Question 1

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 2

The diffusion of innovation curve follows the following 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 3

The introduction stage of the product life cycle is characterized by negative or low profits.

Accepted Answer

During the introduction stage of the product life cycle, sales are typically low and marketing and R&D expenses are high, leading to negative or low profits.

Question 4

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 demo units at various retail stores, including Apple stores, makes it easier for people to try out the iPad, which has aided in its faster diffusion.

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 bad ones, should be welcomed and explored without judgment. This can often lead to creative solutions and new ideas that may not have otherwise been considered.

Question 6

When consumers see their friends using an innovation, it often persuades them to try it too.

Accepted Answer

This phenomenon is known as social influence or social proof, and it can be a powerful motivator for consumers to adopt new products or services. Seeing friends, family members, or even social media influencers using an innovation can create a sense of trust and legitimacy around the product, making it more appealing to potential consumers.

Question 7

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

Accepted Answer

New product development involves introducing new products or services to the market through innovation, which can increase the value of a firm's offerings and make them more competitive in the market. Therefore, the statement is true.

Question 8

Even if products succeed, not all consumers adopt new-to-the-world products at the same time.

Accepted Answer

This is true as there are often early adopters, early majority, late majority, and laggards in the adoption of new products.

Question 9

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

This statement is true. New-to-the-world products have the potential to disrupt existing markets and create new ones. They can also change consumers' preferences and behaviors by offering new solutions and experiences. Examples of such products include the iPhone, Airbnb, and Tesla.

Question 10

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 11

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

Accepted Answer

Test marketing is not related to customers modifying existing products, but rather it is a process of introducing a new product or service in a limited market to gather feedback and gauge consumer demand before a full launch.

Question 12

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 characterized by increased competition, as the market becomes saturated and more competitors enter the market with similar products.

Question 13

The failure rate for new products is high.

Accepted Answer

Studies have shown that the failure rate for new products is typically high, with some estimates ranging from 80% to 95%.

Question 14

Fashion trends tend to experience short product life cycles.

Accepted Answer

Fashion trends are known to have a short lifespan as they are constantly changing and evolving in response to consumer demand and market trends. Items that were considered fashionable last season may quickly become outdated or irrelevant, leading to a new wave of products and styles that captures the attention of consumers. As a result, fashion products are often designed and marketed with a short-term focus, leading to a shorter product life cycle compared to other industries.

Question 15

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 16

Although innovation strategies may not work in the long run, overriding short-term reasons compel firms to introduce new products and services.

Accepted Answer

The answer of Although innovation strategies may not work in...

Question 17

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 how products evolve over time, but the specific shape and duration of each product's life cycle can vary significantly depending on a wide range of factors, including consumer preferences, competitor actions, and technological advancements. Therefore, it is challenging for managers to accurately predict how a particular product will move through each stage of its life cycle.

Question 18

When Glenn asked a few of his regular customers to test his prototype surfboard, he was engaging in alpha testing.

Accepted Answer

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

Question 19

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

Accepted Answer

Premarket testing is a common practice to determine if a new product is commercially viable. This testing involves getting feedback from potential customers to assess market demand, identify any potential issues, and make necessary improvements before launching the product.

Question 20

When the iPad Mini came out, Sasha spent the night in front of the store so she could get one before any of her friends. According to the diffusion of innovation, Sasha is an innovator.

Accepted Answer

Innovators are the first group of people to adopt a new innovation, so Sasha's behavior of camping outside the store to be the first to get the iPad Mini fits that category.

Quiz 12: Developing New Products