Ch.12/some of 13

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%

R&D consortia

A group of firms and institutions, possibly including government and educational institutions, that explore new ideas or obtain solutions for developing new products.

test marketing

A method of determining the success potential of a new product; it introduces the offering to a limited geographical area prior to a national launch.

Licensing

A method of entering a foreign market in which the company enters into an agreement with a licensee in the foreign market

alpha testing

An attempt by the firm to determine whether a product will perform according to its design and whether it satisfies the need for which it was intended; occurs in the firm's research and development (R&D) department.

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. -Firms do not track the profitability of their R&D efforts because some research pays off many years later. -Firms expect to lose money on R&D in the long run but consider it an advertising expense. -Firms expect that every product developed by in-house researchers will be profitable.

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

What will happen to a firm if it continues to produce the same products in a saturated market?

It will eventually decline.

How is consumer panel data collected during the test marketing phase of a new product introduction?

Panelists scan their receipts on a home scanning device.

Reverse Engineering

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.

Which of the following is true of profits in the maturity stage of the product life cycle?

They peak or are declining.

perishable

a characteristic of a service: it cannot be stored for use in the future

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

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

advantage

Before Segway manufactured its two-wheeled people movers, it built a prototype and had staff engineers test it for performance and stability. At this stage, Segway was involved in

alpha testing.

pioneers or breakthroughs

are new product introductions, especially new-to-the-world products that create new markets

Laggards (16%)

avoid change and rely on traditional products until its no longer available

concept

brief written description of a product or service; its technology, working principles, and forms; and what customer needs it would satisfy

Pioneer or breakthrough products

can change consumer preferences.

intangible

cannot be touched, tasted, or seen like a pure product can

empathy

caring, individualized attention to customers

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

premarket test

conducted before a product or service is brought to market to determine how many customers will try and then continue to use it

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

diversify

Robyn recently bought Voice over Internet Protocol (VoIP) phone service. A few of Robyn's friends bought VoIP before she did, but many other friends were interested in Robin's opinions of the new phone service. Robyn is a(n) __________ in this product category.

early adopter

The __________ diffusion of innovation group is crucial because few new products can be profitable until this large group buys them.

early majority

product development or product design

entails a process of balancing various engineering, manufacturing, marketing, and economic considerations to develop a product's form and features or a service's features

One of the potential benefits to a firm of introducing new-to-the-world products or services is

establishment of a completely new market.

Brainstorming

group activity used to generate ideas

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

lead users

innovative product users who modify existing products according to their own ideas to suit their specific needs

After a product has been launched, marketers must undertake a critical postlaunch review to determine whether the product and its launch were a success or failure and what additional resources or changes to the marketing mix are needed, if any. For a product that does move on, the firms can measure the success of the new product by interrelated factors that include all of the following except

its satisfaction of the firm's manufacturing requirements.

When the sequel to a movie eventually shows up on their regular television networks, this group might watch it.

laggards

When microwaves were new, they often cost over $300, were huge, and had numerous settings and options. Brenda and Garth waited, concerned about potential health hazards and wishing for more choices in the market. By the time they purchased a microwave, sales of microwaves had leveled off and prices had declined significantly. Brenda and Garth were part of the ___________ diffusion of innovation group.

late majority

Ronald 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

Outsourcing

practice in which they hire an outside firm to help generate ideas and develop new products and services

The diffusion of innovation theory is useful to marketers in helping them

predict which types of customers will buy their product immediately and later.

Late Majority (34%)

product has achieved its full market potential

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

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

decline stage

sales decline and the product eventually exits the market

maturity stage

sales reach their peak, so firms try to rejuvenate their products by adding new features or repositioning them

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

insepearable

services are produced and consumed at the same time Ex: haircut experience

innovation

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

diffusion of innovation

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

Early Majority (34%)

crucial because few new products and services can be profitable until this large group buys them

Many restaurants offer daily specials, appetizers, entrees, and desserts not listed on their standard menu. These daily specials primarily provide the new product benefit of

satisfying the changing needs of current and new customers.

beta testing

having potential consumers examine a product prototype in a real-use setting to determine its functionality, performance, potential problems, and other issues specific to its use

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

Innovation

Early Adapters (13.5%)

generally dont take much risk as innovators

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

maturity

One of the key characteristics of brainstorming sessions is

no idea is immediately accepted or rejected.

Many home design businesses volunteer to provide their latest products for tours-of-homes fundraisers because they know their new products will benefit from

observability

Fashion trends tend to experience ______ product life cycles.

short Correct

Product Life Cycle (PLC)

stage new products go through as they enter, get established, and leave the market

All of the following were considered a new-to-the-world product or service when introduced except -iTunes. -Blu-ray. -the Internet browser. -the Walkman portable cassette player. -the Mercedes mini sport utility vehicle, a smaller version of its larger SUVs.

the Mercedes mini sport utility vehicle, a smaller version of its larger SUVs.

tangibles

the appearance of physical facilities, equipment, personnel, and communication materials

prototype

the first physical form or service description of a new product, still in rough or tentative form, that has the same properties as a new product but is produced through different manufacturing processes, sometimes even crafted individually

first movers

the first to create the market or product category and become readily recognizable to consumers and thus establish a commanding and early market share lead

assurance

the knowledge and courtesy of employees and their ability to convey trust

concept testing

the process in which a concept statement that describes a product or a service is presented to potential buyers or users to obtain their reactions

growth stage

the product gains acceptance, demand and sales increase, and more competitors emerge in the product category

heterogeneity

the variability of the inputs and outputs of services, which causes services to tend to be less standardized and uniform than goods

Reliability

to perform service dependently and accurately

Adding new products is most likely to prompt consumers to purchase in which of the following industries? -Household appliances -Oil and gas -Video games -Writing utensils

video games

introduction stage

when the product category first launches and innovators buy product

Bev is assessing the results of a new product launch of a series of e-books for her bookstore. When evaluating the results, Bev will likely consider all of the following except

why it took her so long to consider the new product line.

Responsiveness

willingness to help customer and provide prompt service