Chapter 12

Now that the consumer demand is building for Miranda's new organic shampoo, she and her team face a new set of decisions. Which of the following is NOT one of the decision items on the agenda for the team discussion of place in the marketing mix for a new product launch? a. How much should be shipped initially to the stores? b. Are the packaging colors working well with the target markets? c. Should the manufacturer be involved in reordering decisions? d. Where should the merchandise be stored: at distribution centers or shipped directly to the stores? e. Which retailers are chosen to sell the product?

b. Are the packaging colors working well with the target markets?

If a few of Nintendo's customers are asked to try out a new video game that has not yet been released on the market, this is an example of a. premarket tests. b. beta testing. c. market testing. d. test marketing. e. concept testing.

b. beta testing.

Suppose that you work for an advertising agency and are brought into a meeting where everyone is asked to generate ideas for names for a new beach resort. You are engaged in __________, a form of new idea generation. a. consumer research b. brainstorming c. R&D d. geodemographic analysis e. licensing technology

b. brainstorming

If the __________ diffusion of innovation group is relatively small, the number of people who ultimately adopt the innovation likely will also be small. a. innovator b. early adopter c. early majority d. Laggard e. late majority

b. early adopter

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. a. leveling b. maturity c. decline d. growth e. introduction

b. maturity

When testing new products, most firms consider the question of whether testing products on animals a. should be done outside of the United States to avoid consumer backlash. b. should be done when the new product does not contribute to the health and well-being of human users. c. should be done with animal activists present. d. should be done only by companies large enough to be ethically responsible. e. should always be done in the animal's natural environment.

b. should be done when the new product does not contribute to the health and well-being of human users.

Brian 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. Brian is trying to identify innovators in his market, knowing these customers will a. not need any service or support when using the product. b. spread positive word of mouth to other physicians. c. reposition his products. d. create demand among the late majority. e. buy one for each office in their practices.

b. spread positive word of mouth to other physicians.

Which of the following was NOT a new-to-the-world product or service when it was introduced? a. the MP3 player b. the Mercedes mini sport utility vehicle, a smaller version of its larger SUVs c. Wi-Fi d. Microsoft's Windows operating system e. flat screen TVs

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

Microsoft's Windows operating system continues to dominate the market, even though it has been around for over twenty years. Windows will likely remain in the maturity stage of the product life cycle a. indefinitely. b. until a superior product comes along to replace it. c. unless Microsoft repositions Windows as an introductory stage product. d. until it rules the world. e. as long as the company doesn't change it.

b. until a superior product comes along to replace it.

Which of the following adopter categories refers to the last large group of buyers to enter a new product market? a. Early adopters b. Laggards c. Late majority d. Innovators e. Early majority

c. Late majority

Which of the following is NOT one of the five groups in the diffusion of innovation curve? a. Late majority b. Innovators. c. Non-adopters. d. Early adopters. e. Early majority.

c. Non-adopters.

The growth phase of the product life cycle is always dynamic. Which of the following does NOT occur in this phase? a. Some competitors will exit in an industry shakeout. b. Profits increase as sales increase. c. Price competition with protracted price wars erodes profits. d. Profits increase as economies of scale are attained. e. Some new competitors may enter the market with similar products.

c. Price competition with protracted price wars erodes profits.

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 a. observability. b. relative advantage. c. compatibility. d. complexity. e. trialability.

c. compatibility.

Firms can measure the success of a new product by all of the following factors EXCEPT a. satisfaction of its technical requirements. b. satisfactory performance. c. fewer competitors in the market. d. customer acceptance. e. satisfactory sales and profits.

c. fewer competitors in the market.

Whenever Donald considers upgrading his personal computer system, he consults with Jeremy, a knowledgeable friend who always has the newest technology. For Donald, Jeremy is a __________ in the diffusion of innovation curve. a. laggard b. late majority c. innovator d. early majority e. early adopters

c. innovator

During the __________ stage of the product life cycle, sales are low and profits are small or negative. a. maturity b. decline c. introduction d. leveling e. growth

c. introduction

Which of the following is NOT one of the four product life cycle stages? a. decline b. growth c. location d. introduction e. maturity

c. location

The Eiger Labs MPMan was the first mass-produced MP3 player sold in the United States. Eiger Labs was a __________ in the MP3 player market. a. concept tester b. market tester c. pioneer d. blockbuster e. early adopter

c. pioneer

Between concept testing and market testing, a firm should engage in which stage of the product development process? a. marketing research b. determining potential ROI c. product development d. securing financial backing e. Brainstorming

c. product development

Brian 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. Brian is trying to identify innovators in his market, knowing these customers will a. create demand among the late majority. b. reposition his products. c. spread positive word of mouth to other physicians. d. buy one for each office in their practices. e. not need any service or support when using the product.

c. spread positive word of mouth to other physicians.

A marketing professor in Ithaca, New York, 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 geographical area. a. pretesting b. product launch c. test marketing d. concept testing e. product development

c. test marketing

When McDonald's comes up with a new drink or sandwich for its restaurants, it often markets it in a dozen or so of its outlets. When the company does this, it is engaged in a. concept testing. b. pretesting. c. test marketing. d. product development. e. product launch.

c. test marketing.

Samples are often used for new products when __________ will influence the diffusion of the product. a. relative advantage b. compatibility c. trialability d. observability e. complexity

c. trialability

Beverly is assessing the results of a new product launch of a series of e-books for her bookstore. When evaluating the results, Beverly will likely consider all of the following EXCEPT a. whether the e-books function as expected. b. whether her customers are interested in the new books. c. why it took her so long to consider the new product line. d. whether the e-books are generating the expected level of sales. e. whether the e-books are generating the expected level of profit.

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

__________ is the process by which ideas are transformed into new products and services that will help firms grow. a. Reverse engineering b. Beta testing c. Concept testing d. Innovation e. Competition

d. Innovation

Barbara is using a test model of her firm's new inline skates to see whether they work according to the design specifications. Barbara is involved in a. product development. b. concept testing. c. product launch. d. alpha testing. e. test marketing.

d. alpha testing.

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 a. licensing technology. b. reverse engineering. c. clinical trials. d. customer input. e. R&D consortia.

d. customer input.

Which of the following is the correct sequence of new product adopters in the diffusion of innovation curve? a. innovators, early majority, early adopters, innovators, late majority, laggards b. early majority, late majority, early adopters, innovators, laggards c. innovators, late majority, early adopters, early majority, laggards d. innovators, early adopters, early majority, late majority, laggards e. early adopters, early majority, innovators, late majority, laggards

d. innovators, early adopters, early majority, late majority, laggards

When John began helping his favorite uncle Burton with his finances, he discovered his uncle was still renting a rotary-dial telephone from the phone company. Uncle Burton had paid thousands of dollars in rental fees over the previous forty years. Uncle Burton is a __________ in the diffusion of innovation process for telephones. a. early adopter b. innovator c. late majority d. laggard e. early majority

d. laggard

When Dr. Putt invented his Eye-Over-the-Ball (EOB) golf putting device, he knew during the introductory stage a. sales would slow down, profits would peak, and early adopters of golf equipment would be his major customers. b. sales would level off, profits would decline, and mature golfers would be attracted to his product. c. sales would rise quickly, profits would jump, and even laggards would buy his product. d. sales would be low and profits nonexistent, but he would attract golf equipment innovators. e. sales would be low, profits would be high, and all potential golfers would jump at the opportunity to buy his product.

d. sales would be low and profits nonexistent, but he would attract golf equipment innovators

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 a. reduction in cost of ingredients. b. keeping up in a market where sales come mostly from new products. c. avoiding market saturation from products that have been on the market for a long time. d. satisfying the changing needs of current and new customers. e. creating diversification and reducing risk.

d. satisfying the changing needs of current and new customers.

Samples are often used for new products when __________ will influence the diffusion of the product. a. observability b. compatibility c. complexity d. trialability e. relative advantage

d. trialability

When automobile manufacturers introduced SUVs, they distributed and promoted them in the United States, but not in Europe where gasoline is heavily taxed and roads are much smaller. Car manufacturers recognized that this new line of cars a. did not provide benefits that were observable. b. involved technology that was too complex. c. could not be easily tried by consumers. d. were not compatible with European market conditions. e. provided equivalent relative advantage for both European and U.S. customers.

d. were not compatible with European market conditions.

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 a. premarket tests. b. market testing. c. concept testing. d. product development. e. alpha testing.

e. alpha testing.

The process by which the use of a new product or service spreads throughout a market group is referred to as a. lead user dispersion. b. new product introduction. c. product development diffusion. d. the product life cycle. e. diffusion of innovation.

e. diffusion of innovation.

The __________ diffusion of innovation group is crucial because few new products can be profitable until this large group buys them. a. early adopter b. laggard c. innovator d. late majority e. early majority

e. early majority

Which of the following is LEAST likely to be a source of ideas for new products? a. licensing technology b. brainstorming c. R&D efforts d. consumer research e. geodemographic segmentation

e. geodemographic segmentation

Concept testing is important because it can a. lead to immediate rollout of the final product. b. reduce the potential loss of sales during the decline stage. c. help the firm to refine the promotional plans. d. increase product development costs. e. help a firm avoid the costs of unnecessary product development

e. help a firm avoid the costs of unnecessary product development

One of the key characteristics of brainstorming sessions is a. only the marketing team is included in these sessions. b. everyone must come up with ideas. c. the manager should always make the final decision. d. the first idea is almost always the best idea. e. no idea is immediately accepted or rejected.

e. no idea is immediately accepted or rejected.

Before the development of computer-assisted design software, many firms handcrafted __________, wooden or clay models that served as rough physical representations of a new product. a. storyboards b. designer models c. premarket tests d. blockbusters e. prototypes

e. prototypes

Early personal computers cost several thousand dollars, allowing competitors a. to focus on making improved versions. b. to promote alternative brands in that product category. c. to spend less on introductory advertising. d. to focus on creating demand for their brand. e. to introduce lower-priced alternatives.

e. to introduce lower-priced alternatives.

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 a. alpha testing. b. beta testing. c. test marketing. d. product launch. e. concept testing.

a. alpha testing.

If a few of Nintendo's customers are asked to try out a new video game that has not yet been released on the market, this is an example of a. beta testing. b. test marketing. c. concept testing. d. market testing. e. premarket tests.

a. beta testing.

One reason auto companies spend millions on racing cars is that they offer the opportunity to test new designs and technology under extreme conditions. Car racing provides an opportunity for Select one: a. beta testing. b. pretesting. c. alpha testing. d. test marketing. e. concept testing.

a. beta testing.

During the ___________ stage of the product life cycle, firms either position themselves for a niche market of loyal consumers or they exit the market. a. decline b. introduction c. maturity d. leveling e. growth

a. decline

During the __________ stage of the product life cycle, sales rise, profits rise rapidly, and there are a small but increasing number of competitors. a. growth b. introduction c. maturity d. leveling e. decline

a. growth

By the time BMW got into the mini-SUV market, sales had leveled off and were even starting to decline. BMW had to target its marketing efforts toward the __________ diffusion of innovation group. a. late majority b. innovator c. early adopter d. laggard e. early majority

a. late majority

When microwaves were new, they often cost over $300, were huge, and had numerous settings and options. Brenda and Bart 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 Bart were part of the ___________ diffusion of innovation group. a. late majority b. innovator c. laggard d. early majority e. early adopter

a. late majority

Ron sells commercial-grade tools to building contractors. Whenever he visits his customers, he looks to see whether 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. a. lead users b. market testers c. concept testers d. reverse engineers e. early adopters

a. lead users

During the __________ stage of the product life cycle, sales peak and profits begin to decline as competition becomes intense. a. maturity b. growth c. introduction d. decline e. leveling

a. maturity

Even if they succeed, new-to-the-world products are a. not adopted by everyone at the same time. b. not subject to the law of first movers. c. typically very short-lived. d. not always profitable. e. sometimes copycat brands.

a. not adopted by everyone at the same time.

Many home design businesses volunteer to provide their latest products for tours-of-homes fundraisers because they know their new products will benefit from Select one: a. observability. b. complexity. c. compatibility. d. trialability. e. relative advantage.

a. observability.

If a new product concept gets positive evaluations from potential customers during concept testing, the next step for a firm is a. product development. b. market testing. c. launching the product. d. Brainstorming. e. reverse engineering.

a. product development.

What type of event exposes retailers to large numbers of new products in a concentrated location? a. trade shows b. browser shows c. premarket demonstrations d. trade promotions e. hosted shows

a. trade shows

Kristina created a virtual prototype of her new line of swimwear on a website to show to consumers. Kristina will ask consumers what they think of the clothing, but the most important question is a. whether they would purchase the swimwear if it becomes available. b. in which season she should introduce the product. c. what wholesale price should be charged. d. what promotional plan will work best. e. what retailers she should use to sell the swimwear.

a. whether they would purchase the swimwear if it becomes available.