Chapter 12 Marketing
The ___ department can be considered an investment into a company's future.
R&D
While innovators are crucial to the success of a new product or service, this category of consumers is actually very small at what percentage?
about 2.5%
Crucial to the success of new products are early ___ who are responsible for influencing the final three categories of consumers to purchase the product
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
When a product goes into the ___ stage of the life cycle, it eventually exists the market
decline
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 percentage of new products that actually succeed is
extremely low
Put the stages in the life cycle in order from first to last
introduction, growth, maturity, decline
____ are consumers who like to avoid changes and rely on traditional products until they are no longer available
laggards
After product development, firms conduct premarket tests with are...
tests conducted before a product or service is brought to market to determine how many customers will try and then continue to use it
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
R&D _____ are groups of firms and institutions who collaborate to do research and development
consortia
There are typically the fewest competitors in which stages of the product life cycle?
introductory and decline
During the decline stage of a product life cycle, ___ who have not yet tried the product or service will be entering the market for the first time.
laggards
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 might lose money in the sort term, but because R&D departments are viewed as ___, the firms hope that they will be profitable for the long term
continuous investments
The early _ represents the earlier half of the two largest categories of consumers on the diffusion of innovation curve.
majority
During the ___ stage of the life cycle, industry sales reach the peak, so firms try to rejuvenate their products by adding new features or re positioning them.
maturity
Purchasing a coffee from a coffee shop is a ___ purchase decision than purchasing a cell phone from a large retail store
less complex
In the ___ stage of the life cycle, the product gains acceptance, demand and sales increase, and there are more competitors
growth
Some markets demand a higher frequency of new product releases than others. In which of the following markets do sales come from new products?
movies, video games, books
Relative ____ deals with perception among consumers that a product is better than its substitutes
advantag
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
decline
____ 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 theory that helps marketers understand the product or service adoption rates of consumers is called
diffusion of innovation
Which consumers enjoy taking risks and like to be the first to purchase a new product or service?
innovators
In a ___agreement companies buy the rights to use technologies from another company
licensing
If you're a customer of a company and are asked to use a product prototype, you would be engaging in what type of testing?
beta
Refers to a group session in which participants work together to generate new ideas
brainstorming
Which of the following processes could be considered an acceptable method for generating ideas?
brainstorming with the firm, communicating with the R&D department, researching competitors' products and services, and conducting consumer research
For many Americans the daily ritual of having coffee is almost automatic and assumed. The same can be said for the CHinese but with tea. For a firm that is marketing a product, this example serves as a reminder to consider the ____ of your product and its intended target market
compatibility
Despite market saturation, firms are constantly introducing products with new and improved features or in order to gain market share against immense___
competition
What are the key characteristics of the growth stage of the product life cycle?
competitor's increase and sales rise
Through the effective use of ____ testing, firms may be able to avoid the high costs of product development for product ideas that do not meet customers' expectations
concept
Identify one of the disadvantages from being a first mover
having to establish the market all alone
Which of the following traits are associated with the innovators consumer group?
highly knowledgeable, trend setters, and risk takers
The product development process can be diagrammed as a sequential process. Place the stages in order.
idea generation, concept testing, product development, market testing, product launch, evaluation of product's success
The diffusion of innovation curve illustrates the typical rate of adoption for a product or service among consumers. According to the curve shown, when would marketers expect to see highest frequency of purchases for a given product or service
in the middle of the curve
Place each life cycle category in order from earliest to latest
innovators, early adopters, early majority, late majority, laggards
During the ___ stage of the product life cycle, the product category first launches and we see innovators start buying products
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
introduction
Which diffusion of innovation adopter group waits until the bugs are worked out of a particular product in order to avoid risk, but still purchases within the first half of all adopters?
early majority
When a firm launches a new product, it needs to review the sales and profit levels of the product to determine if the product is successful. What is this stage?
evaluation of results
T/F: prototypes are never crafted individually
false
When products reach the growth stage of the product life cycle, firms typically attempt to reach new customers by adjusting which aspects of a product?
features, colors and styles
In terms of their place on the diffusion of innovation curve, innovators are the ___ category of consumers.
first
While early adopters are crucial to the success of a new product, they still only make up a relatively small percentage of the total consumers in a given product market. this percentage is approximately how big?
13.5%
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?
Pampers disposable diapers in the early s and amana's microwave in 1967
When Ben & Jerry's tests all of its new flavors on its own employees at its corporate headquarters, it is engaging in what kind of testing?
alpha
Early adopters, although not as fast as innovators, are quick to purchase a new product or service. Identify all of the following characteristics that are typically associated with early adopters
are less risk seeking than innovators, tend to be opinion leaders of particular product categories
Using the ___ theory, a firm can predict which types of consumers will buy a new product or service immediately after its introduction and which consumers will buy it later, once the product is more widely accepted by the market
diffusion of innovation
When a company adds new products this helps the company to ___ its risk
diversify
Which of the following questions are likely to be asked of customers during concept testing?
does the proposed price seem like a good value? how often and in what quantities would the customer buy the product? does the product meet a need that is not currently being satisfied?
Firms feel compelled to add new products to their offerings in order to satisfy the changing needs of current and new ___
domestic and foreign markets
when the _____ majority of consumers enters the market, the market has already reached its full market potential.
late
In the ____ user approach to customer input for developing new products, a company studies how innovative product users modify existing products for their needs
lead
_____are innovative consumers who modify existing products according to their own ideas to suit their specific needs
lead users
A useful tool used by managers is the product _____, which helps to analyze the types of strategies that may be required over the life of a product
life cycle
The product ___ ___ concept has been proven to be a valid idea, and new analytical tools now provide "rules" for detecting points in the cycle
life cycle
Whenever a product has a ___ level of complexity, it will consequently be ___ to try.
low; easy
Product development or product design entails a process of balancing which types of considerations?
manufacturing, engineering, and marketing
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 that already exists but has not been ___
marketed
Not every product makes it through the life cycle to the last stage of the PLC, decline. Instead, the product remains in stage three, ___, for years by adding new features to the core product.
maturity
The____ stage of the product life cycle is characterized by the adoption of the new product by the late majority and good profitability
maturity
What are some advantages experienced by pioneer firms over later entrants?
more likely to command a greater market share over a longer period, more readily recognizable to consumers, and establish an early market share lead
Identify potential impacts to the company when a new product launch is a failure
negative financial impacts, company may fail, and product may not recover
Entry into a ____ market may emerge through simple product design changes. For example Clorox has added pre-moistened Armor All wipes to its do it yourself car cleaning line.
new
___ is when a company hires an outside firm to help accomplish a task
outsourcing
Innovators on the diffusion of innovation curve usually stay well informed about the product category. Which of the following are the most likely ways an innovator might keep up to date about new developments in 3d television?
participate in a discussion forum about 3d tv technology and attend the annual consumer electronics show to see the newest models
Firms measure the success of a new product by its sales ____, customer acceptance and its satisfaction of the firm's financial requirements
performance
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
During concept testing it is important to present a brief written description to ___ to obtain their reactions to the ideas presented.
potential buyers or users
As industry sales increase, profits in the growth stage will ____ because of the economies of scale associated with manufacturing and marketing costs
rise
If a firm has a positive result from the market testing, the next step is known as ___ launch
product
___ defines the stages products move through as they enter, get established in, and ultimately leave the marketplace.
product life cycle
Whenever we see a copycat consumer good appearing for sale in grocery or drugstore products, we know that some other firm has successfully ______ engineered a previous firms product.
reverse
____ engineering refers to taking apart a competitor's product, analyzing it, and creating an improved product that does not infringe on the competitor's patents.
reverse
Burger king launched the "whopper bar", serving beer as well as burgers in a test market in Miami. Which of the following would have been elements of a good plan for this test market?
running the TV ads planned for the full launch and offering the complete menu planned for the full launch
Emerging new trends or changes in consumer tastes can fragment ___ markets, which would open new market opportunities.
saturated
New product and service innovation is important because the longer a product or service exists in a given market place, the more likely that the market will become...
saturated
As a consumer, being an innovator in a given product category can mean engaging in a number of behaviors. WHich behavior would best illustrate an innovator?
sleeping outside Best Buy for the latest game console
By the time the late majority enters the market, sales tend to ___ or even decrease slightly toward the end of the stage
stabilize
Without innovation, what options would be available to firms?
take current products to new markets and continue to market current products to current customers
One of the most critical elements of success in new product launches is ___ the introduction such as scheduling the release of a movie to match school holidays
timing
T/F: Contributing factors to the increased failure rates for new products are targeting the wrong segment and poor positioning
true
T/F: 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
Concept testing can be as simple as a brief written description of the product that might also include...
visual images and customer needs that it satisfies
