MK Chap 12

When a company adds new products this helps the company to ______ its risk.

diversify

early adopters percentage

13.5%

innovation

An improvement of an existing technological product, system, or method of doing something.

innovator traits

rend starters Risk takers Highly knowledgeable (about the product/service)

Innovators generally keep themselves knowledgeable about the product category through:

subscribing to trade magazines attending product-related seminars frequenting product-specific blogs

Early adopters, although not as fast as innovators, are quick to purchase a new product or service. Identify all of the following characteristics that are typically associated with early adopters.

tend to be opinion leaders of particular product categories are less risk seeking than innovators

laggard percentage

16%

innovator percentage

2.5%

What percentage of new products is estimated to succeed?

3%

Early Majority percentage

34%

The diffusion of innovation curve shows the time of adoption for different categories of consumers. According to the curve, how many different categories of consumers are there?

5

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

6

What are some advantages experienced by pioneer firms over later entrants?

Establish an early market share lead More likely to command a greater market share over a longer period More readily recognizable to consumers

Without innovation, what options would be available to firms?

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

What can marketers learn from the diffusion of innovation theory?

The rate at which consumers are likely to adopt a new product or service Which markets are likely to be most receptive to new products or services

The diffusion of innovation curve refers to the rate in which consumers ______ a given product or service.

adopt

Firms need to continue to innovate because customer needs ______.

are constantly changing

Laggards

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

a firm's research and development

department consists of scientists who work to solve complex problems and develops new ideas.

Licensing is a trade-off in that it can save a firm from the high costs of in-house R&D, but instead the firm is counting on a solution (product) that already exists but has not been ______.

marketed

pioneers

or breakthrough products are brand new products that establish a completely new market or radically change both the rules of competition and consumer preferences in a market.

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

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

The diffusion of innovation curve illustrates the typical rate of adoption for a product or service among consumers. According to the curve shown, when would marketers expect to see highest frequency of purchases for a given product or service?

in the middle of the curve

true pioneer products

are products that have never been seen before and literally create new markets

Concept testing can be as simple as a brief written description of the product that might also include _______.

visual images customer needs it satisfies

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

While new products can become huge success stories, they have a high failure rate. In many cases imitators capitalize on the _______ of pioneers and subsequently gain advantage in the market.

weakness

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

Apple created an entirely new brand that started with the iPod and evolved into different product categories (e.g., iPhone, iPad) before anyone else could catch on. Thus, Apple was the ______, which made the firm easily recognizable to consumers, helping it to gain an early market share lead.

first mover

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

it will eventually decline

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?

video games books movies

Which of the following processes could be considered an acceptable method for generating ideas?

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

Which consumers enjoy taking risks and like to be the first to purchase a new product or service?

innovators

licensing

is an agreement through which one firm buys the rights to use the technology or ideas of another research-intensive firm.

What objective(s) do firms have in adding new products, services, and processes to their offerings?

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

In order for a firm to successfully make a new product out of a competitor's product, that firm must engage in ______ to figure out how to bring an improved version to the market.

reverse engineering

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

risk diversification