mkt ch 12

What is a key characteristic of the maturity stage?

Firms defend market share

What objective(s) do firms have in adding new products, services, and processes to their offerings?

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

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

false

Relative ______ deals with perception among consumers that a product is better than its substitutes.

advantage

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%

Which of the following is an example of a research and development effort?

A test kitchen at a fast food restaurant

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

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

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

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.

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.

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

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

Manufacturing Engineering Marketing

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

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

Which of the following is a market testing method that offers a strong predictor of product success based on actual purchasing behavior?

Test marketing

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

The product life cycle

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

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

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

concept

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.

decline

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

When a company adds new products this helps the company to ______ its risk.

diversify

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

represents the earlier half of the two largest categories of consumers on the diffusion of innovation curve.

early majority

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

first

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

idea

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

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

innovation

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

innovator; early adopter

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

When the _______ majority of consumers enters the market, the market has already reached its full market potential.

late

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

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 a positive result from the market testing the next step is known as ______ launch.

product

development entails a variety of processes and considerations to determine the form and features of a firm's offerings.

product

Key characteristics of the introduction stage are that _____

profits are low start-up costs are high

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 _________ within the diffusion process.

relative advantage

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

risk diversification

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

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 ______.

saturated

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

very low; essentially no

Without innovation, what options would be available to firms?

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

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 geographical area prior to a national launch, it was engaging in _____

test marketing

Concept testing can be as simple as a brief written description of the product that might also include _______.

visual images customer needs it satisfies