Deck 13: Crafting a Deployment Strategy

Question 1

In marketing a new product to the late majority and laggards,a company should emphasize the advanced technological features of the new product.

Answer 1

False

Question 2

Firms should always be racing to launch their products as early as possible.

Answer 2

False

Question 3

If a firm's objective is maximum market skimming,it will initially set a high price on new products.

Answer 3

True

Question 4

Firms in industries characterized by increasing returns will use the objective of maximizing market share and a penetration pricing strategy.

Question 5

Marketing channels that enable high content and selective reach are appropriate for innovators and early adopters.

Question 6

If a firm willingly cannibalizes its existing products with more advanced products,the firm can make it very easy for other firms to achieve a technological lead large enough to prove persuasive to customers.

Question 7

Viral marketing is based on the fact that people are more receptive to,or have greater faith in,information that comes through personal contacts.

Question 8

If customers require extensive education and service,selling through mail order or online ordering may be the best option.

Question 9

While a maven with a valuable piece of information is likely to expose it to a great number and diversity of people,the connector is likely to convey the information to fewer people but in more detail.

Question 10

Cannibalization is the process by which a firm's sales of one product diminishes as a result of a substitute product offering by a competitor.

Question 11

Firms intending to maximize market share,typically use market skimming pricing strategy.

Question 12

Bundling products together can offer firms the advantage of switching costs.

Question 13

Difficulty in transition between successfully selling to early adopters versus the early majority results in a chasm in the product's diffusion curve.

Question 14

Bundling relationships occur when firms encourage distributors to carry their products by offering them guarantees (such as promising to take back unsold stock) or agreeing to sell the product on consignment.

Question 15

A firm can signal its commitment to an industry by making substantial investments that would be difficult to reverse.

Question 16

Innovators are unwilling to accept incompleteness in products.

Question 17

When manufacturers bypass wholesalers and retailers to sell directly to end users it is called backward compatibility.

Question 18

The value of a technological innovation is solely determined by what the technology can do.

Question 19

In crafting an advertising message,firms must focus more on making the advertisements entertaining and memorable rather than on providing a significant quantity of informative content.

Question 20

If a firm wishes to avoid giving away its own installed base or complementary goods advantages to others,it should ensure that its products are incompatible with those of future entrants.

Question 21

Super Alarm Inc.makes customized door security systems which it sells under its own brand name.These security systems require installation,extensive customer education,and regular services._____ will be the most appropriate selling method for Super Alarm Inc.

A) Employing a direct sales force
B) Creating an online ordering system
C) Using a mail-order catalog system
D) Using a cannibalization strategy

Question 22

A(n) _____ price strategy prices goods to cover variable costs and some fixed costs.

A) market skimming
B) penetration
C) survival
D) economy

Question 23

Blue Water Publication is planning to sell its books solely through its Web site BlueWaterbooks.com.By doing so,it ceases to require wholesalers and retailers.This is an example of:

A) disintermediation.
B) backward compatibility.
C) value added reselling.
D) bundling arrangement.

Question 24

If a firm invests in continuous innovation and willingly cannibalizes its existing products with more advanced products,the firm can:

A) lose a significant number of customers to competitors.
B) make its products more backward compatible.
C) prevent competitors from achieving a significant technological lead.
D) gain greater trust from distributors who have huge stocks of the existing product.

Question 25

When Sports 360,a sports bar in New York,saw yet another sports bar open up across the street it knew that it would have to lower its price again to stay in business.The city already had too many sports bars and Sports 360 intended on being one of those left after the inevitable shake out.The best pricing strategy for Sports 360 will be:

A) premium pricing.
B) market skimming.
C) survival pricing.
D) a freemium program.

Question 26

Companies that buy manufacturer's products in bulk,and then resell them (often in smaller or more diverse bundles) to other supply channel members are referred to as _____.

A) wholesalers
B) manufacturers' representatives
C) retailers
D) value-added resellers

Question 27

Gemini Car Inc.buys car components from other manufacturers and assembles them into cars,which it sells under its own brand name.This is an example of:

A) pirate operator.
B) original equipment manufacturer (OEM).
C) disintermediation.
D) category captain.

Question 28

Which of the following is an advantage of making a new generation of technology backward compatible?

A) Consumers will have to buy completely new complements.
B) Consumer switching costs may be lower because they anticipate using their existing complements.
C) It allows a firm to reap the benefits of cannibalization.
D) It is typically less expensive to make a new generation of technology backward compatible than to make it incompatible.

Question 29

Which of the following is a disadvantage of using the Internet for advertising over other media?

A) Relatively high cost
B) Low audience selectivity
C) Lack of interactive possibilities
D) High clutter

Question 30

Which of the following is true of the different advertising media?

A) Magazines have a short ad purchase lead time.
B) Yellow pages have low believability and are expensive.
C) Newsletters have a narrow reach, but provide high selectivity.
D) Telephone advertising has relatively low cost.

Question 31

When movie star Rachel's troubled marriage came to the limelight,the sales of her line of clothes and perfumes escalated.This is an example of:

A) bundling relationships.
B) publicity.
C) cannibalization.
D) personal selling.

Question 32

Genetech Inc.has produced a new generation video game console.The new product can still be used to run the same games as the previous generation of the video game console.In this context,Genetech is typically applying:

A) backward integration.
B) backward compatibility.
C) backward linkage.
D) backward traceability.

Question 33

When Blue Water publication releases professional books,it lends or donates a number of these new books to university libraries and professors.Which of the following strategies is the firm using to accelerate distribution?

A) Bundling relationship
B) Product modularity
C) Sponsorship
D) Consignment arrangement

Question 34

Maverick Systems was a leader in the phone market and profits from its cell phones were very high.Maverick Systems developed a new generation smartphone and has been advised by a consulting firm to "embrace cannibalization." This means that the company should:

A) introduce the new technology right away and increase its market lead while taking away profits from its present product.
B) delay introduction of the next generation product until profits have begun to significantly decrease for the current product.
C) use up most of its financial resources in promoting the new phone.
D) wait for the previous cell phone to become obsolete and then introduce this new phone into the market.

Question 35

_____ marketing is an attempt to capitalize on the social networks of individuals to stimulate word-of-mouth advertising.

A) Ambush
B) Viral
C) Test
D) Real-time

Question 36

Speeding Horse Inc.,the leader in the video game console market,is making its new generation consoles backward compatible with its previous games.This means that:

A) it is giving away its own installed base or complementary goods advantages to competitors.
B) it is providing a significant incentive to the owners of its previously developed consoles and games.
C) the transition of customers through product generations will become difficult.
D) a large range of complementary goods of the previous generations, mainly the games, will lose its existing value and utility.

Question 37

BioSense Prosthetics was a leader in the prosthetic arm market and profits from it were very high.The firm developed a new computerized prosthetic arm that would render its previous prosthetics obsolete.It decided to withhold the new computerized prosthetic arm from the market.This will allow the firm to:

A) minimize its return on investment in developing each generation of the product.
B) make its products backward compatible.
C) avoid cannibalization of the sales of its current prosthetics.
D) build a larger installed base for the new computerized prosthetic.

Question 38

The Rocketingbusiness.com Web site offers large volumes of business research information for free.If the user is interested in more comprehensive information and business consultation,the site offers these services for a premium fee.This is typically an example of _____ pricing model.

A) penetration
B) market skimming
C) survival
D) freemium

Question 39

When Pearl Love introduced its new range of body wash,consumers switched from using soaps,sold under the same brand,to its new body wash.As a result,the company experienced a sharp drop in its soap sales.This is best known as:

A) cannibalization.
B) the vampire effect.
C) the halo effect.
D) vaporware.

Question 40

BioMark Lifesystems wanted to enhance the adoption of its new diagnostic substances by medical laboratories.It made an agreement with the dominant producer of syringes and test tubes to have its diagnostic substances sold to laboratories in a package along with the syringes and tubes.This arrangement is known as:

A) sponsorship.
B) product modularity.
C) a bundling relationship.
D) disintermediation.

Question 41

Phoenix System's desktop is almost in its saturation stage and is mostly being adopted by laggards in the computer market.The company must ensure that its marketing message:

A) is high on technical content.
B) stresses on simplicity and reliability of the desktop.
C) stresses on the leading-edge nature of the desktop.
D) reaches the audience through an expensive marketing channel.

Question 42

Which of the following is true of innovators and early adopters?

A) They are unwilling to take risks and to pay high prices.
B) They may demand considerable customization and technical support.
C) They are more likely to respond to marketing that communicates the product's completeness.
D) For this market segment, detailed technical information is not as important as using market channels with high reach and high credibility.

Question 43

Which of the following is true of using marketing to shape perceptions and expectations?

A) Preannouncements reduce excitement about a product before its release.
B) A firm that aggressively promotes its products loses its actual installed base and its perceived installed base.
C) A firm should avoid use of vaporware if other vendors beat the firm to market and the firm fears that customers may select a dominant design.
D) A firm can signal its commitment to an industry by making substantial investments that would be difficult to reverse.

Question 44

In the context of a firm's product diffusion curve,when there is a chasm between the early adopters and early majority customers:

A) the firm must reduce its production capacity.
B) the firm should improve its efficiency to target the mass market.
C) the early majority market becomes saturated.
D) the early majority market is ready to buy the product.

Question 45

In the context of Gladwell's theories,define the terms connectors,mavens,and salespersons.

Question 46

Gerald Rupert is a retired race car driver.He is writing a book and planning a video release to share his racing experiences.He is trying to decide whether to market these items directly to consumers over the Internet or to use intermediaries.To make this decision he needs to know the pros and cons of each route.Provide the necessary information and make a recommendation to him.

Question 47

Preadvertised products that are not actually on the market yet and may not even exist are referred to as _____.

A) substitute products
B) value-added products
C) consignments
D) vaporware

Question 48

Frosty Products is coming out with a new type of computerized refrigerator with a flat panel display that accesses the Internet for recipes,nutrition information,etc.Which group (innovators,early adopters,early majority,late majority,or laggards) should the company target its promotion toward initially,and what type of message and medium should it use?

Question 49

BioSense Prosthetics was a leader in the prosthetic arm market and profits from its prosthetics were very high.BioSense developed a computerized prosthetic arm and is trying to decide when to introduce it to the market.What options does it have?

Question 50

When Clary Laboratories released Pearl Soft Shampoo in the late 1970s it was an innovative hair care concept because it repaired split ends.Even though the new product was an improvement on the previous one,Clary Laboratories entered the market with low prices and dealer incentives.Discuss the possible reasons for this marketing strategy.