c. conjoint study
d. web survey
51. __________ are 40–50 small metropolitan areas throughout the United States that have characteristics, such
as demographics and socioeconomic status, that are representative of the country as a whole.
a. Simulated test markets
b. Area test markets
c. Metropolitan test markets
d. Country test markets
52. When testing the best color for a new detergent, SoapSuds Inc. set up a test market that uses a virtual
shopping experience to give customers a chance to buy the product (or not), which is called a(n) __________
test market.
a. simulated
b. area
c. electronic
d. forecast
53. Using customer data from test marketing to predict the product’s likely success is known as
a. forecasting.
b. foreshadowing.
c. test marketing.
d. profit prediction.
54. The goal of forecasting is to estimate the “$SP.” What does “$SP” stand for?
a. systematic process
b. simulated price
c. sales potential
d. sustained profitability
55. In order to calculate sales potential, we need to know what three things?
a. market price, purchase potential, target market
b. test market size, purchase intention, target market
c. market intention, purchase potential, price
d. market potential, purchase intention, price
56. Because customers typically overstate their purchase intention, research has suggested ratcheting down the
purchase intention estimate by a factor of
a. ¼.
b. ¾.
c. ½.
d. ⅛.
57. What term refers to the likelihood that the target segment will buy the product?
a. sales intention
b. market potential
c. purchase intention
d. sales potential
58. The test marketing was successful. Now, Jules needs to estimate the sales potential of the new all-natural
cleaning product her company developed. Which of the following equations should she use?
a. $SP = (MP × PI) + Pr
b. $SP = (MP + PI) × Pr
c. $SP = MP + PI + Pr
d. $SP = MP × PI × Pr
59. Which of the following stages occurs last?
a. maturity
b. market growth
c. market introduction
d. decline
60. During __________, a new product (good or service) is brought into the marketplace with heavy marketing
spending.
a. market growth
b. market introduction
c. maturity
d. decline
61. In which phase of the product life cycle is customer awareness getting stronger and some buzz occurring in
the marketplace?
a. market introduction
b. decline
c. market growth
d. maturity
62. Company ABC is about to launch a fuller product line in an effort to satisfy more customer segments in the
market. Given these activities, Company ABC’s current product(s) is most likely in which stage of the product
life cycle?
a. maturity
b. market introduction
c. decline
d. market growth
63. The stage of the product life cycle where sales and profits drop and new products replace older generations
is called
a. market growth.
b. market introduction.
c. decline.
d. maturity.
64. Procter & Gamble determined that its Thermacare Heat Wrap was underperforming and lacked a desired
level of growth potential, so it decided to sell the brand. In what phase of the product life cycle was Thermacare
Heat Wrap?
a. growth
b. decline
c. maturity
d. failure
65. A product has more competition during the __________ stage than in any other stage in its life cycle.
a. market maturity
b. market growth
c. market introduction
d. market decline
66. The __________ are 3–5% of consumers who like to try new ideas and are willing to take risks. They tend
to be relatively educated, and capable and confident in assessing information about a product on their own.
a. early adopters
b. innovators
c. early majority
d. laggards
67. The __________ are a group of approximately 10–15% of the population who is so influential that the loss
of one of these customers costs the firm more than the loss of later adopters.
a. innovators
b. late majority
c. early majority
d. early adopters
68. The __________ are more risk averse and waiting to hear that people who have already adopted the product
have had favorable experiences with the new product.
a. early adopters
b. late majority
c. innovators
d. early majority
69. Hannah and Ellen rely on consistent messages received via word of mouth and are older and more
conservative than other customers of Product X. Hannah and Ellen most likely fall into which of the following
categories?
a. late majority
b. early majority
c. laggards
d. innovators
70. What term refers to the group of people who are the most risk averse, skeptical of new products, and
stereotypically lower in income?
a. early adopters
b. early majority
c. innovators
d. laggards
71. __________ tends to be higher when the product has a clear relative advantage over existing products, is
compatible with the customer’s lifestyle, is not overly complex (or the complexity is masked by a user-friendly
interface), and is easily tried or sampled in order to facilitate initial assessment.
a. Consumer acceptance
b. Risk
c. Cost
d. Efficiency
72. Simone started the meeting at BCD Co. by focusing the attendees on the company’s current status. “We have
a good product mix,” she stated. “To continue to grow, we need to target more segments.” Which strategic path
is Simone pursuing?
a. product development
b. market penetration
c. market development
d. diversification
73. What growth strategy combines new markets and new products?
a. market penetration
b. product development
c. market development
d. diversification
74. Amos does not want to find new customers or create new products. Instead, he is opening more stores and
improving the marketing mix—more intriguing advertising, better pricing, better reward program, better in–
store service, better store ambience, etc. What strategy is he using?
a. market penetration
b. product development
c. market development
d. diversification
75. ABC Co. wants to grow through innovation. It has modified several of its products and developed two new
products for its customers. Which strategy is ABC Co. using?
a. market penetration
b. product development
c. market development
d. diversification
76. Which growth strategy is the toughest?
a. market penetration
b. product development
c. market development
d. diversification
77. There is less risk with __________ new products than with __________ new products.
a. inexpensive, expensive
b. expensive, inexpensive
c. incrementally, really
d. really, incrementally
78. The most stunning demographic trend in America and Western Europe is that the population is becoming
a. older.
b. less educated.
c. more wealthy.
d. more concerned about the environment.
79. What sub population is growing faster than any other in the United States?
a. African American
b. Hispanic
c. Asian
d. Caucasian
80. Regarding fast-growing economies, what does “BRIC” stand for?
a. Brazil, Russia, India, China
b. Britain, Russia, Italy, Canada
c. Brazil, Romania, India, Canada
d. Britain, Romania, Italy, China
81. What are new products, and why are they important?
82. Describe the top-down approach to developing new products.
83. List three internal sources and three external sources of new ideas.
84. Describe a conjoint procedure.
85. Explain how focus groups typically work.
86. Identify and discuss the three kinds of test markets used in beta-testing.
87. What is the role of forecasting in marketing? How do we estimate sales potential?
88. Describe the stages in the product life cycle.
ANSWER: During market introduction, a new product (good or service) is brought into the marketplace
with heavy marketing spending (e.g., communications to spark awareness). In addition to advertising to provide
information and attempts at persuasion, promotion can include samples and coupons to spur trial.
The second phase is one of market growth. Sales are accelerating and profits rise at first. Customer awareness is
89. Explain the concept of diffusion of innovation.
ANSWER: The concept of diffusion of innovation is that new products are akin to contagious diseases. If
you put a person with a cold in a room full of people and they sneeze, think about who will get sick fastest—the
people closest to Sneezy. The spreading word of mouth helps activate the process of the diffusion of
90. What trends should marketers watch for?