Chapter 8

Question 1

Product

Answer 1

Anything that is of value to a consumer and can be offered through a marketing exchange

Question 2

Innovation

Answer 2

The process by which ideas are transformed into new products and services that will help firms grow

Question 3

Diffusion of innovation

Answer 3

The process by which the use of an innovation, whether a product or a service, spreads throughout a market group over time and over various categories of adopters

Question 4

Pioneers

Answer 4

New product introductions that establish a completely new market or radically change both the rules of competition and consumer preferences in a market; also called breakthroughs

Question 5

Disruptive innovations

Answer 5

New product introductions that are simpler, less sophisticated, and usually less expensive than existing products or services

Question 6

First movers

Answer 6

Product pioneers that are the first to create a market or product category, making them readily recognizable to consumers and thus establishing a commanding and early market share lead

Question 7

Innovators

Answer 7

Those buyers who want to be the first to have the new product or service

Question 8

Early adapters

Answer 8

The 2nd group of consumers in the diffusion of innovation model, after innovators, to use a product or service innovation; generally don’t like to take as much risk as innovators

Question 9

Early majority

Answer 9

A group of consumers who don’t like to take much risk and therefore rend to wait until bugs are worked out

Question 10

Late majority

Answer 10

The last group of buyers to enter a new product market

Question 11

Laggards

Answer 11

Consumers who like to avoid change and rely on traditional products until they are no longer available

Question 12

The Product Development Process

Answer 12

1) Idea Generation
2) Concept Testing
3) Product Development
4) Market Testing
5) Product Launch
6) Evaluation of Results

Question 13

Factors Affecting Product Diffusion Speed

Answer 13

• relative advantage
• compatibility
• observability
• complexity and trialability

Question 14

Reverse Engineering

Answer 14

Involves taking apart a competitors product, analyzing it, and creating an improved product that does not infringe on the competitors’s patents, if any exist

Question 15

Lead users

Answer 15

Innovative product users who modify existing products according to their own ideas to suit their specific needs

Question 16

Concepts

Answer 16

Brief written descriptions of a product/service; its technology, working principles and forms, and what customer needs it would satisfy

Question 17

Concept Testing

Answer 17

The process in which a concept statement that describes a product or a service is presented to potential buyers or users to obtain their reactions

Question 18

Product Development

Answer 18

Entails a process of balancing various engineering, manufacturing, marketing and economic considerations to develop a product

Question 19

Prototype

Answer 19

The 1st physical form or service description of a new product, still in rough or tentative form, that has the same properties as a new product but is produced through different manufacturing processes, sometimes even crafted individually

Question 20

Alpha Testing

Answer 20

An attempt bu the firm to determine whether a product will perform according to its design and whether it satisfies the need for which it was intended; occurs in the firm’s R&D department

Question 21

Beta Testing

Answer 21

Having potential consumers examine a product prototype in a real use setting to determine its functionality, performance, potential problems, and other issues specific to its use

Question 22

Premarket Tests

Answer 22

Conducted before a product or service is brought to market to determine how many customers will try and then continue to use it

Question 23

Test Marketing

Answer 23

Introduces a new product or service to a limited geographical area prior to a national launch

Question 24

Product Life Cycle

Answer 24

Defines the stages that new products move through as they enter, get established in, and ultimately leave the marketplace and thereby offers marketers a starting point for their strategy planning

Question 25

Introduction Stage

Answer 25

Stage of the product life clue when innovators start buying the product

Question 26

Growth Stage

Answer 26

Stage of the product life cycle when the product gains acceptance, demand and sales increase, and competitors emerge in the product category

Question 27

Maturity Stage

Answer 27

Stage of the product life cycle when industry sales reach their peak, so firms try to rejuvenate their products by adding new features or repositioning them

Question 28

Decline Stage

Answer 28

Stage of the product life cycle when sales decline and the product eventually exits the market