Deck 12: Developing New Products

Question 1

The diffusion of innovation refers to the life cycle of a product from introduction to maturation.

Answer 1

False

Question 2

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

Answer 2

True

Question 3

When consumers see their friends using an innovation, it often persuades them to try it too. This demonstrates the concept of trialability.

Answer 3

False

Question 4

The failure rate for new products is high.

Question 5

One of the key characteristics of brainstorming sessions is that bad ideas should be immediately rejected so the group can focus its attention on good ideas.

Question 6

When the new iPhone came out, Mallory spent the night in front of the store so she could get one before any of her friends. According to the diffusion of innovation, Mallory is an innovator.

Question 7

The diffusion of innovation curve follows this sequence: innovators, early majority, late majority, early adopters, and laggards.

Question 8

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

Question 9

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

Question 10

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

Question 11

Test marketing refers to customers who modify existing products according to their own ideas to suit their specific needs.

Question 12

New-to-the-world products can establish completely new markets or radically change the rules of competition as well as consumer preferences in a market.

Question 13

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.

Question 14

On the diffusion of innovation curve, the first group of buyers who want to be the first on the block to have the new product are known as early adopters.

Question 15

Fashion trends tend to experience short product life cycles.

Question 16

Innovation refers to the response companies take when a competitor introduces a new product.

Question 17

When Connor asked a few of his regular customers to test his prototype electric bike, he was engaging in alpha testing.

Question 18

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 maturity stage of the product life cycle.

Question 19

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.

Question 20

All products tend to follow the same life cycle curve.

Question 21

In many cases, pioneers lose their market lead and initial market share to imitators who

A)capitalize on the pioneers' weaknesses.
B)create similar products with reduced value to consumers.
C)utilize alpha-beta testing.
D)ignore patents and copyrights.
E)target late maturity consumers.

Question 22

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

A)keeping up in a market where sales come mostly from new products.
B)satisfying the changing needs of former customers.
C)avoiding market penetration from products that have been on the market for a long time.
D)creating diversification and reducing risk.
E)taking advantage of a long product cycle.

Question 23

Ellen recently switched from cable to YouTube TV. A few of her friends switched before she did, but many other friends were interested in Ellen's opinion of the television service. Ellen is a(n)________ in this product category.

A)innovator
B)laggard
C)late majority adopter
D)early majority adopter
E)early adopter

Question 24

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

A)keeping up in a market where sales come mostly from new products.
B)satisfying the changing needs of the technological research staff.
C)avoiding market saturation from products that have just been introduced to the market.
D)creating diversification and reducing risk.
E)spreading out production costs.

Question 25

Whenever Stephen considers upgrading his computer gaming system, he consults with Pete, a knowledgeable friend who always has the newest technology. For Stephen, Pete is a(n)________ in the diffusion of innovation curve.

A)innovator
B)laggard
C)late majority adopter
D)early majority adopter
E)early adopters

Question 26

The process by which the use of a new product or service spreads throughout a market group is referred to as

A)new product introduction.
B)lead user dispersion.
C)diffusion of innovation.
D)the product life cycle.
E)product development diffusion.

Question 27

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

A)keeping up in a market where sales come mostly from new products.
B)satisfying the changing needs of current and new customers.
C)avoiding market saturation from products that have been on the market for a long time.
D)creating diversification and reducing risk.
E)reduction in cost of ingredients.

Question 28

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

A)spread positive word of mouth to other physicians.
B)buy one for each office in their practices.
C)reposition his products.
D)create demand among the late majority.
E)not need any service or support when using the product.

Question 29

One of the potential benefits to a firm of introducing new-to-the-world products or services is

A)cost savings.
B)late majority marketing.
C)establishment of a completely new market.
D)the ability to avoid paying pioneers for new product development.
E)the ability to capitalize on existing consumer preferences.

Question 30

For new product marketers, early adopters are important because they tend to be

A)few in number.
B)the first to adopt a new product.
C)opinion leaders.
D)fond of prototypes.
E)alpha testing enthusiasts.

Question 31

Kelsey has been asked to report on how the company's high-rise jeans collection had spread through the marketplace. The management team wants to know which categories of adopters it originally applied to and which ones it applies to today. What process does Kelsey need to review?

A)supply and demand
B)diffusion of innovation
C)beta testing
D)economies of scale
E)brainstorming

Question 32

Maria was one of the first people in the virtual waiting room for tickets to see the Broadway production of Hamilton. She had taken the morning off of work to be sure she would get tickets. Maria is an example of a(n)

A)early majority.
B)late adopter.
C)laggard.
D)early adopter.
E)innovator.

Question 33

The diffusion of innovation theory focuses on

A)the geographic boundaries of innovation.
B)the relationship between pioneer brands and imitators.
C)the psychological traits of innovators.
D)the rate at which consumers are likely to adopt a new product or service.
E)the way a product moves through the product life cycle.

Question 34

Even if they succeed, new-to-the-world products are

A)generally not profitable.
B)not adopted by everyone at the same time.
C)not capable of creating new markets.
D)not subject to the law of first movers.
E)typically very short-lived.

Question 35

The Amazon Echo is an example of ________ because when it was introduced, nothing like it existed on the market.

A)trialability
B)innovation
C)beta-testing
D)saturation
E)a laggard

Question 36

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

A)they prefer products from established market leaders.
B)other consumers defer to their judgment, creating the opportunity for word-of-mouth referrals.
C)they are especially price conscious.
D)they are easily influenced by reminder advertising.
E)they encourage competitors to enter the market.

Question 37

A major struggle faced by first movers is that they

A)must modify a competitor's product without reproducing it.
B)use prototypes to dominate the market.
C)do not have access to test marketing.
D)have the job of establishing the market alone.
E)rely on laggards to buy their products.

Question 38

Innovators are a critical group of new product adopters because they

A)continue to buy the product after a new product is introduced.
B)act as reverse engineering consultants.
C)help with test marketing.
D)help the product gain market acceptance.
E)extend the product life cycle.

Question 39

Pioneer or breakthrough products are those that

A)will likely result in late maturity buying.
B)can change consumer preferences.
C)incorporate reverse engineering outputs.
D)require the use of concept testing services.
E)must be geographically centered.

Question 40

Which group is especially essential for bringing the other buying groups into the market?

A)matures
B)laggards
C)late majority
D)early majority
E)early adopters

Question 41

Which group of consumers tries to avoid change and rely on a product until they can't find it in the market and are forced to go without or change to something else?

A)laggards
B)early majority
C)late majority
D)early adopters
E)innovators

Question 42

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

A)relative advantage
B)compatibility
C)observability
D)complexity
E)trialability

Question 43

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

A)provided equivalent relative advantage for both European and U.S. customers.
B)were not compatible with European market conditions.
C)did not provide benefits that were observable.
D)involved technology that was too complex.
E)could not be easily tried by consumers.

Question 44

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.

A)relative positioning
B)compatibility
C)observability
D)complexity
E)trialability

Question 45

Kyle and Stan live in the United States. Kyle recently asked for Stan's cell phone number, but Stan said he didn't own a cell phone. Stan would probably be considered a(n)________ in the diffusion of innovation process.

A)innovator
B)laggard
C)late majority adopter
D)early majority adopter
E)early adopter

Question 46

The Apple iPod changed the way people listen to music but it also created an entirely new industry devoted to accessories such as cases, ear buds, docking stations, and speakers. The Apple iPod is considered a

A)pioneer product.
B)introductory product.
C)mature product.
D)diffused product.
E)early adopted product.

Question 47

As soon as she saw one, Corinne wanted a curved-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. Corinne is part of the ________ diffusion of innovation group.

A)innovator
B)laggard
C)late majority
D)early majority
E)early adopter

Question 48

The shape of the diffusion of innovation curve is described as

A)bell-shaped.
B)positive.
C)negative.
D)a straight line.
E)convex.

Question 49

The ________ diffusion of innovation group is crucial because few new products can be profitable until this large group buys them.

A)innovator
B)laggard
C)late majority
D)early majority
E)early adopter

Question 50

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.

A)blockbuster
B)early adopter
C)pioneer
D)market tester
E)concept tester

Question 51

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

A)relative advantage.
B)compatibility.
C)observability.
D)associated services.
E)trialability.

Question 52

By the time BMW got into the mini-SUV market, sales of SUVs had leveled off and were even starting to decline. BMW had to target its marketing efforts toward the ________ adopters.

A)innovator
B)laggard
C)late majority
D)early majority
E)early adopter

Question 53

Many interior design businesses volunteer to provide their services for house-walk fundraisers because they know their design efforts will benefit from

A)relative advantage.
B)compatibility.
C)observability.
D)complexity.
E)trialability.

Question 54

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

A)relative advantage.
B)compatibility.
C)observability.
D)complexity.
E)trialability.

Question 55

The diffusion of innovation theory is useful to marketers in helping them

A)adjust to the performance life cycle.
B)avoid the cost of concept testing.
C)predict which types of customers will buy their product immediately and later.
D)predict how long it will take for a new product to gain market acceptance.
E)determine a target market.

Question 56

When Ken began helping his Aunt Rita with her finances, he discovered his aunt was still renting a rotary-dial telephone from the phone company. Aunt Rita had paid thousands of dollars in rental fees over the past 40 years. Aunt Rita is a(n)________ in the diffusion of innovation process for telephones.

A)innovator
B)laggard
C)late majority
D)early majority
E)early adopter

Question 57

When microwaves were new, they typically cost over $300, were bulky and required extensive counter space, and had limited styles. Michelle and Will waited, wishing for more choices in the market. By the time they purchased a microwave, sales had leveled off and prices had declined significantly. Michelle and Will were part of the ________ diffusion of innovation group.

A)innovator
B)laggard
C)late majority
D)early majority
E)early adopter

Question 58

Warby Parker, an online retailer for prescription eyewear, offers a free, try-on at home program for its customers. Customers browse frames on Warby Parker's website and select five pairs they would like to try on. They can then choose to purchase or return the frames. Warby Parker handles all the shipping costs and provides all the return packaging. This relates to the ________ of its products.

A)relative advantage
B)compatibility
C)observability
D)complexity
E)trialability

Question 59

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

A)premarket testing.
B)market testing.
C)alpha testing.
D)concept testing.
E)prelaunch testing.

Question 60

Which adopter category refers to the last large group of buyers to enter a new product market?

A)late majority
B)early majority
C)laggards
D)early adopters
E)innovators

Question 61

If a few of Quality Water Systems Inc. customers are asked to try out a new water filter that has not yet been released on the market, this is an example of

A)beta testing.
B)market testing.
C)premarket tests.
D)test marketing.
E)concept testing.

Question 62

Jacob sells commercial-grade kitchen equipment to major hotel chains and restaurants. Whenever he visits his customers, he looks to see if they are using the equipment for other tasks or have modified the equipment for some other purpose. These customers are examples of ________, who can provide ideas for new and improved products.

A)laggards
B)market testers
C)lead users
D)reverse engineers
E)concept testers

Question 63

Lilly created a virtual prototype of her new line of fashion boots on a website to show to consumers. Lilly realizes there are multiple lines of fashion boots on the market and hers will need to be unique. For Lilly, what important question should she be asking at this point?

A)What retailers should be used to sell the fashion boots?
B)Will this fashion boot line satisfy an unmet need?
C)What wholesale price should be charged?
D)What promotional plan will work best?
E)In which season should we introduce the product?

Question 64

Sasha is using a test model of her firm's new glow-in-the-dark nail polish to see if it works according to the design specifications. Sasha is involved in

A)test marketing.
B)product launch.
C)alpha testing.
D)target marketing.
E)concept testing.

Question 65

If a new product concept gets positive evaluations from potential customers during concept testing, the next step for a firm is

A)market testing.
B)product design.
C)brainstorming.
D)reverse engineering.
E)launching of the product.

Question 66

In the product development process, what takes place between concept testing and market testing?

A)securing financial backing
B)conducting marketing research
C)brainstorming
D)determining potential ROI
E)product design

Question 67

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

A)a consortia.
B)reverse innovation.
C)competitive engineering.
D)pioneering.
E)beta testing.

Question 68

When conducting exploratory concept testing for her firm's new Internet antipiracy software, what is the most important question that Cassie should ask?

A)How long will it take to bring the software to market?
B)Will respondents purchase the software if it becomes available?
C)Who will determine the price to be charged?
D)Where should the product be sold?
E)Which computer trade show will be used to introduce the product?

Question 69

One of the key characteristics of brainstorming sessions is

A)no idea is immediately accepted or rejected.
B)everyone must come up with ideas.
C)the first idea is almost always the best idea.
D)only the marketing team is included in these sessions.
E)the manager should always make the final decision.

Question 70

A company has a new concept for a lightweight electric scooter that can be easily folded and taken with you inside a building or on public transportation. The company is currently engaged in concept testing. The most important question during this phase of product development pertains to

A)the cost of research and development.
B)the price of the final product.
C)the cost to manufacture the product.
D)the geographic location of potential test market areas.
E)the respondent's purchase intentions if the product were made available.

Question 71

The National Institutes of Health (NIH)sponsors medical foundations to conduct research to treat rare diseases. The research is then disseminated to the medical community, thus encouraging the development of drugs and therapies more quickly and at a lower cost than would be possible if the research were privately funded. This is an example of

A)early adopters.
B)market testers.
C)an R&D consortia.
D)reverse engineers.
E)concept testers.

Question 72

At the end of a brainstorming session, participants are often asked to

A)identify the worst ideas.
B)defer to management for the final decision.
C)identify which ideas each person proposed.
D)vote on the best ideas.
E)propose one more new idea each.

Question 73

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

A)alpha testing.
B)product launch.
C)test marketing.
D)beta testing.
E)concept testing.

Question 74

Hollywood studios typically release movies targeted toward general audiences (G- or PG-rated movies)during the summer when children are out of school. The timing of the release pertains to the product's

A)premarket test.
B)launch.
C)evaluation.
D)research and development.
E)test marketing.

Question 75

Rolling River Golf Equipment Corp. has been trying to develop a lightweight putter for years but hasn't come up with the best technology. After learning that Griggson Group had what Rolling River needed, Rolling River bought the right to use the technology in its putters. What process is helping the company develop its new putters?

A)licensing
B)R&D consortia
C)brainstorming
D)franchising
E)outsourcing

Question 76

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

A)reverse engineering.
B)licensing technology.
C)customer input.
D)R&D consortia.
E)clinical trials.

Question 77

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.

A)premarket testing
B)licensing technology
C)consumer research
D)geodemographic analysis
E)brainstorming

Question 78

To generate ideas for new products, some firms will purchase the rights to use another firm's technology. This is known as

A)R&D.
B)licensing.
C)consumer research.
D)outsourcing.
E)brainstorming.

Question 79

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

A)Reverse innovation
B)Reverse engineering
C)Selective dissection
D)Redistribution
E)Creative destruction

Question 80

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

A)target marketing.
B)test marketing.
C)product marketing.
D)product launching.
E)premarket testing.