Question 1

__________ is the process by which ideas are transformed into new products and services that will help firms grow.
A) Beta testing
B) Concept testing
C) Innovation
D) Reverse engineering
E) The product life cycle

Accepted Answer

Innovation is the process of turning new ideas into products or services that can help a business grow. This can involve new technologies, processes, or business models that can help a company stay competitive and meet the changing needs of its customers. Beta testing and concept testing are both important parts of the innovation process, but they are more focused on testing and refining new ideas, rather than generating them. Reverse engineering is the process of taking something apart to understand how it works, and is not directly related to generating new ideas or products. The product life cycle is a model that describes the stages a product goes through from introduction to decline, and is not specifically related to the innovation process.

Question 2

Compatibility is important for rapid diffusion of new products because products that are consistent with consumers' past behavior will be more readily accepted.

Accepted Answer

Compatibility with consumer behavior helps to reduce barriers to adoption of new products, making them more readily accepted and diffused in the market.

Question 3

New-to-the-world products that create new markets can add tremendous value to firms.

Accepted Answer

New-to-the-world products have the potential to create entirely new markets, providing firms with immense value and competitive advantage.

Question 4

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

Accepted Answer

This definition actually describes user-generated innovation, which is different from test marketing. Test marketing involves introducing a product to a select group of customers in a specific geographic area to test how well it will perform in the broader market.

Question 5

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

Accepted Answer

This is known as the social influence effect or word-of-mouth effect, where people are influenced by the behaviors and opinions of those in their social circle.

Question 6

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, whether good or bad, should be welcomed and encouraged. This creates an open and accepting environment that generates more creative thinking and original ideas. The focus should be on quantity over quality, and wild or seemingly ridiculous ideas should not be immediately rejected as they may inspire new and innovative solutions.

Question 7

The most challenging part of applying the product life cycle concept is that managers do not know exactly how long each stage of the cycle will last.

Accepted Answer

The length of time for each stage of the product life cycle can vary based on various factors such as market demand, competition, and product innovation. Therefore, it is difficult for managers to accurately predict the lifespan of each stage.

Question 8

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 9

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

Accepted Answer

This is true as consumer adoption of new products varies and can be affected by factors such as product awareness, perceived benefits, and personal preferences. The diffusion of innovation theory suggests that adopters can be categorized into different groups, such as innovators, early adopters, early majority, late majority, and laggards, based on the time it takes for them to adopt a new product.

Question 10

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

Accepted Answer

New product development involves introducing innovative ideas and solutions to the market, which can add value to a firm's products and services. By creating new offerings or improving existing ones, a firm can differentiate itself from competitors and potentially capture new market share. Thus, new product development is an important way for firms to stay competitive and add value to their offerings.

Question 11

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 12

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

Accepted Answer

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

Question 13

The majority of new products are failures.

Accepted Answer

This is true. Studies have shown that up to 80% of new products fail in the market. There are various reasons for this, including lack of market research, poor timing, and ineffective marketing strategies.

Question 14

New product development adds value to a firm's products and services through:
A) early majority substitution.
B) innovation.
C) removal of laggards.
D) pioneer pretesting.
E) beta concept testing.

Accepted Answer

New product development adds value to a firm's products and services through innovation, which involves creating new or improved products, services, or processes that better meet the needs of customers or create new markets. The other choices, such as early majority substitution and removal of laggards, are not necessarily outcomes of new product development, and pioneer pretesting and beta concept testing are more specific strategies or methods within the new product development process.

Question 15

The fact that the Apple iPad is easy to try--demo units are available at Apple stores as well as other retail stores--is helping it to diffuse more quickly.

Accepted Answer

The statement is saying that the easy availability of demo units is helping the iPad to diffuse (spread) more quickly.

Question 16

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

Accepted Answer

Premarket testing can help a firm assess the potential demand and market acceptance of a new product, which can assist in determining its commercial viability.

Question 17

A product will likely remain in the maturity stage of the product life cycle until a superior product comes along to replace it.

Accepted Answer

This is because in the maturity stage, a product has already reached its peak in terms of sales and profits. It can continue to generate revenue at a stable rate for a prolonged period of time, as long as there are no major changes or improvements in the market that would render it obsolete or inferior compared to newer products. However, once a superior product comes along, consumers may shift their preferences and the older product may decline and eventually enter the decline stage of its life cycle.

Question 18

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 product has become established and more competitors have entered the market.

Question 19

The diffusion of innovation curve proposes that purchasers can be divided into five groups.The first group consists of buyers who want to be the first on the block to have the new product; they are known as early adopters.

Accepted Answer

The answer of The diffusion of innovation curve proposes that...

Question 20

In the diffusion of innovation curve,the late majority is the final group of buyers to adopt an innovation.

Accepted Answer

The final group to adopt an innovation in the diffusion of innovation curve is the "laggards," not the "late majority."

Quiz 11: Developing New Products

__________ is the process by which ideas are transformed into new products and services that will help firms grow.