Mkt Ch 12 – Flashcard
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__________ is the process by which ideas are transformed into new products and services that will help firms grow.
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innovation
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Eric is a sales rep for an established building materials manufacturer. Business is good, but he is concerned that the company has spent little on new product development and has not created a new product in over five years. Without new products, Eric can market his current products only to his current customers or
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market the same products to similar customers
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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
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satisfying the changing needs of current and new customers
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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
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creating diversification and reducing risk
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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
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keeping up in a market where sales come mostly from new products
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Which of the following is not one of the benefits to a firm of new product development?
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reducing the costs of production
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Pioneer or breakthrough products
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can change consumer preferences
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Which of the following was not a new-to-the-world product or service when it was introduced?
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the Mercedes mini SUV, smaller version of larger SUV's
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One of the potential benefits to a firm of introducing new-to-the-world products or services is
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establishment of a completely new market
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Successful first movers create a market or a product category. They often benefit from being readily recognizable to consumers and
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establishing an early market share lead
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In many cases, pioneers lose their market lead and initial market share to imitators who
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capitalize on the pioneers weaknesses
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Which of the following is not a reason listed in your text for the high failure rate of new products?
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failing to introduce lower priced alternatives
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Even if they succeed, new-to-the-world products are
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not adopted by everyone at the same time
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The process by which the use of a new product or service spreads throughout a market group is referred to as
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diffusion of innovation
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The diffusion of innovation theory focuses on
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the rate at which consumers are likely to adopt a new product or service
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Which of the following is not one of the five groups in the diffusion of innovation curve?
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non-adopters
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Innovators are a critical group of new product adopters because they
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help extend the product gain market acceptance
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Whenever Donald considers upgrading his personal computer system, he consults with Jeremy, a knowledgeable friend who always has the newest technology. For Donald, Jeremy is a(n) __________ in the diffusion of innovation curve.
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innovator
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In the diffusion of innovation process, innovators enjoy taking risks and are regarded as highly knowledgeable. Marketers want to identify innovators because
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other consumers defer to their judgement, creating the opportunity for word of mouth referrals
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Brian 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. Brian is trying to identify innovators in his market, knowing these customers will most likely
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spread positive word of mouth to other physicians
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For new product marketers, early adopters are important because they tend to be
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opinion leaders
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Robin recently bought Voice over Internet Protocol (VoIP) phone service. A few of Robin's friends bought VoIP before she did, but many other friends were interested in Robin's opinions of the new phone service. Robin is a(n) __________ in this product category.
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early adopter
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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.
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early adopter
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The __________ diffusion of innovation group is crucial because few new products can be profitable until this large group buys them.
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early majority
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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.
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early majority
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When microwaves were new, they often cost over $300, were huge, and had numerous settings and options. Brenda and Bart waited, concerned about potential health hazards and wishing for more choices in the market. By the time they purchased a microwave, sales of microwaves had leveled off and prices had declined significantly. Brenda and Bart were part of the ___________ diffusion of innovation group.
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late majority
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The __________ diffusion of innovation group is the last large group of consumers to adopt a new product or service.
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late majority
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By the time BMW got into the mini-SUV market, sales had leveled off and were even starting to decline. BMW had to target its marketing efforts toward the __________ diffusion of innovation group.
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late majority
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Bob and George live in the United States. Bob recently asked for George's cell phone number, but George said he didn't own a cell phone. George would probably be considered a(n) __________ in the diffusion of innovation process.
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laggard
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When John began helping his favorite uncle Burton with his finances, he discovered his uncle was still renting a rotary-dial telephone from the phone company. Uncle Burton had paid thousands of dollars in rental fees over the previous 40 years. Uncle Burton is a(n) __________ in the diffusion of innovation process for telephones.
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laggard
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The diffusion of innovation theory is useful to marketers in helping them
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predict which type of customers will buy their products immediately and later
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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
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relative advantage
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Inkjet printers were a big improvement over the dot-matrix printers they replaced. Inkjet printers gained rapid acceptance in the marketplace primarily because of their
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relative advantage
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When automobile manufacturers introduced SUVs, they distributed and promoted them in the United States, but not in Europe where gasoline is heavily taxed and roads are much smaller. Car manufacturers recognized that this new line of cars
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were not compatible with European market conditions
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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.
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compatibility
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Many home design businesses volunteer to provide their latest products for tours-of-homes fundraisers because they know their new products will benefit from
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observability
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As a promotion technique, samples are often used for new products when __________ will influence the diffusion of the product.
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trialability
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Zappos.com, an online shoe store, offers an easy, no-hassle return procedure. This relates to the _______ of its products.
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trialability
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Which of the following is least likely to be a source of ideas for new products?
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geodemographic segmentation
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In the product development process, what takes place between concept testing and market testing?
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performing product development
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A major limitation in the use of internal R&D departments for new idea generation is
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the costs associated with an internal r&D department tend to be quite high
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When a global firm turns to its subsidiaries in less developed markets for new product ideas, such as when Coca-Cola developed Minute Maid Pulpy out of its Shanghai research center and then moved the product into other markets around the world, the firm is engaged in
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reverse innovation
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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.
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brainstorming
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One of the key characteristics of brainstorming sessions is
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no idea is immediately accepted or rejected
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At the end of a brainstorming session, participants are often asked to
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vote on the best ideas
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__________ involves taking apart a product, analyzing it, and creating an improved product that does not infringe on the competitor's patents.
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reverse engineering
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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
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customer input
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Ron 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.
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lead users
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__________ are customers who modify existing products according to their own ideas to suit their specific needs.
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lead users
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Concept testing is important because it can
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help a firm avoid the costs of unnecessary product development.
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When conducting exploratory concept testing for her firm's new Internet antipiracy software, which is the most important question that Dee should ask?
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Will respondents purchase the software if it becomes available?
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Kristina created a virtual prototype of her new line of swimwear on a website to show to consumers. Kristina will ask consumers what they think of the clothing. Which is the most important question that Kristina should ask?
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Will retailers purchase the swimwear if it becomes available?
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If a new product concept gets positive evaluations from potential customers during concept testing, the next step for a firm is
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product development
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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.
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prototypes
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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
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alpha testing
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Barbara is using a test model of her firm's new inline skates to see if they work according to the design specifications. Barbara is involved in
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alpha testing
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When testing new products, most firms consider the question of whether testing products on animals
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should be done when the new product does not contribute to the health and well-being of human users.
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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
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alpha testing
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One reason auto companies spend millions on racing cars is that they offer the opportunity to test new designs and technology under extreme conditions. Using the cars in a real-use setting provides an opportunity for _______ the product.
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beta testing A beta test is a test of the product conducted by key customers. Participation in NASCAR and other racing organizations offers auto companies a chance to do this.
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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
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premarket testing
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A marketing professor in Ithaca, New York, 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.
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test marketing
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The __________ step in the product development process is critical, requiring tremendous resources and extensive coordination of all aspects of the marketing mix.
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product launch
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When McDonald's comes up with a new drink or sandwich for its restaurants, it often markets it in a dozen or so of its outlets. When the company does this, it is engaged in
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test marketing
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__________ are special incentives offering reduced prices for a limited time, offered to retailers to get them to try a new product.
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introductory price promotions
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Which of the following would not be part of the launch of a new product?
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starting to make preliminary decisions about the target market
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A(n) __________ is a fee paid by manufacturers to get new products into stores or to gain more or better shelf space for products.
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slotting allowance
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Now that the consumer demand is building for Miranda's new organic shampoo, she and her team face a new set of decisions. Which of the following is not one of the decision items on the agenda for the team discussion of place in the marketing mix for a new product launch?
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Should slotting allowances be given to get the product into stores?
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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
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why it took her s long to consider the new product line
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Which of the following is not one of the four product life cycle stages?
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stagnation
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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
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until a superior product comes along to replace it.
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During the __________ stage of the product life cycle, sales are low and profits are small or negative.
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introduction
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When Dr. Putt invented his Eye-Over-the-Ball (EOB) golf putting device, he knew during the introductory stage
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sales would be low and profits nonexistent, but he would attract golf equipment innovators.
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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.
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growth
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During the __________ stage of the product life cycle, sales rise, profits rise rapidly, and there are a small but increasing number of competitors.
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growth
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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
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refrigerators
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The growth phase of the product life cycle is always dynamic. Which of the following does not occur in this phase?
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price competition with protracted price wars erodes profits
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Which of the following is not a characteristic of products in the maturity stage of the product life cycle?
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Laggards are a major focus of marketing efforts.
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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.
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maturity
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During the __________ stage of the product life cycle, sales peak and profits begin to decline as competition becomes intense.
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maturity
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During the ___________ stage of the product life cycle, firms either position themselves for a niche market of loyal consumers or they exit the market.
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decline
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The CEO of David's firm just came back from a business seminar. He called David into his office and stated, "I just found out about the product life cycle curve in a strategy seminar. This is a great tool. I want you to drop whatever you're doing and inventory all of our products to determine exactly where they are in the product life cycle." David needs to think fast for a good answer because he knows that
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it is often impossible to identify with precision where a product is in the product life cycle.
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Which of the following is the correct sequence of new product adopters in the diffusion of innovation curve?
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innovators, early adopters, early majority, late majority, laggards
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Which of the following adopter categories refers to the last large group of buyers to enter a new product market?
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late majority
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During the __________ stage of the product life cycle, there are few but an increasing number of competitors.
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growth
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If a few of Nintendo's customers are asked to try out a new video game that has not yet been released on the market, this is an example of
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beta testing
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When a manufacturer launches a new product, it may offer __________ to wholesalers and retailers, including introductory price promotions, special events, and personal selling.
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trade promotions
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The __________ is a specific price at which manufacturers encourage retailers to sell a product.
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manufacturers suggested retail price
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The Eiger Labs MPMan was the first mass-produced MP3 player sold in the United States. Eiger Labs was a(n) __________ in the MP3 player market.
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pioneer
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In one test before product launch, customers try a sample product and are then surveyed to understand whether or not they would buy/use the product again. This is known as
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premarket testing
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Which of the following is not a stage in the product life cycle?
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evaluation
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What type of event exposes retailers to large numbers of new products in a concentrated location?
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trade shows
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The product life cycle is theoretically __________ with regard to sales and profits.
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bell shaped
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In the United States, most consumer packaged goods found in grocery and discount stores are in the __________ stage of the product life cycle.
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maturity
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During the introduction stage of a product's life cycle, typical consumers are
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innovators
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How is consumer panel data collected during the test marketing phase of a new product introduction?
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panelists scan their receipts on a home scanning device
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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.
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decline
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All of the following are ways that manufacturers use promotion to generate demand for new products with consumers except
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coordination of delivery and storage
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Cathy 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.
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maturity
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When a product is successful in the introductory stage of the product life cycle,
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it may start to see profits toward the end of this stage
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Firms can measure the success of a new product by all of the following factors except
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fewer competitors in the market
