BUS 346 midterm review questions (ch12)

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. Select one: a. compatibility b. complexity c. observability d. relative positioning e. trialability

a. compatibility

As soon as she saw one, Hillary wanted a flat-screen television, but she was worried about making the wrong choice. She waited until there were alternatives in the market with lower prices and improved quality. Hillary is part of the __________ diffusion of innovation group. Select one: a. early majority b. early adopter c. laggard d. innovator e. late majority

a. early majority

During the __________ stage of the product life cycle, sales rise, profits rise rapidly, and there are a small but increasing number of competitors. Select one: a. growth b. decline c. maturity d. leveling e. introduction

a. growth

The diffusion of innovation theory is useful to marketers in helping them Select one: a. predict which types of customers will buy their product immediately and later. b. forecast sales for a new product. c. adjust to the performance life cycle. d. avoid the cost of concept testing. e. predict how long it will take for a new product to gain market acceptance.

a. predict which types of customers will buy their product immediately and later.

By adding new product lines beyond its core business of computer software, like the Zune MP3 player and Xbox 360 game system, Microsoft primarily benefits by Select one: a. spreading out production costs. b. creating diversification and reducing risk. c. avoiding market saturation from products that have just been introduced to the market. d. satisfying the changing needs of the technological research staff. e. keeping up in a market where sales come mostly from new products.

b. creating diversification and reducing risk.

f the __________ diffusion of innovation group is relatively small, the number of people who ultimately adopt the innovation likely will also be small. Select one: a. late majority b. early adopter c. laggard d. innovator e. early majority

b. early adopter

Concept testing is important because it can Select one: a. reduce the potential loss of sales during the decline stage. b. help a firm avoid the costs of unnecessary product development. c. lead to immediate rollout of the final product. d. increase product development costs. e. help the firm to refine the promotional plans.

b. help a firm avoid the costs of unnecessary product development.

One of the key characteristics of brainstorming sessions is Select one: a. the manager should always make the final decision. b. no idea is immediately accepted or rejected. c. the first idea is almost always the best idea. d. only the marketing team is included in these sessions. e. everyone must come up with ideas.

b. no idea is immediately accepted or rejected.

__________ are special incentives offering reduced prices for a limited time, offered to retailers to get them to try a new product. Select one: a. Push prices b. Loss leaders c. Introductory price promotions d. Distribution rebates e. Market skimming incentives

c. Introductory price promotions

How is consumer panel data collected during the test marketing phase of a new product introduction? Select one: a. Stores provide sales data to companies. b. Panelists complete a questionnaire about the product. c. Panelists scan their receipts on a home scanning device. d. Consumers voluntarily go to a website to record their preferences. e. Focus groups are held in key markets.

c. Panelists scan their receipts on a home scanning device.

Paul listens to music on his iPod and iPhone, but he still buys vinyl records at his local music store on occasion, although they are getting harder to find. Vinyl records are in the __________ stage of the product life cycle. Select one: a. evaluation b. growth c. decline d. introduction e. maturity

c. decline

Innovators are a critical group of new product adopters because they Select one: a. act as reverse engineering consultants. b. extend the product life cycle. c. help the product gain market acceptance. d. are the major source of innovation. e. help with test marketing.

c. help the product gain market acceptance.

Which of the following is the correct sequence of new product adopters in the diffusion of innovation curve? Select one: a. early adopters, early majority, innovators, late majority, laggards b. innovators, late majority, early adopters, early majority, laggards c. innovators, early adopters, early majority, late majority, laggards d. early majority, late majority, early adopters, innovators, laggards e. innovators, early majority, early adopters, innovators, late majority, laggards

c. innovators, early adopters, early majority, late majority, laggards

Lorraine 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 Lorraine is part of is engaged in Select one: a. product development. b. product launch. c. premarket testing. d. test marketing. e. concept testing.

c. premarket testing.

Many restaurants offer daily specials, appetizers, entrees, and desserts not listed on their standard menu. These daily specials primarily provide the new product benefit of Select one: a. creating diversification and reducing risk. b. avoiding market saturation from products that have been on the market for a long time. c. satisfying the changing needs of current and new customers. d. keeping up in a market where sales come mostly from new products. e. reduction in cost of ingredients.

c. satisfying the changing needs of current and new customers.

The diffusion of innovation theory focuses on Select one: a. the geographic boundaries of innovation. b. the way a product moves through the product life cycle. c. the rate at which consumers are likely to adopt a new product or service. d. the relationship between pioneer brands and imitators. e. the psychological traits of innovators.

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

Beverly is assessing the results of a new product launch of a series of e-books for her bookstore. When evaluating the results, Beverly will likely consider all of the following EXCEPT Select one: a. whether her customers are interested in the new books. b. whether the e-books are generating the expected level of profit. c. why it took her so long to consider the new product line. d. whether the e-books are generating the expected level of sales. e. whether the e-books function as expected.

c. why it took her so long to consider the new product line.

Before Segway manufactured its two-wheeled people movers, it built a prototype and had staff engineers test it for performance and stability. At this stage, Segway was involved in Select one: a. test marketing. b. beta testing. c. concept testing. d. alpha testing. e. product launch.

d. alpha testing.

Ron sells commercial-grade tools to building contractors. Whenever he visits his customers, he looks to see whether 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. Select one: a. concept testers b. early adopters c. market testers d. lead users e. reverse engineers

d. lead users

Which of the following is NOT one of the five groups in the diffusion of innovation curve? Select one: a. Late majority. b. Early adopters. c. Early majority. d. Innovators. e. Non-adopters.

e. Non-adopters.

The pharmaceutical industry often justifies the high prices for new drugs by arguing that it researches as many as one hundred new compounds before it comes up with one __________, an extremely successful product that pays for the costs associated with the other attempts to develop new products. Select one: a. premium product b. first mover c. standout d. pioneer e. blockbuster

e. blockbuster

Suppose that you work for an advertising agency and are brought into a meeting where everyone is asked to generate ideas for names for a new beach resort. You are engaged in __________, a form of new idea generation. Select one: a. consumer research b. R&D c. licensing technology d. geodemographic analysis e. brainstorming

e. brainstorming

When Toyota introduced hybrid cars, there were waiting lists to buy them. Then Honda and a few other manufacturers entered the market, shifting the product life cycle for hybrid cars into the __________ stage of the product life cycle. Select one: a. maturity b. decline c. introduction d. leveling e. growth

e. growth

The __________ diffusion of innovation group is the last large group of consumers to adopt a new product or service. Select one: a. early majority b. innovator c. laggard d. early adopter e. late majority

e. late majority

In one test before product launch, customers try a sample product and are then surveyed to understand whether they would buy/use the product again. This is known as Select one: a. pre-launch testing. b. market testing. c. alpha testing. d. concept testing. e. premarket testing.

e. premarket testing.

Between concept testing and market testing, a firm should engage in which stage of the product development process? Select one: a. brainstorming b. marketing research c. determining potential ROI d. securing financial backing e. product development

e. product development

If a new product concept gets positive evaluations from potential customers during concept testing, the next step for a firm is Select one: a. reverse engineering. b. brainstorming. c. market testing. d. launching the product. e. product development.

e. product development.

Before the development of computer-assisted design software, many firms handcrafted __________, wooden or clay models that served as rough physical representations of a new product. Select one: a. blockbusters b. premarket tests c. designer models d. storyboards e. prototypes

e. prototypes

Early personal computers cost several thousand dollars, allowing competitors Select one: a. to focus on creating demand for their brand. b. to focus on making improved versions. c. to promote alternative brands in that product category. d. to spend less on introductory advertising. e. to introduce lower-priced alternatives.

e. to introduce lower-priced alternatives.