BA 370 Chapter 12 Questions

Because a market is saturated, firms may attempt to enter new geographical markets that may be less saturated. For example, pharmaceutical companies are realizing that they need to turn to ________ for continued growth in the coming years.

BRIC countries

Which of the following was considered a new-to-the-world product or service when introduced?

Blu-ray

Although innovation strategies may not work in the long run, overriding short-term reasons compel firms to introduce new products and services.

False

On the diffusion of innovation curve, the late majority is the final group of buyers who like to avoid change and rely on traditional products until they are no longer available.

False

The maturity phase of the product life cycle is characterized by greatly reduced competition.

False

When Pierre asked a few of his regular customers to test his prototype wine press, he was engaging in alpha testing.

False

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

Innovation

Which of the following is a characteristic of products in the maturity stage of the product life cycle?

Marketing costs increase as firms defend their market share.

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

Reverse engineering

Which of the following reflects the maturity stage of the product life cycle?

Sales: peak Profits: peak to declining Typical Consumers: late majority Competitors: high number of competitors and competitive products

Even if products succeed, not all consumers adopt new-to-the-world products at the same time.

True

New product development adds value to a firm's products and services through innovation.

True

The fact that the Apple iPad is easy to try—demo units are available at Apple stores as well as other retail stores—is helping it diffuse more quickly.

True

The failure rate for new products is high.

True

The most challenging part of applying the product life cycle concept is that managers do not know exactly what shape each product's life cycle will take.

True

To determine if a new product is commercially viable, a firm can conduct premarket testing.

True

When consumers see their friends using an innovation, it often persuades them to try it too.

True

Crystal created a virtual prototype of her new line of athletic wear on a website to show to consumers. Crystal will ask consumers what they think of the clothing. Which is the most important question that Crystal should ask?

Will retailers purchase the swimwear if it becomes available?

Freida is using a test model of her firm's new inline skates to see if they work according to the design specifications. She is involved in

alpha testing

Golf ball manufacturers use "Iron Mike," a machine that swings a golf club at a constant velocity, to test the distance for new golf ball designs. When using Iron Mike, the manufacturers are engaged in

alpha testing

Laptop computers, personal digital assistants, and cellular phones were all readily accepted and diffused in U.S. markets where business and personal lifestyles tend to be faster-paced, compared to many other areas in the world. These products offered ________ with consumers' needs and priorities.

compatibility

By adding new product lines beyond its core business of computer software, like the Surface Pro tablet and Xbox 360 game system, Microsoft primarily benefits by

creating diversification and reducing risk.

Companies that develop customized business software often work closely with their users when installing their products. This close contact often creates new product ideas through

customer input

As personal computers became popular, the sale of typewriters decreased significantly and now typewriters are only used by a very small segment of consumers. Typewriters are in the ________ stage of the product life cycle.

decline

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

decline

As it pertains to the diffusion of innovation, if the ________ group is relatively small, the number of people who ultimately adopt the innovation likely will also be small.

early adopter

Zoe recently bought Voice over Internet Protocol (VoIP) phone service. A few of Zoe's friends bought VoIP before she did, but many other friends were interested in Zoe's opinions of the new phone service. Zoe is a(n) ________ in this product category.

early adopter

Successful first movers create a market or a product category. They often benefit from being readily recognizable to consumers and

establishing an early market share lead.

Innovators are a critical group of new product adopters because they

help the product gain market acceptance

During the introduction stage of a product's life cycle, typical consumers are

innovators

The ________ stage of the product life cycle is characterized by negative or low profits.

introduction

Computer game companies constantly monitor computer game-related blogs keeping track of the latest hot products, because they know that their customers crave the "latest and greatest" games. They use this information to create new products that primarily provide the benefit of

keeping up in a market where sales come mostly from new products.

Which of the following groups are included in the diffusion of innovation curve?

late majority

Rinaldo sells commercial-grade tools to building contractors. Whenever he visits his customers, he looks to see if they are using his tools for other tasks or have modified the tools for some other purpose. These customers are ________, who can provide ideas for new and improved products.

lead users

By the time BMW and Mercedes-Benz entered the mini-SUV market, there were many competitors, sales had peaked, and profits were declining. These firms entered the market during the ________ stage of the product life cycle.

maturity

During the ________ stage of the product life cycle, sales peak and profits begin to decline as competition becomes intense.

maturity

Melinda has used Olay beauty products for years, even though there are many competitors on the market. She plans to purchase a recently introduced micro-sculpting cream from Olay's Regenerist line. Olay is in the ________ stage of the product life cycle.

maturity

One of the key characteristics of brainstorming sessions is

no idea is immediately accepted to rejected

In the diffusion of innovation process, innovators enjoy taking risks and are regarded as highly knowledgeable. Marketers want to identify innovators because

other consumers defer to their judgement, creating the opportunity for word-of-mouth referrals

Which of the following are reasons for the high failure rate of new products?

overextending a firm's abilities

Sarita belongs to a national consumer panel created by a market research company. She regularly receives samples of new products from a variety of firms and fills out questionnaires about the products. The national consumer panel Sarita is part of is engaged in

premarket testing

The ________ step in the product development process is critical, requiring tremendous resources and extensive coordination of all aspects of the marketing mix.

product launch

Some products may stay comfortably in the maturity phase of the product life cycle until a new product emerges to replace them. An example of such a mature product is

refrigerators

Early personal computer users remember the cumbersome, user-unfriendly DOS system. When Apple introduced System 1 and Microsoft introduced Windows, both of which were much easier to use, these new products diffused rapidly because of their

relative advantage

Firms can measure the success of a new product by

satisfaction of its technical requirements.

Serena is trying to sell a new line of ultrasound imaging equipment. Unlike existing technology, these machines are compact, creating the potential for general practice physicians to have and use them in their offices. Serena is trying to identify innovators in her market, knowing these customers will most likely

spread positive word-of-mouth to other physicians

A marketing professor in Boston, Massachusetts, maintains a museum of failed consumer products. Most new products in this museum failed during the ________ stage of new product development, when they are introduced to a limited geographic area.

test marketing

Many restaurants roll out new ideas first in Orlando, Florida, a location that attracts a vast range of diverse tourists and thus might offer insights into what various consumer groups will like. This is an example of

test marketing

The diffusion of innovation theory focuses on

the rate at which consumers are likely to adopt a new product or service

As a promotion technique, samples are often used for new products when ________ will influence the diffusion of the product.

triability

Zappos.com, an online shoe store, offers an easy, no-hassle return procedure. This relates to the ________ of its products.

triability

Microsoft's Windows operating system continues to dominate the market, even though it has been around for over 20 years. Windows will likely remain in the maturity stage of the product life cycle

until a superior product comes along to replace it

Bev is assessing the results of a new product launch of a series of e-books for her bookstore. When evaluating the results, Bev is least likely to consider

why it took so long to consider the new product line