Unit 5 - Chapter 12: Developing New Products

Put the stages in the product life cycle in order from first to last, with the first stage at top. - Introduction - Maturity - Growth - Decline

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

Put the stages in the product life cycle in order from first to last, with the first stage at top. Decline Maturity Growth Introduction

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

Laggards make up roughly ______ of the market.

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.

34%

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

34%

Which of the following is a way by which risk can be diversified?

By creating a broader portfolio of products through innovation.

What are the key characteristics of the growth stage of the product life cycle?

Competitors increase and sales rise.

What might a concept include along with a brief written description of the product?

Customer needs it satisfies and visual images.

What are the four stages that a product passes through as it enters, gets established in, and ultimately leaves the marketplace?

Decline, introduction, growth, and maturity.

______ 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

Which of the following statements about firms' expectations regarding the success of internal research and development efforts is true?

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

Product development entails a variety of processes and considerations to determine which aspects of a product or service?

Form and features.

Which of the following industries are most likely to participate in a research consortium?

High-tech and pharmaceuticals.

Which of the following factors influence how rapidly a product will move through the product life cycle?

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

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

Idea

______ 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

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.

Firms can highlight a product's relative advantage, which refers to which perception among consumers about the product?

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.

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

Laggards

In a ______ agreement companies buy the rights to use technologies from another company.

Licensing

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

Licensing

Product development or product design entails a process of balancing which types of considerations?

Manufacturing, engineering, and marketing.

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

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?

Research consortium.

Which of the following processes could be considered an acceptable method for generating ideas?

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

Without innovation, what options would be available to firms?

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

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

The product life cycle

What objectives do firms have in adding new products, services, and processes to their offerings?

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

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: 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

Some markets demand a higher frequency of new product releases than others. In which of the following markets do sales come from new products?

Video games, books, and movies.

Adding new products is MOST likely to prompt consumers to purchase in which of the following industries?

Video games.

What does a postlaunch review help determine?

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

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.

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 ______.

are constantly changing

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

blockbusters

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

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.

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.

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

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

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

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.

While the ______ is first to adopt the item, the ______ adopts next.

innovator; early adopter

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

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.

laggards

Those consumers who enter the market for the first time during the decline stage are known as ______.

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

During the ______ stage of the product life cycle, the market for the product usually becomes saturated.

maturity

The ______ stage of the product life cycle is characterized by the adoption of the product by the late majority and good profitability.

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.

postlaunch

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

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.

research and development

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

research; development

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

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

six

When Burger King introduced the new Whopper Bar to a limited geographic area prior to a national launch, it was engaging in ______.

test marketing

When Subway introduced a new Southwestern Club sandwich in South Florida before launching it nationwide, it was engaging in ______.

test marketing

When a product is first launched during the introduction stage, sales are usually ______ and there are ______ competitors.

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 stage the product is in