Chapter 12- MKT
What objective(s) do firms have in adding new products, services, and processes to their offerings?
To satisfy the changing needs of consumers To keep customers from getting bored with existing products
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
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?
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?
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
What are the four stages that a product passes through as it enters, gets established in, and ultimately leaves the marketplace?
Decline Maturity Introduction Growth
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.
Diffusion
Without innovation, what options would be available to firms?
Take current products to new markets Continue to market current products to current customers
Early are the category of consumers who begin to use a product or service immediately following innovators.
adopters
When Burger King introduced the new Whopper Bar to a limited geographical area prior to a national launch, it was engaging in ______.
test marketing
Listening to customer input helps firms with which tasks?
Idea generation and product development
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
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
Which product has the most observability?
Cordless screwdriver
Firms solicit customer input through which methods?
Focus groups Surveys Informal discussions
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 factors influence how rapidly a product will move through the product life cycle?
How valuable the product is to the consumer How different the product is from other offerings in the market
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
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
During the stage of the product life cycle, the product category first launches and innovators start buying products.
introduction
The stage of the life cycle for a new product or service category usually starts with a single firm, and innovators are the ones to try the new offering.
introduction
Key characteristics of the introduction stage are that ______.
profits are low start-up costs are high
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
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
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
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
What are the key characteristics of the growth stage of the product life cycle?
Competitors increase Sales rise
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.
Product development or product design entails a process of balancing which types of considerations?
Manufacturing Engineering Marketing
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
Targeting the wrong segment and poor positioning are contributing factors to the high rate of failure for new products.
True
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
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
Once a product stops generating sales or profits, or sales and profits are very low, the product is in the stage of the product life cycle and eventually exits the market.
decline
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
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
During the ______ stage of the product life cycle, the market for the product usually becomes saturated.
maturity
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
The stage of the product life cycle is characterized by the adoption of the product by the late majority and good profitability.
maturity
During the ______ 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.
maturity stage
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 diversification
When a product goes into the stage of the product life cycle, it eventually exits the market.
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 pioneers capture an early and commanding market share, imitators often enter the market and gain which advantages?
Capitalize on the pioneer brand's weaknesses Can offer better products at lower prices Focus marketing efforts on demand for their brand
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
What is a key characteristic of the maturity stage?
Firms defend market share
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
A concept can be as simple as a brief written description of the product that might also include ______.
customer needs it satisfies visual images
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
is an agreement through which one firm buys the rights to use the technology or ideas of another research-intensive firm.
Licensing
While late to the party, the late majority category of consumers is still significant, making up roughly ______ of the total consumer market.
34%
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
A firm's and department consists of scientists who work to solve complex problems and develop new ideas.
Blank 1: research, R, or internal research Blank 2: development or D
refers to a group session in which participants work together to generate new ideas.
Brainstorming
What are some advantages experienced by pioneer firms over later entrants?
Establish an early market share lead More likely to command a greater market share over a longer period More readily recognizable to consumers
After a new product is launched, what is the next step of the product development process?
Evaluation of results
New products must be targeted toward end consumers.
False
Prototypes are never crafted individually.
False
Which of the following industries are most likely to participate in a research consortium?
High-tech Pharmaceuticals
generation refers to the first stage in the process by which firms develop a new product.
Idea or Concept
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
Put the stages in the product life cycle in order from first to last, with the first stage at top.
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
When the majority of consumers enters the market, the market has already reached its full market potential.
Late
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 Video games Books
Some analysts have attributed the success and quick diffusion of the Apple iPod in part to the white earbuds. At the time, earbuds were not seen as often, and most headphones were black, not white. As knowledge of the iPod spread, the white earbuds could be seen even if the iPod itself was out of sight. This is an example of which of the factors that affect speed of diffusion?
Observability
is when a company hires an outside firm to help accomplish a task.
Outsourcing
Identify potential impacts to the company when a new product launch is a failure.
Product may not recover from failure Negative financial impacts Company may fail
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
Which of the following processes could be considered an acceptable method for generating ideas?
Researching competitors' products and services Conducting consumer research Brainstorming within the firm Communicating with a firm's R&D department
Which of the following traits are associated with the innovators consumer group?
Risk takers Highly knowledgeable (about the product/service)
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
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
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
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
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
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
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
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
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
After product development, firms conduct premarket tests, which help determine ______.
how many customers will try and then continue to use it
While the ______ is first to adopt the item, the ______ adopts next.
innovator; early adopter
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
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
The early represents the earlier half of the two largest categories of consumers on the diffusion of innovation curve.
majority
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
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
In order to accurately evaluate the new product launch, marketers must undertake a critical ______ review to determine whether the product and its launch were a success or failure.
postlaunch
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
If a firm has a positive result from the market testing the next step is known as launch.
product
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
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
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
