Deck 13: Crafting a Deployment Strategy

Question 1

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

Answer 1

False

Question 2

When Pearl Love Inc.introduced its new range of bodywash,consumers switched from using its soaps,being sold under the same brand name,to using the bodywash.As a result,the company experienced a sharp drop in its soap sales.This scenario represents:

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

Answer 2

A

Question 3

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

Answer 3

True

Question 4

If a firm wishes to avoid giving away its own installed base or complementary goods advantages to others,it may protect them by ensuring its products are incompatible with those of future entrants.

Question 5

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

Question 6

Maverick Systems Inc.is a leading company in the mobile phone market,and profits from its mobile phones are very high.Maverick Systems has developed a new generation of smartphones,which is better than its existing line of smartphones,and has decided to embrace cannibalization of its existing line of smartphones.This means that the company is going to:

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

Question 7

BioSense Prosthetics Inc.was a leader in the prosthetics market and was earning very high profits.The firm developed a new computerized prosthetic arm that would render its previous models obsolete.It decided to withhold the new computerized prosthetic arm from the market.This would 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 smaller installed base for the new computerized prosthetics.

Question 8

Cannibalization is the process by which a firm's sales of one product diminish due to a substitute product offering by a competitor.

Question 9

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 10

Firms can accelerate distribution of a new technology by bundling it with another product that is already in wide use.

Question 11

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

Question 12

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

Question 13

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

Question 14

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

Question 15

Genetech Inc.has produced a new generation of video game consoles.The new product can be used to run the games used in the previous generation of the video game console as well.In this context,Genetech is most accurately applying the concept of:

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

Question 16

Speeding Horse Inc.,a 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 to buy the new console.
C) the transition of customers through product generations will become impossible.
D) a large range of complementary goods of the previous generations, mainly the games, will lose its existing value and utility.

Question 17

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

Question 18

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

Question 19

Firms often find it is difficult to make the transition between successfully selling to early adopters versus the early majority.

Question 20

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

Question 21

Which of the following statements 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 22

When Green Water Publication publishes professional books,it donates or sends 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 23

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._____ would 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 24

_____ 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 25

A(n)_____ price strategy is a short-run strategy that prices goods to cover variable costs and some fixed costs,and it is used by firms in industries plagued with intense price competition.

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

Question 26

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 27

In the context of a firm's product diffusion curve,when there is a chasm between 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 28

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

Question 29

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.In this situation,the best pricing strategy for Sports 360 would be:

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

Question 30

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 31

Which of the following statements 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 using 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 32

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 33

Blue Water Publication Corp.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 most accurately an example of:

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

Question 34

Gemini Car Inc.buys car components from various manufacturers and assembles them into cars,which it sells under its own brand name.From the given information,Gemini Car is most accurately an example of a(n):

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

Question 35

When Pearl Soft Shampoo was released by Clary Laboratories Inc.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 ones,Clary Laboratories entered the market with low prices and dealer incentives.Discuss the possible reasons for this marketing strategy.

Question 36

BioMark Lifesystems Inc.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.Such an arrangement is known as:

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

Question 37

BioSense Prosthetics Inc.is a market leader in prosthetics and earns very high profits.The company has developed a computerized prosthetic arm and is trying to decide when to introduce it to the market.What options does it have?

Question 38

The Rocketingbusiness.com Web site offers large volumes of business research information for no cost.If a 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

Frosty Products Inc.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 40

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 directly increases the sales of complementary goods for its new generation of technology.
D) It is typically less expensive to make a new generation of technology backward compatible than to make it incompatible.