplace primarily because of their A. relative advantage. B. compatibility. C. observability. D. complexity. E. trialability.

A

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 A. premarket testing. B. product launch. C. test marketing. D. product development. E. concept testing.

A

One of the key characteristics of brainstorming sessions is A. no idea is immediately accepted or rejected. B. everyone must come up with ideas. C. the first idea is almost always the best idea. D. only the marketing team is included in these sessions. E. the manager should always make the final decision.

A

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. A. innovator B. laggard C. late majority adopter D. early majority adopter E. early adopters

A

Which of the following adopter categories refers to the last large group of buyers to enter a new product market? A. late majority B. early majority C. laggards D. early adopters E. innovators

A

Which of the following is not a characteristic of products in the maturity stage of the product life cycle? A. Laggards are a major focus of marketing efforts. B. Price competition is intense. C. Marketing costs increase as firms defend their market share. D. The market may become saturated because nearly all potential customers have adopted the product. E. To increase the customer base, firms consider entry into new markets and new market segments.

A

Which of the following is not one of the benefits to a firm of new product development? A. reducing the costs of production B. satisfying the changing needs of current and new customers C. avoiding market saturation from products that have been on the market for a long time D. creating diversification and reducing risk E. keeping up in a market with short product life cycles where sales come mostly from new products

A

In the diffusion of innovation process, innovators enjoy taking risks and are regarded as highly knowledgeable. Marketers want to identify innovators because A. they prefer products from established market leaders. B. other consumers defer to their judgment, creating the opportunity for word-of-mouth referrals. C. they are especially price conscious. D. they are easily influenced by reminder advertising. E. they encourage competitors to enter the market.

B

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. Which is the most important question that Kristina should ask? A. What retailers should be used to sell the swimwear? B. Will consumers purchase the swimwear if it becomes available? C. What wholesale price should be charged? D. What promotional plan will work best? E. In which season should we introduce the product?

B

One reason auto companies spend millions on racing cars is that they offer the opportunity to test new designs and technology under extreme conditions. Using the cars in a real-use setting provides an opportunity for _______ the product. A. pretesting B. beta testing C. test marketing D. alpha testing E. concept testing

B

Pioneer or breakthrough products A. will likely result in late maturity buying. B. can change consumer preferences. C. incorporate reverse engineering outputs. D. require the use of concept testing services. E. must be geographically centered.

B

Some products may stay comfortably in the maturity phase of the product life cycle until a new product emerges to replace them. An example of such a mature product is A. e-books. B. refrigerators. C. the VCR. D. smartphones. E. None of these; no product can stay in the maturity phase and survive for very long.

B

The CEO of David's firm just came back from a business seminar. He called David into his office and 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 A. the product life cycle is not a useful concept. B. it is often impossible to identify with precision where a product is in the product life cycle. C. the product life cycle is not helpful in companies like his that pay attention to diffusion of innovation. D. the idea has been discredited by recent research. E. the product life cycle works only for certain types of firms.

B

The __________ step in the product development process is critical, requiring tremendous resources and extensive coordination of all aspects of the marketing mix. A. pretesting B. product launch C. posttesting D. product development E. evaluation of results

B

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 40 years. Uncle Burton is a(n) __________ in the diffusion of innovation process for telephones. A. innovator B. laggard C. late majority D. early majority E. early adopter

B

When a global firm turns to its subsidiaries in less developed markets for new product ideas, such as when Coca-Cola developed Minute Maid Pulpy out of its Shanghai research center and then moved the product into other markets around the world, the firm is engaged in A. a consortia. B. reverse innovation. C. competitive engineering. D. pioneering. E. beta testing.

B

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 A. provided equivalent relative advantage for both European and U.S. customers. B. was not compatible with European market conditions. C. did not provide benefits that were observable. D. involved technology that was too complex. E. could not be easily tried by consumers.

B

When conducting exploratory concept testing for her firm's new Internet antipiracy software, which is the most important question that Dee should ask? A. How long will it take to bring the software to market? B. Will respondents purchase the software if it becomes available? C. Who will determine the price to be charged? D. Where should the product be sold? E. Which computer trade show will be used to introduce the product?

B

Which of the following is not one of the four product life cycle stages? A. introduction B. stagnation C. maturity D. growth E. decline

B

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. A. introduction B. leveling C. maturity D. growth E. decline

C

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. A. innovator B. laggard C. late majority D. early majority E. early adopter

C

Companies that develop customized-business software often work closely with their users when installing their products. This close contact often creates new product ideas through A. reverse engineering. B. licensing technology. C. customer input. D. R&D consortia. E. clinical trials.

C

Concept testing is important because it can A. help the firm refine the promotional plans. B. lead to immediate rollout of the final product. C. help a firm avoid the costs of unnecessary product development. D. reduce the potential loss of sales during the decline stage. E. increase product development costs.

C

For new product marketers, early adopters are important because they tend to be A. few in number. B. the first to adopt a new product. C. opinion leaders. D. fond of prototypes. E. alpha testing enthusiasts.

C

Many home design businesses volunteer to provide their latest products for tours-of-homes fundraisers because they know their new products will benefit from A. relative advantage. B. compatibility. C. observability. D. complexity. E. trialability.

C

Microsoft's Windows operating system continues to dominate the market, even though it has been around for over 20 years. Windows will likely remain in the maturity stage of the product life cycle A. indefinitely. B. until it rules the world. C. until a superior product comes along to replace it. D. unless Microsoft repositions Windows as an introductory stage product. E. as long as the company doesn't change it.

C

The __________ diffusion of innovation group is the last large group of consumers to adopt a new product or service. A. innovator B. laggard C. late majority D. early majority E. early adopter

C

The diffusion of innovation theory is useful to marketers in helping them A. adjust to the performance life cycle. B. avoid the cost of concept testing. C. predict which types of customers will buy their product immediately and later. D. predict how long it will take for a new product to gain market acceptance. E. determine a target market.

C

The product life cycle is theoretically __________ with regard to sales and profits. A. U shaped B. Y shaped C. bell shaped D. circular E. flat lined

C

When McDonald's comes up with a new drink or sandwich for its restaurants, it often markets it in a dozen or so of its outlets. When the company does this, it is engaged in A. pretesting. B. product launch. C. test marketing. D. product development. E. concept testing.

C

When microwaves were new, they often cost over $300, were huge, and 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. A. innovator B. laggard C. late majority D. early majority E. early adopter

C

When testing new products, most firms consider the question of whether testing products on animals A. should always be done in the animal's natural environment. B. should be done outside the United States to avoid consumer backlash. C. should be done when the new product does not contribute to the health and well-being of human users. D. should be done only by companies large enough to be ethically responsible. E. should be done with animal activists present.

C

Which of the following is not a stage in the product life cycle? A. introduction B. growth C. evaluation D. maturity E. decline

C

__________ are customers who modify existing products according to their own ideas to suit their specific needs. A. Early adopters B. Market testers C. Lead users D. Reverse engineers E. Concept testers

C

__________ is the process by which ideas are transformed into new products and services that will help firms grow. A. Beta testing B. Concept testing C. Innovation D. Reverse engineering E. Competition

C

Cathy has used Olay beauty products for years, even though there are many competitors on the market. She plans to purchase a recently introduced micro-sculpting cream from Olay's Regenerist line. Olay is in the _________ stage of the product life cycle. A. introduction B. growth C. evaluation D. maturity E. decline

D

During the __________ stage of the product life cycle, sales rise, profits rise rapidly, and there are a small but increasing number of competitors. A. introduction B. leveling C. maturity D. growth E. decline

D

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 market his current products only to his current customers or A. diversify. B. intensify his prototyping. C. expand his early adopter market segment. D. market the same products to similar customers. E. focus on concept testing.

D

Innovators are a critical group of new product adopters because they A. are the major source of innovation. B. act as reverse engineering consultants. C. help with test marketing. D. help the product gain market acceptance. E. extend the product life cycle.

D

Successful first movers create a market or a product category. They often benefit from being readily recognizable to consumers and A. not having to pay advertising expenses. B. using prototypes to dominate the market. C. not needing to do test marketing. D. establishing an early market share lead. E. motivating laggards to buy their products.

D

The __________ diffusion of innovation group is crucial because few new products can be profitable until this large group buys them. A. innovator B. laggard C. late majority D. early majority E. early adopter

D

The diffusion of innovation theory focuses on A. the geographic boundaries of innovation. B. the relationship between pioneer brands and imitators. C. the psychological traits of innovators. D. the rate at which consumers are likely to adopt a new product or service. E. the way a product moves through the product life cycle.

D

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. A. introduction B. leveling C. maturity D. growth E. decline

D

When a product is successful in the introductory stage of the product life cycle, A. it moves directly into the maturity stage. B. it is most likely to begin to launch spinoffs. C. competition becomes less important. D. it may start to see profits toward the end of this stage. E. marketing costs increase significantly.

D

Which of the following is least likely to be a source of ideas for new products? A. R&D efforts B. licensing agreements C. consumer research D. geodemographic segmentation E. brainstorming

D

Golf ball manufacturers use "Iron Mike," a machine that swings a golf club at a constant velocity, to test the distance for new golf ball designs. When using Iron Mike, the manufacturers are engaged in A. concept testing. B. market testing. C. premarket testing. D. product development. E. alpha testing.

E

In the product development process, what takes place between concept testing and market testing? A. securing financial backing B. conducting marketing research C. brainstorming D. determining potential ROI E. performing product development

E

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. A. R&D B. licensing technology C. consumer research D. geodemographic analysis E. brainstorming

E

The growth phase of the product life cycle is always dynamic. Which of the following does not occur in this phase? A. Profits increase as sales increase. B. Profits increase as economies of scale are attained. C. Some new competitors may enter the market with similar products. D. Some competitors will exit in an "industry shakeout." E. Price competition with protracted price wars erodes profits.

E

Which of the following is not a reason listed in your text for the high failure rate of new products? A. failing to assess the market properly B. neglecting to do appropriate product testing C. targeting the wrong segment D. overextending a firm's abilities E. failing to introduce lower-priced alternatives

E

Which of the following would not be part of the launch of a new product? A. determining the marketing budget for the first year of the product B. finalizing the marketing mix variables C. reviewing previously conducted research D. making decisions regarding positioning the product E. starting to make preliminary decisions about the target market

E

Zappos.com, an online shoe store, offers an easy, no-hassle return procedure. This relates to the _______ of its products. A. relative advantage B. compatibility C. observability D. complexity E. trialability

E

On the diffusion of innovation curve, the late majority is the final group of buyers who like to avoid change and rely on traditional products until they are no longer available

FALSE Laggards are consumers who like to avoid change and rely on traditional products until they are no longer available

test marketing refers to customers who modify existing products according to their own ideas to suit their specific needs

FALSE Test marketing refers to the limited test of a product and its full marketing mix, usually in a particular geographic area, in order to evaluate the potential for success of the plan

As personal computers became popular, the sale of typewriters decreased significantly and now typewriters are only used by a very small segment of consumers. Typewriters are in the maturity stage of the product life cycle

FALSE Typewriters are in the decline stage. Firms with products in the decline stage either position themselves for a niche segment of diehard consumers or those with special needs or they completely exit the market

The most challenging part of applying the product life cycle concept is that managers do not know exactly what shape each product's life cycle will take

TRUE The product life cycle is a general model of the life of a product; however, there is no way to know precisely what stage a product is in

Fashion trends tend to experience short product life cycles

TRUE This is true. Consequently, fashion designers produce entirely new product selections a few times per year

The failure rate for new products is high

TRUE This is true. One of the main reasons the failure rate for new products is so high is the failure to assess the market properly by neglecting to do appropriate product testing, targeting the wrong segment, and/or poor positioning. Firms may also overextend their abilities or competencies by venturing into products or services that are inconsistent with their brand image and/or value proposition

New product development adds value to a firm's products and services through innovation.

TRUE Without innovation, firms would have only two choices: to continue to market current products to current customers, or to take the same products to other markets. New product development opens up greater opportunities.