Marketing Chapter 12

Laggards make up roughly ______ of the market.

16%

While late to the party, the late majority category of consumers is still significant, making up roughly ______ of the total consumer market.

34%

In terms of their place on the diffusion of innovation curve, innovators are the ______ category of consumers.

first

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

It will eventually decline.

maturity

stage of the product life cycle is characterized by the adoption of the product by the late majority and good profitability.

Product development or product design entails a process of balancing which types of considerations? (Choose every correct answer.)

Engineering Marketing Manufacturing

True or False: 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

Innovators

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

When firms decide to develop new products, it is typically a long process that is broken into ______ stages.

six

introduction

stage of the product life cycle is characterized by initial losses to the firm due to its high start-up costs and low levels of sales revenue as the product begins to take off.

growth

stage of the product life cycle, the typical consumers are early adopters, and there are increases in the number of competitors.

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%

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

A test kitchen at a fast food restaurant

Which of the following processes could be considered an acceptable method for generating ideas? (Choose every correct answer.)

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

What are the four stages that a product passes through as it enters, gets established in, and ultimately leaves the marketplace?

Decline Maturity Growth Introduction

Which of the following factors influence how rapidly a product will move through the product life cycle? (Choose every correct answer.)

How valuable the product is to the consumer How different the product is from other offerings in the market

True or False: 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

Idea generation

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

Innovation

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

Without innovation, what options would be available to firms? (Choose every correct answer.)

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

What might a concept include along with a brief written description of the product? (Choose every correct answer.)

Customer needs it satisfies Visual images

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

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

Form and features

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.

______ are consumers who like to avoid changes and rely on traditional products until they are no longer available.

Laggards

Which of the following industries are most likely to participate in a research consortium? (Choose every correct answer.)

Pharmaceuticals High-tech

What are key characteristics of the introduction stage? (Choose every correct answer.)

Profits are low Start-up costs are high

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

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 are the key characteristics of the growth stage of the product life cycle? (Choose every correct answer.)

Sales rise Competitors increase

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 life cycle

What objectives do firms have in adding new products, services, and processes to their offerings? (Choose every correct answer.)

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

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

Video games

Some markets demand a higher frequency of new product releases than others. In which of the following markets do sales come from new products? (Choose every correct answer.)

Video games Books Movies

What does a postlaunch review help determine? (Choose every correct answer.)

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

concept

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

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

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

advantage within the diffusion process

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

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

One advantage of product innovation is that a firm can expand into different product categories. The point of the risk ______ strategy is that if some products in one category are competing poorly, others in another category could be doing very well.

diversification

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

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

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

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

life cycle

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

maturity

Diffusion

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.

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

product launch

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 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

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