Question 1

How is the early majority section of consumers different from the late majority section?
A) While the early majority makes up the mass market, the late majority is the smallest market segment.
B) The late majority enters the market in the decline stage, whereas the early majority enters the market during the maturity stage.
C) Although the early majority is confident in their ability to master a new technology, the late majority is not.
D) While the late majority prefers buying from unknown new ventures, the early majority relies only on well-established brands.

Accepted Answer

The late majority shares all the concerns of the early majority. However, there is one important difference. Although the early majority is confident in their ability to master a new technology, the late majority is not.

Question 2

When the market for photo film negatives declined with the arrival of digital cameras,Momento Films Inc.,a manufacturer of film negatives,bought out most of its rivals that were planning to exit.This allowed the company to get rid of all the excess capacity and acquire a monopolistic market power in the declining industry.Which of the following strategies has Momento Films adopted in this scenario?
A) harvest strategy
B) maintain strategy
C) consolidated strategy
D) differentiation strategy

Accepted Answer

In the scenario, Momento Films has adopted the consolidation strategy. Although market size shrinks in a declining industry, some firms may choose to consolidate the industry by buying rivals (those who choose to exit). This allows the consolidating firm to stake out a strong position-possibly approaching monopolistic market power, albeit in a declining industry.

Question 3

Although TechnoWare Electronics Inc.still sells its VCR players,a product in its decline stage,the investments made by the company on improving or marketing the product are very low.The company has allocated the least amount of human and financial capital to this department.Which of the following strategies has TechnoWare Electronics adopted in this scenario?
A) harvest strategy
B) maintain strategy
C) consolidation strategy
D) differentiation strategy

Accepted Answer

TechnoWare Electronics is employing the harvest strategy in the given scenario. In pursuing a harvest strategy, the firm reduces investments in product support and allocates only a minimum of human and other resources.

Question 4

Which of the following statements is true of the early majority section of consumers?
A) They come into the market during the introduction stage.
B) They are unaware that many hyped new product introductions will fade away.
C) They weigh the benefits and costs carefully when adopting a new product.
D) They make up the smallest market segment.

Accepted Answer

The customers coming into the market in the growth stage are called early majority. They are pragmatists and are most concerned with the question of what the new technology can do for them. Before adopting a new product or service, they weigh the benefits and costs carefully.

Question 5

On which of the following tenets is the crossing-the-chasm framework,suggested by Geoffrey Moore,based?
A) The number and size of competitors remain constant throughout the industry life cycle.
B) Each stage of the industry life cycle is dominated by a different customer group.
C) Industries tend to follow an unpredictable industry life cycle.
D) The supply and demand sides of the market remain constant irrespective of the phase of the industry life cycle.

Accepted Answer

Based on empirical observations, Geoffrey Moore's core argument is that each stage of the industry life cycle is dominated by a different customer group. Different customer groups with distinctly different preferences enter the industry at each stage of the industry life cycle.

Question 6

It is important for a firm to win over the early majority section of the market to ensure the commercial success of an innovation because they
A) are driven by technology concerns rather than the practicality of a new product.
B) influence the purchase decisions of early adopters.
C) enter into the market in large numbers, creating a herding effect.
D) have the highest purchasing power when compared to the other customer segments.

Accepted Answer

As the early majority section of the market makes up almost one third of the entire market potential, winning them over is critical to the commercial success of the innovation. They are on the cusp of the mass market. Bringing the early majority on board is the key to catching the growth wave of the industry life cycle.

Question 7

Which of the following customer segments as described in the chasm framework make up the mass market?
A) the early and late majority together
B) the early adopters alone
C) the technology enthusiasts and laggards together
D) the technology enthusiasts alone

Accepted Answer

As described in the chasm framework, the early and late majority make up the mass market.

Question 8

While the industry for 3-D televisions is in the introduction stage of the industry life cycle,the CRT (cathode ray tube)television industry is in its decline stage.Which of the following statements will be true in this scenario?
A) The market size for 3-D televisions is extremely large, while the market size for CRT televisions is moderate.
B) While product innovation will be at its maximum for the 3-D television industry, process innovation will be more crucial for the CRT television industry.
C) The focus in the 3-D television industry will be on cost-leadership, whereas in the CRT television industry, the focus will be on differentiation.
D) While the strategic objective of the CRT television industry will be achieving market acceptance, the strategic objective of the 3-D television industry will be pursuing a harvest strategy.

Accepted Answer

While product innovation will be at its maximum for the 3-D television industry, process innovation will be more crucial for the CRT television industry. In the introduction stage, product innovation is at a maximum, and process innovation is at a minimum. Whereas in the decline stage, product innovation is at a minimum, and process innovation is at a maximum.

Question 9

Which of the following statements accurately brings out the difference between technology enthusiasts and early adopters?
A) While the customer segment in the introduction stage consists of early adopters, the customers entering the market in the growth stage are technology enthusiasts.
B) Unlike technology enthusiasts, early adopters' demand is fueled more by intuition and vision rather than technology concerns.
C) While early adopters make up the smallest market segment, technology enthusiasts make up the mass market.
D) Firms need to communicate products' potential applications in a more direct way when attracting technology enthusiasts rather than early adopters.

Accepted Answer

Unlike technology enthusiasts, early adopters' demand is driven by their imagination and creativity rather than by the technology per se. They recognize and appreciate the possibilities the new technology can afford them in their professional and personal lives.

Question 10

At the time when Kevin decided to purchase a tablet computer,the product had just become accessible to the mass market.He purchased the tablet only after he was completely convinced that the benefits it would offer him would far exceed its price.Also,he waited for his friends to try the product and popular gadget television shows to endorse it.Which of the following customer segments does Kevin best represent?
A) laggards
B) technology enthusiasts
C) early adopters
D) early majority

Accepted Answer

Kevin represents the early majority section of the market. The customers coming into the market in the growth stage belong to the early majority group. Early majority customers rely on endorsements by others. They seek out reputable references such as reviews in prominent trade journals or in magazines. As the early majority makes up almost one third of the entire market potential, winning them over is critical to the commercial success of the innovation.

Question 11

The demand for video recorders has drastically reduced,and there are only a few consumer electronics companies selling them at extremely low prices.Also,the current buyers of video recorders are mainly categorized under laggards.Which of the following stages of the industry life cycle is the video recorder industry in currently?
A) growth stage
B) maturity stage
C) decline stage
D) commercialization stage

Accepted Answer

Video recorders are in the decline stage of the industry life cycle. Changes in the external environment often take industries from maturity to decline. In this final stage of the industry life cycle, the size of the market contracts as demand falls.

Question 12

When a firm pursues a maintain strategy,it
A) exits a declining industry to maintain the goodwill of its overall brand name.
B) reduces investments in product support and allocates only a minimum of human and other resources.
C) continues to support marketing efforts even if the demand for the product is declining.
D) chooses to consolidate the industry by buying rival firms, those who plan to exit.

Accepted Answer

If a firm has been following a maintain strategy, it will continue to support marketing efforts at a given level despite the fact that the industry has been declining.

Question 13

While the personal computer industry is flooded and growing with laptops and tablets,Ivan recently bought a desktop,his first personal computer.He realized that a computer at home would be helpful for his children for their school projects,and he could use it to maintain the simple accounts of his plumbing business.Which of the following customer segments does Ivan best represent?
A) early adopters
B) category captains
C) laggards
D) early majority

Accepted Answer

Ivan best represents the laggards segment. Laggards are customers who adopt a new product only if it is absolutely necessary. They tend to enter the market after it is completely mature and frequently during the decline stage.

Question 14

Which of the following statements is true of technology enthusiasts?
A) They make up the largest market segment.
B) They are the customer segment in the maturity stage of the industry life cycle.
C) They are highly price conscious buyers.
D) They enjoy using beta versions of products and providing feedback to companies.

Accepted Answer

Technology enthusiasts enjoy using beta versions of products, tinkering with the product's imperfections and providing (free) feedback and suggestions to companies.

Question 15

Sara can be categorized under the late majority customer segment.Which of the following behaviors is she most likely to exhibit?
A) She will be confident in her ability to master any new technology.
B) She will prefer to buy from well-established brands rather than unknown new ventures.
C) She will not rely on endorsements by the early majority or early adopters.
D) She will buy beta versions of new products and technology.

Accepted Answer

Sara is most likely to buy from well-established brands rather than unknown new ventures. The late majority prefers to buy from well-established firms with a strong brand image rather than from unknown new ventures.

Question 16

Which of the following statements is true of laggards?
A) They make up the largest customer segment for any business.
B) They tend to enter the market frequently during the decline stage.
C) They do not like waiting too long for new technology to release.
D) They are customers who adopt a new product even if it is not necessary.

Accepted Answer

Laggards tend to enter the market after it is completely mature and frequently during the decline stage. They are customers who adopt a new product only if it is absolutely necessary.

Question 17

When a firm pursues a harvest strategy,it
A) exits the industry by bankruptcy or liquidation.
B) invests significant resources in product innovations.
C) buys out its rivals to strengthen its strategic position.
D) reduces investments in product support.

Accepted Answer

When pursuing a harvest strategy, a firm reduces investments in product support and allocates only a minimum of human and other resources.

Question 18

When does a firm fall into the large competitive chasm between early adopters and early majority?
A) when it cannot attract technological enthusiasts to try the beta versions of its products
B) when it creates strong network effects during the growth stage
C) when it fails to successfully launch a mass-market version of its product
D) when the early majority create herding effects for its products

Accepted Answer

The significant differences in the attitudes toward technology of the early majority when compared to the early adopters signify the wide competitive gulf-the chasm-between these two consumer segments. Without adequate demand from the early majority, most innovative products wither away.

Question 19

While the industry for e-book readers is in its growth stage,the industry for landline telephones is in the decline stage of the industry life cycle.Which of the following can be inferred from this?
A) While firms in the e-book reader industry will focus on pursuing a harvest strategy, firms in the landline telephone industry will focus on product innovations.
B) The e-book reader industry is at a more advanced stage than the landline industry of the industry life cycle.
C) While firms in the e-book reader industry will attract customers categorized under late majority, firms in the landline telephone industry will attract the early majority customers.
D) The number of competitors in the e-book reader industry will be larger when compared to the landline telephone industry.

Accepted Answer

The number of competitors in the e-book reader industry will be larger when compared to the landline telephone industry. Changes in the external environment often take industries from the maturity stage to the decline stage. In this final stage of the industry life cycle, the size of the market contracts as demand falls. Only a few large firms are left in the industry. In the growth stage, however, there are many competitors.

Question 20

The customers entering the market in the growth stage are primarily
A) technology enthusiasts.
B) laggards.
C) early adopters.
D) late majority.

Accepted Answer

The customers entering the market in the growth stage are early adopters. They make up roughly 13.5 percent of the total market potential.

Quiz 7: Business Strategy: Innovation and Entrepreneurship

How is the early majority section of consumers different from the late majority section?

Which of the following statements is true of the early majority section of consumers?

On which of the following tenets is the crossing-the-chasm framework,suggested by Geoffrey Moore,based?

It is important for a firm to win over the early majority section of the market to ensure the commercial success of an innovation because they

Which of the following customer segments as described in the chasm framework make up the mass market?

While the industry for 3-D televisions is in the introduction stage of the industry life cycle,the CRT (cathode ray tube) television industry is in its decline stage.Which of the following statements will be true in this scenario?

Which of the following statements accurately brings out the difference between technology enthusiasts and early adopters?

When a firm pursues a maintain strategy,it

Which of the following statements is true of technology enthusiasts?

Sara can be categorized under the late majority customer segment.Which of the following behaviors is she most likely to exhibit?

Which of the following statements is true of laggards?

When a firm pursues a harvest strategy,it

When does a firm fall into the large competitive chasm between early adopters and early majority?

While the industry for e-book readers is in its growth stage,the industry for landline telephones is in the decline stage of the industry life cycle.Which of the following can be inferred from this?

The customers entering the market in the growth stage are primarily