Ch. #12

Early adopters, although not as fast as innovators, are quick to purchase a new product or service. Which of the following characteristics are typically associated with early adopters? (Choose every correct answer.)

- Are less risk seeking than innovators - Tend to be opinion leaders of particular product categories

While pioneers capture an early and commanding market share, imitators often enter the market and gain which advantages? (Choose every correct answer.)

- Capitalizing on the pioneer brand's weaknesses - Offering better products at lower prices - Focusing marketing efforts on demand for their brand

What are the steps taken by firms that have products in the decline stage of the product life cycle? (Choose every correct answer.)

- Completely exit market - Target a niche segment

Which of the following processes could be considered an acceptable method for generating ideas? (Choose every correct answer.)

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

Without innovation, what options would be available to firms? (Choose every correct answer.)

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

What might a concept include along with a brief written description of the product? (Choose every correct answer.)

- Customer needs it satisfies - Visual images

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

- Growth - Introduction - Maturity - Decline

Which of the following industries are most likely to participate in a research consortium? (Choose every correct answer.)

- High-tech - Pharmaceuticals

Which of the following traits are associated with the innovators consumer group? (Choose every correct answer.)

- Highly knowledgeable (about the product/service) - Risk takers

Which of the following factors influence how rapidly a product will move through the product life cycle? (Choose every correct answer.)

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

Product development or product design entails a process of balancing which types of considerations? (Choose every correct answer.)

- Manufacturing - Engineering - Marketing

What are some advantages experienced by pioneer firms over later entrants? (Choose every correct answer.)

- More readily recognizable to consumers - Establish an early market share lead - More likely to command a greater market share over a longer period

How has technology influenced beta testing in recent years? (Choose every correct answer.)

- Ordinary people have the opportunity to be beta testers. - The process is more highly automated than in the past. - Participant reactions can be tracked through a webcam.

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? (Choose every correct answer.)

- Pampers disposable diapers in the early 1960s - Amana's microwave oven in 1967 --------------------------- NOT - Microsoft's Bing Search Engine in 2009 - Coca-Cola's New Coke in 1984

How does a brainstorming session operate? (Choose every correct answer.)

- Participants vote on the best ideas. - Group cooperation is encouraged. - No idea can be approved immediately.

Which of the following are potential impacts to the company when a new product launch is a failure? (Choose every correct answer.)

- Product may not recover from failure - Negative financial impacts - Company may fail

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? (Choose every correct answer.)

- Running the TV ads planned for the full launch - Offering the complete menu planned for the full launch

What are the key characteristics of the growth stage of the product life cycle? (Choose every correct answer.)

- Sales rise - Competitors increase

What are the three interrelated factors firms use to measure the success of a new product?

- Satisfaction of firm's financial requirements - Satisfaction of technical requirements such as performance - The extent of customer acceptance

What are key characteristics of the introduction stage? (Choose every correct answer.)

- Start-up costs are high - Profits are low

When products reach the growth stage of the product life cycle, firms typically attempt to reach new customers by adjusting which product aspects? (Choose every correct answer.)

- Styles - Colors - Features

Firms solicit customer input through which methods? (Choose every correct answer.)

- Surveys - Focus groups - Informal discussions

Which of the following traits are associated with the introduction stage of the product life cycle? (Choose every correct answer.)

- The product category launches. - Innovators purchase products.

Which of the following traits are associated with the decline stage of the product life cycle? (Choose every correct answer.)

- The product exits the market. - Product rejuvenation efforts have failed.

What can marketers learn from the diffusion of innovation theory? (Choose every correct answer.)

- The rate at which consumers are likely to adopt a new product or service - Which markets are likely to be most receptive to new products or services

Which if the following are traits of breakthrough products? (Choose every correct answer.)

- They are referred to as pioneers. - They can change the rules of competition. - They can alter consumer preferences.

What objectives do firms have in adding new products, services, and processes to their offerings? (Choose every correct answer.)

- To keep customers from getting bored with existing products - To satisfy the changing needs of consumers --------------------------- NOT - To lower production costs - To attract talented employees to the firm

Some markets demand a higher frequency of new product releases than others. In which of the following markets do sales come from new products? (Choose every correct answer.)

- Video games - Books - Movies --------------------------- NOT - Over-the-counter medicines - Gardening Equipment

What does a postlaunch review help determine? (Choose every correct answer.)

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

The product development process can be diagrammed as a sequential process. Place the stages in order, with the first stage at top.

1. Idea generation 2. Concept testing 3. Product development 4. Market testing 5. Market testing 6. Product launch 7. Ealuation of results

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

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 product has the most observability?

A cordless screwdriver

Which type of firm is most likely to engage in a licensing approach to R&D?

A firm with a low budget and a need to get a product to market quickly

Some products, such as appliances, stay in the maturity stage for a long time and are unlikely to decline unless what occurs?

A superior solution replaces them.

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

A test kitchen at a fast food restaurant

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 Ben & Jerry's Ice Cream tests all of its new flavors on its own employees at its corporate headquarters in Vermont, it is engaging in what kind of testing?

Alpha testing

Which of the following health products is the LEAST complex?

An over-the-counter pain reliever such as Tylenol or Advil

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

By creating a broader portfolio of products through innovation

For concept testing a new fitness tracking device, a firm would present a concept statement to which group?

Consumers who jog or go to the gym

________ 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. (Enter one word in each blank.)

Diffusion (or) Difusion (or) Diffussion (or) Difussion

Joanna is interested in new electronics products, but she prefers to wait a few weeks to buy them until technology bloggers post their initial opinions. Joanna probably belongs to which of the adopter groups?

Early adopters

After a new product is launched, what is the next step of the product development process?

Evaluation of results

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

False

True or False: Prototypes are never crafted individually.

False

Sequential steps are involved in a new product launch. Drag and drop the steps against the corresponding task. Instructions

Firm confirms its target market <-----> First Step Firm decides how the product will be positioned <-----> Second Step Firm finalizes the remaining marketing mix variables for the new product <-----> Third Step

In addition to consumers, innovators may also come from which group?

Firms

What is a key characteristic of the maturity stage?

Firms defending market share

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.

What happens during an industry shakeout in the growth stage of the product life cycle?

Firms that have not established a strong hold in the market decide to exit.

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

Form and features

During the ______ stage firms may pursue several strategies to increase their customer base or defend their market share. One such strategy may be to develop new features or reposition them.

Growth

During which stage of the product life cycle does the product gain acceptance, experience increased demand and sales, and encounter increasing competition in the product category?

Growth

Identify one of the disadvantages of being the first mover.

Having to establish the market all alone

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

Idea (or) Concept

Listening to customer input helps firms with which tasks?

Idea generation and product development

According to the diffusion of innovation curve, when would marketers expect to see the highest frequency of purchases for a given product or service?

In the middle of the curve

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

Innovation

For the first few releases of new iPhone models, lines formed outside Apple stores, sometimes days in advance. The people in these lines hoped to be the first to obtain the latest phone. Most of the people in this line probably belonged to which of the adopter groups for new technology?

Innovators

Which consumers enjoy taking risks and like to be the first to purchase 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 influence has the Internet had on the recruitment of beta testers?

It is easier to recruit testers than before.

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

______ are innovative consumers who modify existing products according to their own ideas to suit their specific needs.

Lead users

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

Licensing (or) Liscensing (or) Licsensing (or) License

________ is when a company hires an outside firm to help accomplish a task.

Outsourcing (or) Out sourcing (or) Outsource

In the context of how firms develop new products, what is the next step if a firm has positive results from market testing?

Product launch

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

________ 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 (if any exist).

Reverse

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

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

Test marketing

Through the effective use of concept testing, firms may be able to avoid which issue?

The high costs of unnecessary product development

Which of the following is a possible advantage for a firm that chooses to use brainstorming for its new products as opposed to other idea generation methods?

The ideas that receive the most votes go to the next stage.

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

The product life cycle

True or False: Both firms AND consumers can be innovators.

True

True or False: During test marketing, a firm will introduce all the elements of the marketing mix to determine demand for the entire market.

True

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

True or False: Targeting the wrong segment and poor positioning are contributing factors to the high rate of failure for new products.

True

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

Video games

The diffusion of innovation curve refers to the rate in which consumers ______ a given product or service.

adopt

Early ________ are the category of consumers who begin to use a product or service immediately following innovators. (Remember to type only one word in the blank.)

adopters (or) adoptors (or) adapters (or) adoption (or) adopter

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

Using in-house ________ testing, the company attempts to determine whether the product prototype will perform according to its design and whether it satisfies the need for which it was intended, by performing tests in the R&D department.

alpha (or) aphla

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

A newly formed coffee company should not have much trouble finding coffee drinkers in America to purchase a new type of coffee maker. However, a company selling gear for the game of cricket might have a difficult time being successful in the United States. They would probably be more successful in India or Australia. The degree to which one's product is consistent with the needs and habits of target consumers is known as ______.

compatibility

For many Americans, the daily ritual of having a 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

Firms must continually introduce new products with improved features and find new uses for existing products to defend market share from ______.

competition

Trialability and ________ refer to how complicated a product is and how easy or hard it is to try.

complexity

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

concept

During intense competition, a firm needs ______ to defend its market share from competition.

constant innovation

Sometimes, firms have difficulty moving through the brainstorming process themselves. When this occurs, they can hire outside firms such as IDEO, which help to create an environment that is conducive to ______.

creativity

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 (or) declining

When a product goes into the ________ stage of the product life cycle, the product eventually exits the market.

decline (or) sales decline (or) decline stage

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

The theory that helps marketers understand the product or service adoption rates of consumers is called ______.

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

If a concept test ______ customers' expectations, it is doubtful it would succeed if it were to be produced and marketed.

fails to meet

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

first

Apple created an entirely new brand that started with the iPod and evolved into different product categories (e.g., iPhone, iPad) before anyone else could catch on. Thus, Apple was the ______, which made the firm easily recognizable to consumers, helping it to gain an early market share lead.

first mover

During the ______ stage of the product life cycle, firms attempt to reach new consumers by studying their preferences and producing many different product variations.

growth

In the ________ stage of the product life cycle, the product gains acceptance, demand and sales increase, and there are more competitors.

growth

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 (or) growing

After product development, firms conduct premarket tests, which help determine ______.

how many customers will try and then continue to use it

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

Products go through a number of stages in the product life cycle. The stage where a product begins the product life cycle is known as the ________ stage.

introduction (or) market introduction (or) introductory (or) intro

If a company invests all its time and effort into a new product and the product fails, ______.

it will be extremely difficult for the firm to recover

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

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

Purchasing a coffee from a coffee shop, for example, is a ______ purchase decision than purchasing a cell phone from a large retail store.

less complex

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

licensing

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

Whenever a product has a ______ level of complexity, it will consequently be ______ to try.

low; easy

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 (product) that already exists but has not been ______.

marketed

In the ________ stage of the product life cycle, a firm may want to start looking for new market segments in order to find new opportunities.

maturity (or) maruity (or) mature

During the ________ stage of the product life cycle, industry sales reach the peak, so firms try to rejuvenate their products by adding new features or repositioning them.

maturity (or) mature

Not every product follows the same life cycle curve; many products stay in the ________ stage for a very long time, often for years, due to strategies like adding new features to established products.

maturity (or) mature

The ________ stage of the product life cycle is characterized by the adoption of the product by the late majority and good profitability. (Remember to type only one word in the blank.)

maturity (or) mature

When a product such as a "nick-free" razor blade is launched, it may diffuse more slowly than a product like the Apple iPad, which is easily seen and whose benefits or uses are easily communicated to others. This comparison exemplifies a difference in ______ one of the product characteristics that affect the speed of diffusion.

observability

Firms measure the success of a new product by its technical ______, customer acceptance and its satisfaction of the firm's financial requirements.

performance

During concept testing it is important to present a brief written description to ______ to obtain their reactions to the idea(s) presented.

potential buyers or users

A(n) ________ test is when a company shows potential customers a product or service before they actually bring it to market.

premarket

A(n) ________ is the first physical form or service description of a new product, still in rough form, that has the same properties as the product.

prototype (or) pototype (or) protype (or) proto type

A firm's ________ and ________ department consists of scientists who work to solve complex problems and develop new ideas. (Do not abbreviate answer)

research or R; Development or D

In order for a firm to successfully make a new product out of a competitor's product, that firm must engage in ______ to figure out how to bring an improved version to the market.

reverse engineering

As industry sales increase, profits in the growth stage will ______ because of the economies of scale associated with manufacturing and marketing costs.

rise

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 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

On the basis of the research gathered on consumer perceptions, the tests it has conducted, and competitive considerations, the firm confirms ________ its market and decides how the product will be positioned.

target

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

While new products can become huge success stories, they have a high failure rate. In many cases imitators capitalize on the ______ of pioneers and subsequently gain advantage in the market.

weaknesses

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