BA 370 Chapter 12 Questions
Because a market is saturated, firms may attempt to enter new geographical markets that may be less saturated. For example, pharmaceutical companies are realizing that they need to turn to ________ for continued growth in the coming years.
BRIC countries
Which of the following was considered a new-to-the-world product or service when introduced?
Blu-ray
Although innovation strategies may not work in the long run, overriding short-term reasons compel firms to introduce new products and services.
False
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
The maturity phase of the product life cycle is characterized by greatly reduced competition.
False
When Pierre asked a few of his regular customers to test his prototype wine press, he was engaging in alpha testing.
False
________ is the process by which ideas are transformed into new products and services that will help firms grow.
Innovation
Which of the following is a characteristic of products in the maturity stage of the product life cycle?
Marketing costs increase as firms defend their market share.
________ involves taking apart a product, analyzing it, and creating an improved product that does not infringe on the competitor's patents.
Reverse engineering
Which of the following reflects the maturity stage of the product life cycle?
Sales: peak Profits: peak to declining Typical Consumers: late majority Competitors: high number of competitors and competitive products
Even if products succeed, not all consumers adopt new-to-the-world products at the same time.
True
New product development adds value to a firm's products and services through innovation.
True
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
The failure rate for new products is high.
True
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
To determine if a new product is commercially viable, a firm can conduct premarket testing.
True
When consumers see their friends using an innovation, it often persuades them to try it too.
True
Crystal created a virtual prototype of her new line of athletic wear on a website to show to consumers. Crystal will ask consumers what they think of the clothing. Which is the most important question that Crystal should ask?
Will retailers purchase the swimwear if it becomes available?
Freida is using a test model of her firm's new inline skates to see if they work according to the design specifications. She is involved in
alpha testing
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
alpha testing
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.
compatibility
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
creating diversification and reducing risk.
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
customer input
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 ________ stage of the product life cycle.
decline
Firms with products in the ________ stage either position themselves for a niche segment of diehard consumers or those with special needs or they completely exit the market.
decline
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.
early adopter
Zoe recently bought Voice over Internet Protocol (VoIP) phone service. A few of Zoe's friends bought VoIP before she did, but many other friends were interested in Zoe's opinions of the new phone service. Zoe is a(n) ________ in this product category.
early adopter
Successful first movers create a market or a product category. They often benefit from being readily recognizable to consumers and
establishing an early market share lead.
Innovators are a critical group of new product adopters because they
help the product gain market acceptance
During the introduction stage of a product's life cycle, typical consumers are
innovators
The ________ stage of the product life cycle is characterized by negative or low profits.
introduction
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
keeping up in a market where sales come mostly from new products.
Which of the following groups are included in the diffusion of innovation curve?
late majority
Rinaldo 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.
lead users
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.
maturity
During the ________ stage of the product life cycle, sales peak and profits begin to decline as competition becomes intense.
maturity
Melinda 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.
maturity
One of the key characteristics of brainstorming sessions is
no idea is immediately accepted to rejected
In the diffusion of innovation process, innovators enjoy taking risks and are regarded as highly knowledgeable. Marketers want to identify innovators because
other consumers defer to their judgement, creating the opportunity for word-of-mouth referrals
Which of the following are reasons for the high failure rate of new products?
overextending a firm's abilities
Sarita 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 Sarita is part of is engaged in
premarket testing
The ________ step in the product development process is critical, requiring tremendous resources and extensive coordination of all aspects of the marketing mix.
product launch
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
refrigerators
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
relative advantage
Firms can measure the success of a new product by
satisfaction of its technical requirements.
Serena 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. Serena is trying to identify innovators in her market, knowing these customers will most likely
spread positive word-of-mouth to other physicians
A marketing professor in Boston, Massachusetts, 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.
test marketing
Many restaurants roll out new ideas first in Orlando, Florida, a location that attracts a vast range of diverse tourists and thus might offer insights into what various consumer groups will like. This is an example of
test marketing
The diffusion of innovation theory focuses on
the rate at which consumers are likely to adopt a new product or service
As a promotion technique, samples are often used for new products when ________ will influence the diffusion of the product.
triability
Zappos.com, an online shoe store, offers an easy, no-hassle return procedure. This relates to the ________ of its products.
triability
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
until a superior product comes along to replace it
Bev is assessing the results of a new product launch of a series of e-books for her bookstore. When evaluating the results, Bev is least likely to consider
why it took so long to consider the new product line