Question 1

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

Accepted Answer

The diffusion of innovation refers to the process by which a new idea, product, or behavior spreads through a population or society, not the life cycle of a product.

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.

Accepted Answer

The statement is true. The availability of try-demo units at various retail stores including Apple stores has helped in the diffusion of the product.

Question 3

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

Accepted Answer

This demonstrates the concept of social proof, not trialability. Social proof is the idea that people are influenced by the actions and approvals of others, while trialability refers to the extent to which an innovation can be experimented with on a limited basis.

Question 4

The failure rate for new products is high.

Accepted Answer

Studies have shown that the failure rate for new products ranges from 40% to 90%.

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.

Accepted Answer

One of the key characteristics of brainstorming sessions is that all ideas, even the “bad” ones, should be encouraged and shared freely. This fosters a creative and open environment, and can often lead to unexpected solutions or connections that may not have been considered otherwise.

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.

Accepted Answer

Innovators are the first 2.5% of the population who adopt a new product or idea. Mallory fits this criteria by being one of the first to get the new iPhone.

Question 7

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

Accepted Answer

The correct sequence is innovators, early adopters, early majority, late majority, and laggards.

Question 8

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

Accepted Answer

The maturity phase of the product life cycle is actually characterized by increased competition as market saturation occurs and new competitors emerge.

Question 9

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

Accepted Answer

New product development involves the creation of innovative products and services, which can add value to a firm's offerings and give them a competitive edge in the market. Therefore, this statement is true.

Question 10

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

Accepted Answer

Premarket testing is a common method used by firms to assess the viability and potential success of a new product before launching it in the market. This testing helps firms to identify any potential issues, identify ways to improve the product, and understand customer needs and preferences. Therefore, it is true that a firm can conduct premarket testing to determine if a new product is commercially viable.

Question 11

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

Accepted Answer

Test marketing involves introducing a new product to a limited market to gather feedback and make necessary modifications before a wider launch. The given statement describes customization or personalization of products by customers, which is not the definition of test marketing.

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.

Accepted Answer

New-to-the-world products can introduce novel features and functionalities that were previously unavailable in the market. This can attract new customers or entice existing customers to switch brands, thereby changing market dynamics and consumer preferences. It can also create a first-mover advantage for the company that introduces the new product, potentially establishing a new 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.

Accepted Answer

The final group on the diffusion of innovation curve is actually the "laggards," who are the most resistant to change and adopt a new product or innovation last, after the late majority.

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.

Accepted Answer

The first group of buyers who want to be the first to have the new product are known as "innovators." Early adopters come after innovators on the diffusion of innovation curve.

Question 15

Fashion trends tend to experience short product life cycles.

Accepted Answer

Fashion trends tend to come and go quickly, resulting in short product life cycles as consumers move on to the next trend.

Question 16

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

Accepted Answer

Innovation is not solely a reaction to competitors, but can also come from within a company's own research and development efforts.

Question 17

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

Accepted Answer

The answer of When Connor asked a few of his...

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.

Accepted Answer

Typewriters are in the decline stage of the product life cycle, not the maturity stage, due to the significant decrease in their use and the shift towards personal computers and digital technology.

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.

Accepted Answer

The product life cycle concept provides a general framework for understanding the typical stages that a product goes through from introduction to decline. However, the specific trajectory of a product's life cycle can be influenced by a variety of factors, such as changes in consumer preferences, advances in technology, and competitive pressures. As a result, it can be difficult for managers to predict exactly how long each stage will last or how steeply sales will rise or fall during each phase.

Question 20

All products tend to follow the same life cycle curve.

Accepted Answer

Different products can have varying life cycle curves due to factors such as market demand, technological advancements, competition, and consumer preferences. Some products may have a rapid growth phase while others might experience a slow and steady growth.

Quiz 12: Developing New Products