Question 1

Which of the following would help an entrepreneur get his or her new product as the technical standard?

Accepted Answer

All the options listed contribute to an entrepreneur's efforts to establish their new product as the technical standard. Building relationships with producers of complementary products can enhance the product's ecosystem, making it more attractive. Lowering the price upon introduction can boost adoption rates, and being first to market can secure a competitive advantage even if the product isn't perfect, allowing for improvements over time.

Question 2

Suppose you are an entrepreneur and you sell TV's. When you first entered the market,TV's were in black and white and innovations were very slow. After about five years of time,TV innovations became more frequent with color,picture in picture,and TV/VCR combos. However,after about 10 more years,the innovations decreased again. This market behavior is known as what?

Accepted Answer

The product development S-curve describes the pattern of innovation over time, starting slow, then accelerating as new technologies and features are developed, and finally slowing down again as the product matures and fewer innovations are introduced. This pattern matches the scenario described.

Question 3

A new product was released by Vazco which made packing for trips more efficient.By using Vazco's new vacuum bags,travelers can now decrease the amount of space their belongings usually take up and pack more in one suitcase. A way to get consumers to move from early adopter to early majority is by

Accepted Answer

Focusing on one target market, such as business workers only, is a limited approach that may not reach a wider audience. To move from early adopters to early majority, it is essential to express the solution to the customer's problem clearly, which is achieved through marketing efforts. By constantly marketing the product to any and all potential consumer groups, Vazco can reach a broader audience and increase adoption rates.

Question 4

Which type of cost becomes less per unit as the entrepreneur produces more of a product?

Accepted Answer

Fixed costs do not change with the level of production, so as more units are produced, the fixed cost allocated to each unit decreases, making the per-unit fixed cost lower.

Question 5

Which of the following might suggest that an established firm chooses to improve its current products rather than adopt a new product?

Accepted Answer

All of the above reasons might suggest that an established firm chooses to improve its current products rather than adopt a new product.

Question 6

Approximately 68% of product users fall into which categories?

Accepted Answer

The Early Majority and Late Majority categories make up approximately 68% of product users according to the diffusion of innovation theory. The Innovators, Early Adopters, and Laggards make up the remaining 32%. Therefore, choice B is the best answer.

Question 7

Which of the following classifications of customers is probably least sensitive to the price of the product?

Accepted Answer

Innovators are typically the first customers to adopt a new product or service, and they are generally less price-sensitive because they are motivated by the desire to try something new and innovative. They are more interested in the features and benefits of the product than its cost.

Question 8

Which of the following statements,addressing the adoption of new products,is not true?

Accepted Answer

Early adopters do not typically buy the product before any marketing occurs. Marketing efforts often play a crucial role in informing and attracting early adopters to new products. Early adopters are usually among the first to purchase after a product is introduced and marketed, not before.

Question 9

Making the transition from early adopters to early majority is usually called

Accepted Answer

The process of transitioning from early adopters to early majority is commonly referred to as "crossing the chasm," which is described in the book "Crossing the Chasm" by Geoffrey A. Moore. This term refers to the difficulty of moving from a small, niche market to a larger, mainstream market. The "chasm" represents the gap between these two markets and requires a different approach to marketing and product development to successfully make the transition.

Question 10

Which of the following is important to know as an entrepreneur before entering the diamond ring market?

Accepted Answer

All the options provided are crucial for an entrepreneur to understand before entering the diamond ring market. Knowing the demand trends, revenue figures, style preferences, and the level of competition helps in making informed business decisions.

Question 11

To which customer groups does the entrepreneur have trouble selling enough to make the business worthwhile?

Accepted Answer

Entrepreneurs often struggle to sell to Innovators and Early Adopters because these groups are small and may not provide enough volume to sustain a business.

Question 12

Which of the following statements is least true about an entrepreneurial situation?

Accepted Answer

The statement "Entrepreneurs are better off targeting established markets rather than new markets because it is difficult to predict the needs of new markets" is least true. In fact, many successful entrepreneurs have found success by identifying and targeting new or emerging markets with unmet needs or untapped potential. It is important to carefully research and analyze any market before entering it, regardless of whether it is established or new. Gathering information from customers and using tools like conjoint analysis can help entrepreneurs better understand customer preferences and design products with high appeal.

Question 13

Which group of adopters base buying decisions on intuition about the value of new products and do not require much information to make purchasing decisions?

Accepted Answer

Early Adopters base their buying decisions on intuition and are willing to take risks on new products without needing as much information as the later majority groups.

Question 14

Assume that for local telephone calls,one pays the same rate each month. However,for long distance telephone phone calls,the costs depend on how many long distance calls were made,what time of day they were made,and the length of each call. What type of costs are the long distance calls to the consumer?

Accepted Answer

Long distance telephone calls are dependent on the number of calls, time of day, and duration, which make them variable costs.

Question 15

A Shelter Insurance Agent tends to do a majority of his marketing through customer meetings. This is an example of which form of marketing?

Accepted Answer

The description given aligns with personal selling, which involves a direct interaction between the salesperson and potential customers.

Question 16

In which of the following situations would an entrepreneur have the best advantage?

Accepted Answer

When the solution to customers' needs is novel, there is less competition and the entrepreneur can establish themselves as a leader in that field. They can also potentially create a new market and have the opportunity to set prices and establish their brand.

Question 17

Which of the following is an example of a complimentary products?

Accepted Answer

Coffee and coffee filters are an example of complimentary products because they are typically purchased together. Coffee filters are essential for brewing coffee, so customers who buy coffee will also need to buy filters. This creates an opportunity for coffee and coffee filter manufacturers to work together or offer promotions to encourage customers to purchase both products.

Question 18

AT&T originally required special phone jacks to be installed in each customer's house. After the Carterfone Law was passed,all telephone companies had to use standard jacks like AT&T's. This market structure is known as

Accepted Answer

The market structure referred to in the question is Technical Standard, as it describes the use of standard phone jacks by all telephone companies after the implementation of the Carterfone Law. The other options (Dominant Design, Standard Feature, and Carterfone Structure) do not accurately describe this particular market structure.

Question 19

An entrepreneur is working to develop a new video game. Preliminary information suggests that consumers are concerned about the quality of the graphics,the extra features of the game,and the price,but it is not known which is the most important relative to the others. Research is set up in which copies of the same game,varying with different combinations of graphics,features,and price,are presented to potential consumers . Potential consumers are asked to indicate which copy of the game they prefer. This is an example of using

Accepted Answer

This scenario describes the use of conjoint analysis, a market research technique that involves presenting respondents with different combinations of product features and asking them to choose their preferred option. The goal is to determine which features are most valued by consumers and how changes in those features (such as price or graphics quality) affect consumer preferences. The other options (S Curve, Detail Analysis, Core Rigidities, Feature Surveys) do not accurately reflect the research method being used in this scenario.

Question 20

Which classification of product adopters are not comfortable with new products and will wait for the product to become well-established before purchasing it? Moreover,only when they are shown that the value outweighs the costs do they adopt the product.

Accepted Answer

The Late Majority are not comfortable with new products and tend to wait for it to become well-established. They are also price-sensitive and only adopt the product when they see that its value outweighs its costs. Innovators are the first to adopt new products, Early Adopters adopt new products early on, Early Majority adopt the product before the average person, and Late Majority adopt the product after the average person. Therefore, the best choice is D - Late Majority.

Quiz 9: Marketing in a New Venture