Week 6 #2

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. Production 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%

Which of the following processes could be considered an acceptable method for generating ideas? (Choose every correct answer.) Conducting consumer research Brainstorming within the firm Arguing with other firms and institutions Communicating with a firm's R&D department Researching competitors' products and services

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

Without innovation, what options would be available to firms? (Choose every correct answer.) Develop new products for current markets Develop new products for new markets Continue to market current products to current customers Take current products to new markets

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

After a new product is launched, what is the next step of the product development process? Evaluation of results Concept testing Developing the advertising campaign Pricing the product

Evaluation of results

Product development entails a variety of processes and considerations to determine which aspects of a product or service? Form and features Sales potential Marketing strategy Customers and distributors

Form and features

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

Innovators

Firms can highlight a product's relative advantage, which refers to which perception among consumers about the product? It is less expensive than competitors. It is new and innovative. It is the most popular item on the market. It is better than its substitutes.

It is better than its substitutes.

Firms can highlight a product's relative advantage, which refers to which perception among consumers about the product? It is the most popular item on the market. It is better than its substitutes. It is less expensive than competitors. It is new and innovative.

It is better than its substitutes.

What will happen to a firm if it continues to produce the same products in a saturated market? Its revenues will stay the same. It will eventually decline. Its revenues will grow slowly. It will experience rapid growth.

It will eventually decline.

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

Laggards

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.) Gardening equipment Movies Books Video games Over-the-counter medicines

Movies Books Video games

_____________ is the new-product development phase where Hope Springs decides that the flavor additive has enough market interest and the company will launch full-scale production and sales.

Product launch

What are the key characteristics of the growth stage of the product life cycle? (Choose every correct answer.) Sales rise Typical consumers are innovators Competitors increase Sales stabilize

Sales rise Competitors increase

______ 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 attract talented employees to the firm To lower production costs To satisfy the changing needs of consumers

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

What might a concept include along with a brief written description of the product? (Choose every correct answer.) Visual images Ideas generated The final product Customer needs it satisfies

Visual images Customer needs it satisfies

Early ___ are the category of consumers who begin to use a product or service immediately following innovators.

adopters

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 ____ within the diffusion process.

advantage

Firms need to continue to innovate because customer needs ______.

are constantly changing

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

concept

If Xiu Li organized focus groups to discuss the idea of flavored additives with Hope Springs customers, this would be an example of

concept testing

Sara Lee builds its brand on

consumer needs.

____ 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

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

Sara Lee determined the new product was a success at which stage of the development process?

evaluation of results

True or False: New products must be targeted toward end consumers.

false

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

idea

Sara Lee's use of the focus group to help develop the package is an example of

idea generation

When Hope Springs Water Co. was looking to complete the _________ phase of the new product development process, the company could have leveraged internal research, requested customer input, conducted a competitive analysis or sought collaboration with another organization.

idea generation

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 ______. increase market share identify new target markets improve business relationships eliminate competition

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

The __ 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.

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

The early ___ represents the earlier half of the two largest categories of consumers on the diffusion of innovation curve. Listen to the complete question

majority

Sending the product out to test families is a form of

market testing.

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

maturity

Sara Lee also used concept testing and customer input to develop its

packaging design.

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

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 Hope Springs develops its flavored water additive, it uses the college town where Gabby and Justin are students to gauge if there is ample product interest. Hope Springs uses all the elements of the marketing mix in this effort. The company is engaged in a(n)

test market.

When Subway introduced a new Southwestern Club sandwich in South Florida before launching it nationwide, it was engaging in ______. beta testing test marketing alpha testing concept testing

test marketing

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

When a product is first launched during the introduction stage, sales are usually ______ and there are ______ competitors.

very low; essentially no

Adding new products is MOST likely to prompt consumers to purchase in which of the following industries? Writing utensils Video games Household appliances Oil and gas

video games

What is one reason Sara Lee developed a new white bread with whole grains?

The company saw consumer needs changing.

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

Manufacturing Marketing Engineering

The "sensory panel" is an example of

premarket testing.

Which of the following is a market testing method that offers a strong predictor of product success based on actual purchasing behavior? Simulated shopping Brainstorming Focus grouping Test marketing

Test marketing

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

product

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 The size of the producing firm's R&D budget The average age of the target market How different the product is from other offerings in the market

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

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