Chapter 12

Lorraine 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 Lorraine is part of is engaged in A. premarket testing. B. product launch. C. test marketing. D. product development. E. concept testing.

a

Which of the following is the correct sequence of new product adopters in the diffusion of innovation curve? A. innovators, early adopters, early majority, late majority, laggards B. early adopters, early majority, innovators, late majority, laggards C. innovators, early majority, early adopters, innovators, late majority, laggards D. early majority, late majority, early adopters, innovators, laggards E. innovators, late majority, early adopters, early majority, laggards

a

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. market testing. C. premarket tests. D. test marketing. E. concept testing.

a Beta testing uses potential consumers, who use the product in a real-use setting to determine its performance.

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 A. e-books. B. refrigerators. C. the VCR. D. smartphones. E. None of these. No product can stay in the maturity phase and survive for very long.

b

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. innovator B. laggard C. late majority D. early majority E. early adopter

c

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. reverse engineering. B. licensing technology. C. customer input. D. R&D consortia. E. clinical trials.

c

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. Where should the merchandise be stored: at distribution centers or shipped directly to the stores? C. Which retailers are chosen to sell the product? D. Are the packaging colors working well with the target markets? E. Should the manufacturer be involved in reordering decisions?

d

During the __________ stage of the product life cycle, sales are low and profits are small or negative. A. introduction B. leveling C. maturity D. growth E. decline

a

Pioneer or breakthrough products A. will likely result in late maturity buying. B. can change consumer preferences. C. incorporate reverse engineering outputs. D. require the use of concept testing services.

b Pioneer products establish a completely new market or radically change both the rules of competition and consumer preferences in a market.

Even if they succeed, new-to-the-world products are A. not always profitable. B. not adopted by everyone at the same time. C. sometimes copycat brands. D. not subject to the law of first movers. E. typically very short-lived.

b The adoption of an innovative product or service spreads through the population over a period of time and generally follows a bell-shaped curve (called the diffusion of innovation curve). If a product succeeds, that means it is profitable.

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. product development E. concept testing

c

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. pretesting. B. product launch. C. test marketing. D. product development. E. concept testing.

c

__________ is the process by which ideas are transformed into new products and services that will help firms grow. A. Beta testing B. Concept testing C. Innovation D. Reverse engineering E. Competition

c

Cathy 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. A. introduction B. growth C. evaluation D. maturity E. decline

d

Which of the following is LEAST likely to be a source of ideas for new products? A. R&D efforts B. licensing technology C. consumer research D. geodemographic segmentation E. brainstorming

d

__________ are special incentives offering reduced prices for a limited time, offered to retailers to get them to try a new product. A. Loss leaders B. Push prices C. Market skimming incentives D. Introductory price promotions E. Distribution rebates

d

All of the following are ways that manufacturers use promotion to generate demand for new products with consumers EXCEPT A. short-term price reductions. B. coupons. C. rebates. D. advertising. E. coordination of delivery and storage.

e

The __________ is a specific price at which manufacturers encourage retailers to sell a product. A. key price point B. slotting fee C. perceived value D. retail margin E. manufacturer's suggested retail price

e

Which of the following would NOT be part of the launch of a new product? A. educational efforts for complex or conceptually new products B. technical support staff for technical products C. determining the price for the product D. incentives for distributors E. starting to make preliminary decisions about the target market

e

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. laggard C. late majority D. early majority E. early adopter

e Early adopters, who are not the very first buyers of a new product (those are the innovators) but who still buy very early in the product's life, are important to the diffusion of the products because they are often opinion leaders. If there are relatively few early adopters to serve as opinion leaders, the market for the product is likely to be small

The __________ step in the product development process is critical, requiring tremendous resources and extensive coordination of all aspects of the marketing mix. A. pretesting B. product launch C. post-testing D. product development E. evaluation of results

b

At the end of a brainstorming session, participants are often asked to A. identify the worst ideas. B. defer to management for the final decision. C. identify which ideas each person proposed. D. vote on the best ideas. E. propose one more new idea each.

d

Bob and George live in the United States. Bob recently asked for George's cell phone number, but George said he didn't have one. George would probably be considered a(n) __________ in the diffusion of innovation process. A. innovator B. laggard C. late majority D. early majority E. early adopter

b

During the __________ stage of the product life cycle, sales peak and profits begin to decline as competition becomes intense. A. introduction B. leveling C. maturity D. growth E. decline

c

Innovators are a critical group of new product adopters because they A. are the major source of innovation. B. act as reverse engineering consultants. C. help with test marketing. D. help the product gain market acceptance. E. extend the product life cycle.

d As the first group to adopt a new product, innovators help the product to gain initial market acceptance.

Between concept testing and market testing, a firm should engage in which stage of the product development process? A. securing financial backing B. marketing research C. brainstorming D. determining potential ROI E. product development

e

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. why it took her so long to consider the new product line. B. whether the e-books are generating the expected level of profit. C. whether the e-books are generating the expected level of sales. D. whether her customers are interested in the new books. E. whether the e-books function as expected.

a

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. spread positive word of mouth to other physicians. B. buy one for each office in their practices. C. reposition his products. D. create demand among the late majority. E. not need any service or support when using the product.

a

During the __________ stage of the product life cycle, there are few but an increasing number of competitors. A. growth B. introduction C. maturity D. decline E. innovation

a

Which of the following adopter categories refers to the last large group of buyers to enter a new product market? A. Late majority B. Early majority C. Laggards D. Early adopters E. Innovators

a

In one test before product launch, customers try a sample product and are then surveyed to understand whether they would buy/use the product again. This is known as A. premarket testing. B. market testing. C. alpha testing. D. concept testing. E. pre-launch testing.

a Premarket tests are conducted to determine whether the customer will buy/use the product again. This is done to allow the firm to evaluate the product's likely success before committing to the cost of a test market.

If a new product concept gets positive evaluations from potential customers during concept testing, the next step for a firm is A. market testing. B. product development. C. brainstorming. D. reverse engineering. E. launching the product.

b

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. provided equivalent relative advantage for both European and U.S. customers. B. were not compatible with European market conditions. C. did not provide benefits that were observable. D. involved technology that was too complex. E. could not be easily tried by consumers.

b

When conducting exploratory concept testing for her firm's new Internet anti-piracy software, Dee knows the most important question is A. how long it will take to bring the software to market. B. whether respondents would purchase the software if it becomes available. C. who will determine the price to be charged. D. where the product should be sold. E. which computer trade show will be used to introduce the product.

b

Which of the following is NOT one of the five groups in the diffusion of innovation curve? A. Innovators. B. Non-adopters. C. Late majority. D. Early majority. E. Early adopters.

b

Which of the following is NOT one of the four product life cycle stages? A. introduction B. location C. maturity D. growth E. decline

b

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

b The Mercedes mini SUV was a variant on an existing product.

A(n) __________ is a fee paid by manufacturers to get new products into stores or to gain more or better shelf space for products. A. facilitating payment B. introductory price promotion C. slotting allowance D. stocking premium E. place holder

c

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. test marketing. B. product launch. C. alpha testing. D. product development. E. concept testing.

c

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. premarket tests B. blockbusters C. prototypes D. storyboards E. designer models

c

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

c

Which of the following is NOT a stage in the product life cycle? A. introduction B. growth C. evaluation D. maturity E. decline

c

For new product marketers, early adopters are important because they tend to be A. few in number. B. the first to adopt a new product. C. opinion leaders. D. fond of prototypes. E. alpha testing enthusiasts.

c Early adopters, who are not the very first buyers of a new product (those are the innovators) but who still buy very early in the product's life, are important to the diffusion of the products because they are often opinion leaders

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. innovator B. laggard C. late majority D. early majority E. early adopter

c The late majority is the last group to enter a new product market after sales have leveled off and prices have dropped

During the __________ stage of the product life cycle, sales rise, profits rise rapidly, and there are a small but increasing number of competitors. A. introduction B. leveling C. maturity D. growth E. decline

d

Eric is a sales rep for an established building materials manufacturer. Business is good, but he is concerned that the company has spent little on new product development and has not created a new product in over five years. Without new products, Eric can only market to his current customers or A. diversify. B. intensify his prototyping. C. expand his early adopter market segment. D. market the same products to similar customers. E. focus on concept testing.

d

Successful first movers create a market or a product category. They often benefit from being readily recognizable to consumers and A. not having to pay advertising expenses. B. using prototypes to dominate the market. C. not needing to do test marketing. D. establishing an early market share lead. E. motivating laggards to buy their products.

d

When Toyota introduced hybrid cars, there were waiting lists to buy them. Then Honda and a few other manufacturers entered the market, shifting the product life cycle for hybrid cars into the __________ stage of the product life cycle. A. introduction B. leveling C. maturity D. growth E. decline

d

When a product is successful in the introductory stage of the product life cycle, A. it moves directly into the maturity stage. B. it is most likely to begin to launch spinoffs. C. competition becomes less important. D. it may start to see profits toward the end of this stage. E. marketing costs increase significantly.

d

As soon as she saw one, Hillary wanted a flat-screen television, but she was worried about making the wrong choice. She waited until there were alternatives in the market with lower prices and improved quality. Hillary is part of the __________ diffusion of innovation group. A. innovator B. laggard C. late majority D. early majority E. early adopter

d Hillary has waited for a more competitive market with lower prices; this occurs when the early majority is adopting the product

The __________ diffusion of innovation group is crucial because few new products can be profitable until this large group buys them. A. innovator B. laggard C. late majority D. early majority E. early adopter

d The early majority is the first large group to adopt the product. Without this group, profits are unlikely to materialize.

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

e Price competition and price wars are more likely to emerge in the maturity stage.

Firms can measure the success of a new product by all of the following factors EXCEPT A. satisfaction of its technical requirements. B. fewer competitors in the market. C. satisfactory sales and profits. D. customer acceptance. E. satisfactory performance.

b

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. what retailers she should use to sell the swimwear. B. whether they would purchase the swimwear if it becomes available. C. what wholesale price should be charged. D. what promotional plan will work best. E. in which season she should introduce the product.

b

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. A. relative positioning B. compatibility C. observability D. complexity E. trialability

b

The CEO of David's firm just came back from a business seminar, and he called David into his office. He stated, "I just found out about the product life cycle curve in a strategy seminar. This is a great tool. I want you to drop whatever you're doing and inventory all of our products to determine exactly where they are in the product life cycle." David needs to think fast for a good answer because he knows that A. the product life cycle is not a useful concept. B. it is often impossible to identify with precision where a product is in the product life cycle. C. the product life cycle is not helpful in companies like his that pay attention to diffusion of innovation. D. the idea has been discredited by recent research. E. his job may be threatened by the answer.

b

The pharmaceutical industry often justifies the high prices for new drugs by arguing that it researches as many as one hundred new compounds before it comes up with one __________, an extremely successful product that pays for the costs associated with the other attempts to develop new products. A. standout B. blockbuster C. first mover D. pioneer E. premium product

b

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. early adopters B. market testers C. lead users D. reverse engineers E. concept testers

c

The Eiger Labs MPMan was the first mass-produced MP3 player sold in the United States. Eiger Labs was a(n) __________ in the MP3 player market. A. blockbuster B. early adopter C. pioneer D. market tester E. concept tester

c

The diffusion of innovation theory focuses on A. the geographic boundaries of innovation. B. the relationship between pioneer brands and imitators. C. the psychological traits of innovators. D. the rate at which consumers are likely to adopt a new product or service. E. the way a product moves through the product life cycle.

d

What type of event exposes retailers to large numbers of new products in a concentrated location? A. hosted shows B. browser shows C. premarket demonstrations D. trade shows E. trade promotions

d

Robin recently bought Voice over Internet Protocol (VoIP) phone service. A few of Robin's friends bought VoIP before she did, but many other friends were interested in Robin's opinions of the new phone service. Robin is a(n) __________ in this product category. A. innovator B. laggard C. late majority D. early majority E. early adopter

e

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. introduction B. leveling C. maturity D. growth E. decline

c

Many home design businesses volunteer to provide their latest products for tours-of-homes fundraisers because they know their new products will benefit from A. relative advantage. B. compatibility. C. observability. D. complexity. E. trialability.

c

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 it rules the world. C. until a superior product comes along to replace it. D. unless Microsoft repositions Windows as an introductory stage product. E. as long as the company doesn't change it.

c

When Dr. Putt invented his Eye-Over-the-Ball (EOB) golf putting device, he knew during the introductory stage A. sales would rise quickly, profits would jump, and even laggards would buy his product. B. sales would level off, profits would decline, and mature golfers would be attracted to his product. C. sales would slow down, profits would peak, and early adopters of golf equipment would be his major customers. 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

By adding new product lines beyond its core business of computer software, like the Zune MP3 player and Xbox 360 game system, Microsoft primarily benefits by A. keeping up in a market where sales come mostly from new products. B. satisfying the changing needs of the technological research staff. C. avoiding market saturation from products that have just been introduced to the market. D. creating diversification and reducing risk. E. spreading out production costs.

d If Microsoft were totally dependent on software sales, a shift away from Windows would damage its sole market. By diversifying into game systems and MP3 players, Microsoft seeks to be less dependent on any one market.

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 A. keeping up in a market where sales come mostly from new products. B. satisfying the changing needs of former customers. C. avoiding market penetration from products that have been on the market for a long time. D. creating diversification and reducing risk. E. taking advantage of a long product cycle.

a

In many cases, pioneers lose their market lead and initial market share to imitators who A. capitalize on the pioneers' weaknesses. B. create similar products with reduced value to consumers. C. utilize alpha-beta testing. D. ignore patents and copyrights. E. target late maturity consumers.

a

Inkjet printers were a big improvement over the dot matrix printers they replaced. Inkjet printers gained rapid acceptance in the marketplace primarily because of their A. relative advantage. B. compatibility. C. observability. D. complexity. E. trialability.

a

One of the potential benefits to a firm of introducing new-to-the-world products or services is A. cost savings. B. late majority marketing. C. establishing a completely new market. D. the ability to avoid paying pioneers for new product development. E. capitalizing on existing consumer preferences.

c

In the diffusion of innovation process, innovators enjoy taking risks and are regarded as highly knowledgeable. Marketers want to identify innovators because A. they prefer products from established market leaders. B. other consumers defer to their judgment, creating the opportunity for word-of-mouth referrals. C. they are especially price conscious. D. they are easily influenced by reminder advertising. E. they encourage competitors to enter the market.

b As the first group to adopt a new product, innovators help the product to gain initial market acceptance. Innovators may recommend the product to friends, creating word-of-mouth referrals.

__________ involves taking apart a product, analyzing it, and creating an improved product that does not infringe on the competitor's patents. A. Reverse innovation B. Reverse engineering C. Selective dissection D. Redistribution E. Creative destruction

b

One of the key characteristics of brainstorming sessions is A. no idea is immediately accepted or rejected. B. everyone must come up with ideas. C. the first idea is almost always the best idea. D. only the marketing team is included in these sessions. E. the manager should always make the final decision.

a

When a manufacturer launches a new product, it may offer __________ to wholesalers and retailers, including introductory price promotions, special events, and personal selling. A. trade promotions B. trade shows C. trade-in allowances D. trade discounts E. trade budgets

a

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(n) __________ in the diffusion of innovation curve. A. innovator B. laggard C. late majority D. early majority E. early adopters

a

Which of the following is NOT a characteristic of products in the maturity stage of the product life cycle? A. Laggards are a major focus of marketing efforts. B. Price competition is intense. C. Marketing costs increase as firms defend their market share. D. The market may become saturated because nearly all potential customers have adopted the product. E. To increase the customer base, firms consider entry into new markets and new market segments.

a

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. relative advantage. B. compatibility. C. observability. D. complexity. E. trialability.

a These operating systems enjoyed a substantial relative advantage compared to DOS.

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 A. pretesting. B. beta testing. C. test marketing. D. alpha testing. E. concept testing.

b A beta test is a test of the product conducted by key customers. Participation in NASCAR and other racing organizations offers auto companies a chance to do this.

How is consumer panel data collected during the test marketing phase of a new product introduction? A. Panelists complete a questionnaire about the product. B. Panelists scan their receipts on a home scanning device. C. Stores provide sales data to companies. D. Consumers voluntarily go to a website to record their preferences. E. Focus groups are held in key markets.

b The consumer panel data is collected by panelists scanning in their receipts using a home scanning device

Early personal computers cost several thousand dollars, allowing competitors A. to focus on creating demand for their brand. B. to promote alternative brands in that product category. C. to spend less on introductory advertising. D. to focus on making improved versions. E. to introduce lower-priced alternatives.

e

In the United States, most consumer packaged goods found in grocery and discount stores are in the __________ stage of the product life cycle. A. growth B. pioneer C. introduction D. decline E. maturity

e

Paul listens to music on his iPod and iPhone, but he still buys vinyl records at his local music store on occasion, although they are getting harder to find. Vinyl records are in the __________ stage of the product life cycle. A. introduction B. growth C. evaluation D. maturity E. decline

e

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. R&D B. licensing technology C. consumer research D. geodemographic analysis E. brainstorming

e

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

b Customers' tastes change, both over time and depending on the situation. By offering specials that offer variety, the restaurant seeks to satisfy these changing needs.

The __________ diffusion of innovation group is the last large group of consumers to adopt a new product or service. A. innovator B. laggard C. late majority D. early majority E. early adopter

c

The diffusion of innovation theory is useful to marketers in helping them A. adjust to the performance life cycle. B. avoid the cost of concept testing. C. predict which types of customers will buy their product immediately and later. D. predict how long it will take for a new product to gain market acceptance. E. forecast sales for a new product.

c

The process by which the use of a new product or service spreads throughout a market group is referred to as A. new product introduction. B. lead user dispersion. C. diffusion of innovation. D. the product life cycle. E. product development diffusion.

c

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. introduction B. leveling C. maturity D. growth E. decline

e

A major limitation in the use of internal R&D departments for new idea generation is that A. few scientists have ideas. B. they tend to be dissolved once sufficient ideas have been generated. C. they tend to create too many blockbusters. D. few scientists have practical ideas. E. the costs tend to be quite high.

e Although internal R&D departments are widely used by firms in industries such as pharmaceuticals and computer software, they can be very expensive to maintain

Zappos.com, an online shoe store, worked to overcome the problem of new product __________ with its easy, no-hassle return procedure. A. relative advantage B. compatibility C. observability D. complexity E. trialability

e By making returns easy, consumers are able to try the shoes with the confidence that they can return them if they do not fit.

Which of the following is NOT one of the benefits to a firm of new product development? A. reduced costs of production. B. satisfying the changing needs of current and new customers. C. avoiding market saturation from products that have been on the market for a long time. D. creating diversification and reducing risk. E. keeping up in a market where sales come mostly from new products.

a

__________ are customers who modify existing products according to their own ideas to suit their specific needs. A. Early adopters B. Market testers C. Lead users D. Reverse engineers E. Concept testers

c

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. concept testing. B. market testing. C. premarket tests. D. product development. E. alpha testing.

e The Iron Mike is a form of alpha testing because it is done within the company, taking the place of a human who might hit the ball repeatedly

Concept testing is important because it can A. help the firm to refine the promotional plans. B. lead to immediate rollout of the final product. C. help a firm avoid the costs of unnecessary product development. D. reduce the potential loss of sales during the decline stage. E. increase product development costs.

c

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. product launch. C. test marketing. D. beta testing. E. concept testing.

a

During the introduction stage of a product's life cycle, typical consumers are A. early adopters. B. innovators. C. pioneers. D. early majority. E. laggards.

b

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(n) __________ in the diffusion of innovation process for telephones. A. innovator B. laggard C. late majority D. early majority E. early adopter

b

The product life cycle is theoretically __________ shaped with regard to sales and profits. A. Y B. lightning bolt C. bell D. circle E. flat line

c

Samples are often used for new products when __________ will influence the diffusion of the product. A. relative advantage B. compatibility C. observability D. complexity E. trialability

e rialability refers to a consumer's ability to try a new product before buying it. Samples make this process easier.