MKTG 370 - Exam 2 Chapter 12

As _____, one of the advantages that pioneers have is they create a new market or product category, establishing a commanding initial market share lead.

first movers Pioneers have the advantage of being first movers—as the first to create the market or product category, they become readily recognizable to consumers and thus establish a commanding and early market share lead.

People who get Botox treatments consider it to be a private matter, therefore, they do not discuss it with others. This lowers the level of _____, slowing down the diffusion process.

observability. When products are easily observed, their benefits are easily communicated to others, which enhances the diffusion process. Since people may not want to talk about their Botox treatments to reduce wrinkles, the use of this product is less easily observed by others and therefore diffused more slowly.

One of the challenges of using the product life cycle as a tool in marketing is:

the steps are not always sequential, as when the maturity phase immediately follows introduction.

Atari was a pioneer in the electronic game market, which:

Allowed competitors to focus on creating demand for their brand. Paved the way for Nintendo in that product category. Allowed other competing firms to spend less on introductory advertising. Allowed competitors to focus on making improved versions.

At which stage in the product life cycle do sales experience their most rapid increase?

Growth The growth stage of the product life cycle is where the greatest increase in sales is reflected due to a growing number ofproduct adopters, rapid growth in industry sales, and increases in both the number of competitors and the number of available product versions.

According to your text, some estimates indicate that only about _____ percent of new products actually succeed.

3 Although innovation strategies may not always work in the short run—some estimates indicate that only about 3 percent of new products actually succeed—various overriding and long-term reasons compel firms to continue introducing new products and services.

A product that is perceived to be better than most substitutes is said to have _____, which should serve to speed up the diffusion process.

A Relative Advantage. If a product or service is perceived to be better than substitutes, it has a relative advantage, therefore the diffusion will be relatively quick.

When a superior product is offered in a foreign market where cultural differences slow down the diffusion process, it would be attributed to low levels of

Compatibility. When international cultural differences either speed up or slow down the diffusion process, it would involve issues relating to compatibility.

Firms with products in the _____ stage of the product life cycle either position themselves for a niche segment of diehard consumers or those with special needs, or they completely exit the market.

Decline Firms with products in the decline stage of the product life cycle either position themselves for a niche segment of diehard consumers or those with special needs, or they completely exit the market. The few laggards that have not yet tried the product or service enter the market at this stage.

_____ refers to the process by which ideas get transformed into new offerings, including products, services, processes, and branding concepts that will help firms grow.

Innovation Innovation refers to the process by which ideas get transformed into new offerings, including products, services, processes, and branding concepts that will help firms grow.

In some cases, _____ may never adopt a certain product or service, since they rely on traditional products until they are no longer available.

Laggards. Laggards like to avoid change and rely on traditional products until they are no longer available. In some cases, laggards may never adopt a certain product or service.

In the United States, most consumer packaged goods found in grocery and discount stores are already in the _____ stage, which is characterized by the adoption of the product by the late majority and intense competition for market share among firms.

Maturity The maturity stage of the product life cycle is characterized by the adoption of the product by the late majority and intense competition for market share among firms. In the United States, most consumer packaged goods found in grocery and discount stores are already in the maturity stage.

In the Product Development Process, the step that requires tremendous financial resources and extensive coordination of all aspects of the marketing mix is __________

Product Launch. Marketers must coordinate all the elements of the marketing mix and pay particular attention to the timing of the launch.

_____ involves taking apart a product, analyzing it, and creating an improved product that does not infringe on the competitor's patents, if any exist.

Reverse engineering. Reverse engineering involves taking apart a product, analyzing it, and creating an improved product that does not infringe on the competitor's patents, if any exist.

____________________ turns ideas into tangible products.

Technological research While scientific research opens up the world of ideas, technological research transforms ideas into products and services.

_____ represent(s)a substantial portion of the population, and few new products and services can be profitable until this large group buys them.

The early majority The early majority, which represents approximately 34 percent of the population, is crucial because few new products and services can be profitable until this large group buys them.

The introduction of the Apple iPod is an example of _____ because its introduction to the market radically changed consumer preferences and the entire competitive landscape.

an early adopter. The Apple iPod is a pioneer product since it not only changed the way people listened to music, but it also created an entirely new industry devoted to accessories, such ascases, ear buds, docking stations, and speakers.

Tyler is highly knowledgeable about new developments in bicycling technology, since he reads everything he can find about the subject. Typically being the first to try out new bicycle models, he would be classified _____ in terms of the diffusion of innovation curve.

as an innovator. Innovators want to be the first on the block to have the new product or service. Typically, innovators keep themselves very well informed about the product category by subscribing to trade and specialty magazines, talking to other "experts," engaging in product specific blogs and forums, and attending product-related forums, seminars, and special events.

In the new product development process, when companies provide brief written descriptions of the product and what customer needs it would satisfy, sometimes including visual images of what the product would look like it involves

concept testing. Concept testing refers to the process in which a concept statement is presented to potential buyers or users to obtain their reactions. Because concept testing occurs very early in the new product introduction process, even before a real product has been made, it helps the firm avoid the costs of unnecessary product development.

Relative advantage, compatibility, observability and trialability affect ______________

how quickly an innovative product will be accepted by a market.

In the new product development process, companies have a variety of ways for _____ including outsourcing, brainstorming, licensing and customer research.

idea generation To generate ideas for new products, a firm can use its own internal research and development efforts, collaborate with other firms and institutions, license technology from research-intensive firms, brainstorm, research competitors' products and services, and/or conduct consumer research.

Consumers who feel the need to be the first to see a new movie, try a new restaurant, own a piece of new technology or wear the latest fashion accessory are crucial to the success of any new product for they help the product gain market acceptance. They are known as:

innovators Innovators are those buyers who want to be the first on the block to have the new product or service. These buyers enjoy taking risks and are regarded as highly knowledgeable.

Order for the product life cycle

introduction, growth, maturity, decline.

In managing its product portfolio, 3M demands that a specific percentage of its yearly sales come from new products introduced within the previous few years in order to better with stand external shocks and

manage risk through diversification.

The _____ stage of the new product development process can involve the development of a prototype for alpha or beta testing.

product development Product development entails a process of balancing various engineering, manufacturing, marketing, and economic considerations to developa product's form and features or a service's features, often resulting in the development of prototypes.

The _____ stage of the new product development process requires tremendous financial resources and extensive coordination of the marketing mix to roll out the product.

product launch Product launch is the most critical step in the new product introduction requiring tremendous financial resources and extensive coordination of all aspects of the marketing to introduce the product to the entire market.

When Diego and his team took apart the competitor's product, analyzed it and tried to create an improved product that does not infringe on the competitor's patents, they were engaged in the process of ____________

reverse engineering. Reverse engineering is one source of new product ideas. Firms constantly monitor their competitors and taking apart competitors' new products is part of competitive new product development strategy.

When quick service restaurants come up with new offerings, they often market it in a dozen or so of their outlets. When they do this, they are engaged in:

test marketing Test marketing allows large firms to learn more about consumers' response to new products without incurring the cost of a full product launch. Firms must take care, however, that competitors are tipped off to new products before launch.

The last group of buyers to enter a new product market are _____, and when they do, the product has achieved its full market potential.

the late majority. At 34 percent of the market, the late majority is the last group of buyers to enter a new product market. When they do, the product has achieved its full market potential.