Chapter 12

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

True

Which product has the most observability?

Cordless screwdriver

___________ 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.

Diffusion

When Subway introduced a new Southwestern Club sandwich in South Florida before launching it nationwide, it was engaging in ______

test marketing

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. product launch 6. evaluation of results

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%

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

Decline

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

Which of the following statements about firms' expectations regarding the success of internal research and development efforts is true?

Firms do not track the profitability of their R&D efforts because some research pays off many years later.

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

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

Which of the following processes could be considered an acceptable method for generating ideas?

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

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

Without innovation, what options would be available to firms?

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

What objective(s) do firms have in adding new products, services, and processes to their offerings? (Select all that apply.)

To satisfy the changing needs of consumers To keep customers from getting bored with existing products

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

Video games

What does a postlaunch review help determine? (Select all that apply.)

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

What can marketers learn from the diffusion of innovation theory? (Select all that apply.)

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

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

adopters

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

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

When a group works together to generate a number of ideas and then determines which is the best idea, this is referred to as _______

brainstorming

When a group works together to generate a number of ideas and then determines which is the best idea, this is referred to as ___________

brainstorming

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

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

complexity

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

A concept can be as simple as a brief written description of the product that might also include ______. (Select all that apply.)

customer needs it satisfies visual images

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

how many customers will try and then continue to use it

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

idea

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

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

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

innovation

While the ______ is first to adopt the item, the ______ adopts next.

innovator; early adopter

__________ are buyers of a product or service who are the first ones to adopt it.

innovators

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

introduction

When the ________ , majority of consumers enters the market, the market has already reached its full market potential.

late

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

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

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

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

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

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

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

A test kitchen at a fast food restaurant

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?

Amana's microwave oven in 1967 Pampers disposable diapers in the early 1960s

While pioneers capture an early and commanding market share, imitators often enter the market and gain which advantages? (Select all that apply.)

Can offer better products at lower prices Focus marketing efforts on demand for their brand Capitalize on the pioneer brand's weaknesses

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

Concept

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

Concept

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

Product development or product design entails a process of balancing which types of considerations?

Engineering Manufacturing Marketing

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

Form and features

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 from being a first mover.

Having to establish the market all alone

Which of the following industries are most likely to participate in a research consortium? (Select all that apply.)

High-tech Pharmaceuticals

Which of the following traits are associated with the innovators consumer group?

Highly knowledgeable (about the product/service) Risk takers

Listening to customer input helps firms with which tasks?

Idea generation and product development

Firms solicit customer input through which methods? (Select all that apply.)

Informal discussions Surveys Focus groups

Put the stages in the product life cycle in order from first to last, with the first stage at top. Position 1 of 4 Introduction correct toggle button unavailable Introduction

Introduction Growth maturity decline

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 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

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

Licensing

During the _________ stage of the product life cycle, the product category first launches and innovators start buying products.

Maturity

What are some advantages experienced by pioneer firms over later entrants?

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

Some markets demand a higher frequency of new product releases than others. In which of the following markets do sales come from new products?

Movies Books Video games

or breakthrough products are brand new products that establish a completely new market or radically change both the rules of competition and consumer preferences in a market.

Pioneer

If a firm has a positive result from the market testing the next step is known as _________ launch

Product

If a firm has a positive result from the market testing the next step is known as _______________ launch

Product

Identify potential impacts to the company when a new product launch is a failure. (Select all that apply.)

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

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

Test marketing

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

The product development process

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

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

diversify

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

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

low; easy

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

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

outsourcing

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

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

research development

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

___________ 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

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

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 assimilation

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.

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