64) Adopters of new products move through five stages. These stages begin with ________ and
follow with interest, evaluation, trial, and adoption.
A) awareness
B) investigation
C) trial
D) innovation
E) diffusion
65) Identify the stage in the consumer adoption process in which the customer is stimulated to
seek information about the innovation.
A) awareness
B) adoption
C) interest
D) evaluation
E) trial
66) Robert has heard about the latest cell phone from LG electronics that features Wi-Fi hotspot
technology. Wi-Fi hotspot is a technology that allows users to share mobile internet with other
Wi-Fi enabled devices. Robert visits the company’s Web site to read more about the phone.
Robert is in the ________ stage of consumer-adoption process.
A) interest
B) awareness
C) evaluation
D) trial
E) adoption
67) Armordo is a famous vacuum cleaner brand in Africa. Clara has heard of Armordo and she
knows that the product is a success. She has started considering whether or not to buy the
vacuum cleaner. What stage of the consumer-adoption process is Clara in?
A) awareness
B) adoption
C) evaluation
D) trial
E) interest
68) Which of the following is the mental step in consumer-adoption process where the customer
starts considering whether to try the innovation?
A) adoption
B) trial
C) awareness
D) evaluation
E) interest
69) People who are technology enthusiasts, venturesome, and who enjoy tinkering with new
products and mastering their intricacies are called ________.
A) innovators
B) early adopters
C) early majority
D) investigators
E) experimenters
70) Troma Inc., is a famous manufacturer of cookware, that follows a traditional distributor-
retailer system to distribute its products. The company abstains from the use of automated supply
chain management (SCM) system mainly due to the fear of unknown. However, rapidly
escalating operational costs and inefficiencies have made it absolutely necessary for the company
to implement an SCM system. The company goes for a big-bang installation of SCM system to
become more competitive and cost effective. Identify the adopter group to which Troma belongs.
A) innovator
B) early adopter
C) early majority
D) laggard
E) late majority
71) Which of the following characteristics is closely associated with late majority adopter
groups?
A) superior technological knowledge
B) low price sensitiveness
C) opinion leadership
D) deliberate pragmatism
E) high risk aversion
72) Joseph, a student of the Columbia University, finds many of his classmates have purchased
the I-pad tablet PC from Apple Computers. I-pad, launched a few months before has been
identified as a very useful product and many students in the U.S. have rated it highly.
Considering all these, Joseph also decides to purchase an I-pad. Which of the following is the
adopter group to which Joseph belongs?
A) early adopter
B) innovator
C) late majority
D) laggard
E) early majority
73) Five characteristics influence the rate of adoption of an innovation. One of these is
________.
A) marketing expertise
B) relative advantage
C) packaging attractiveness
D) government regulations
E) place of value exchange
74) ________ is the effect one person has on another’s attitude or purchase probability.
A) Sharing power
B) Collaborative power
C) Market influence
D) Brand power
E) Personal influence
75) Relative advantage of an innovation refers to the degree to which ________.
A) it matches the values and experiences of the individuals
B) it is difficult to understand or use
C) it can be tried on a limited basis
D) it appears superior to existing products
E) the benefits of use are observable or describable to others
76) The degree to which the beneficial results of an innovation’s use are observable or
describable to others is called ________.
A) divisibility
B) communicability
C) compatibility
D) relative advantage
E) plainness
77) Which of the following terms refers to the degree to which the innovation can be tried on a
limited basis?
A) compatibility
B) relative advantage
C) divisibility
D) communicability
E) complexity
78) Organic growth refers to increasing the profitability of the organization by increasing
employee productivity.
79) Companies typically must create a strong R&D and marketing partnership to pull off a
radical innovation.
80) High-tech firms that function in a market with high technological uncertainty, high market
uncertainty, and high investment costs are not likely to seek radical innovation.
81) Companies that fail to develop new products leave their existing offerings vulnerable to
increased domestic and foreign competition.
82) Most established companies focus on incremental innovation rather than radical innovation.
83) Shorter product life cycles are common in industries characterized by low level of
competition.
84) Companies should use normal investment criteria to budget for new-product developments.
85) Almost all companies use the conventional percentage-of-sales figure while budgeting for
new product development.
86) Skunkworks are formal workplaces where intrapreneurial teams attempt to develop new
products.
87) Venture teams are cross-functional groups charged with developing a specific product or
business.
88) A business analysis is performed mainly to identify if a company has got a technically and
commercially sound product.
89) A spiral development process recognizes the value of returning to an earlier stage to make
improvements before moving forward.
90) The demand landscape uses conceptual lens and structured innovative-thinking tools to
achieve market perspectives from different angles.
91) The strategic blueprint thinks about how the new product can fit into customers’ lives and
how it can be distinguished from competitors.
92) Crowdsourcing means inviting the Internet community to help create content or software,
often with prize money or a moment of glory as an incentive.
93) Cocreation can help a company create favorable word of mouth.
94) Employees can be a source of ideas for improving production, products, and services.
95) Attribute listing lists several ideas and considers each in relationship to the others.
96) Reverse assumption analysis lists all the normal assumptions about an entity and then turns
them around.
97) Morphological analysis starts by forming a new dimension and then thinks about the possible
problems of the dimension.
98) A DROP-error occurs when the company accepts a bad idea.
99) A category concept defines the product’s attributes and features.
100) Concept testing means validating the product concept by discussing within the design
group.
101) Rapid prototyping refers to designing products on a computer and then producing rough
models to show potential consumers for their reactions.
102) Perceived value refers to the gap between actual needs and satisfied needs of a customer.
103) Consumer preferences for alternative product concepts can be measured with conjoint
analysis.
104) A major drawback of conjoint analysis is that it cannot be used to measure objective
attributes such as estimated market share and profit.
105) The trade-off approach may be easier to use when there are only a few variables and
alternatives.
106) After a test, the most customer-appealing offer will be the most profitable offer to make.
107) A business analysis is typically performed after the management has developed the product
concept and marketing strategy.
108) Survival-age distribution refers to the number of customers that the product has in year one,
two, three, and so on.
109) Dragalong income refers to additional income whereas cannibalized income refers to
reduced income.
110) Modular function deployment methodology takes the list of desired customer attributes
generated by market research and turns them into a list of engineering attributes that engineers
can use.
111) Beta testing tests the product within the firm to see how it performs in different
applications.
112) Sales-wave research can be implemented quickly and carried out without final packaging
and advertising.
113) Expensive industrial goods and new technologies will normally undergo alpha and beta
testing.
114) Some firms might delay new product launch until after the competitor has borne the cost of
educating the market and its product may reveal flaws the late entrant can avoid. This can be
classified as a parallel entry.
115) At the interest stage of consumer-adoption process, the consumer becomes aware of the
innovation but lacks information about it.
116) Compatibility refers to the degree to which the innovation matches the values and
experiences of the individuals.
117) What are the types of new products that a firm can introduce? What are the problems
associated with introducing a truly innovative product? What are the necessary conditions to
create a radically innovative product?
118) Identify the major reasons why new product failures occur.
119) How do companies organize new product development?
120) Explain how stage-gate systems are used by companies to manage innovation and new
product launches.
121) Briefly explain the three parts of the demand-first innovation and growth (DIG) framework.
122) Explain three techniques for stimulating creativity to generate better ideas.
123) What is concept testing? What is its importance? Explain two modern techniques used for
concept testing.
124) Explain the concepts of sales-wave research and simulated test marketing.
125) Briefly explain the three choices available to companies when deciding the timing of
market entry.
126) What is the consumer-adoption process? What are the various steps in the process?
127) What does the term organic growth mean?
128) I-ball, a cell phone manufacturer introduces a cell phone targeted at customers aged above
70. It has features such as loud volume, large keys, and so forth. How do you classify this
product innovation? What could be a possible disadvantage of this product?
129) What is incremental innovation? Give an example of incremental innovation.
130) Tosho Electronics, a leading Japanese, electronic manufacturer believes shorter product life
cycles of new products reduces the scope for R&D and innovation. Offer a possible reason for
shorter lifecycles.
131) Dormentor, Inc. produces converts and markets packaging products including boxboard,
container board and numerous other specialty packaging products. In an attempt to increase its
organic growth, the company decides to introduce new products. It asks the managers and
employees to send in ideas for new products. Before launching products based on any of these
ideas, what are the stages that it has to go through?
132) Interno Computers Inc., together with subsidiaries, designs, manufactures, and markets
personal computers and mobile communication and media devices, as well as selling related
software, services, peripherals, networking solutions, and applications worldwide. The company
is planning to launch a high-end portable digital music player worldwide. What is the best way to
organize this product launch?
133) What is a spiral development process?
134) Andersen, the CEO of a home appliance manufacturer, believes in controlled idea
generation techniques such as brainstorming when creating new designs and ideas for product
revisions. He does not engage in observational methods. What part of DIG framework is
eminently used here?
135) What is crowdsourcing?
136) What is the purpose of appointing an idea manager?
137) Horon Furniture is a manufacturer of office furniture. The company is known for its
innovative multi-purpose furniture. When designing a new product, the designers list several
ideas and consider each in relationship to others. For example, The company considers various
options such as an office table, foldable chairs, and filing cabinet, etc. Finally the company may
come up with a foldable office table with chairs attached and with a filing cabinet. Describe the
creativity technique used at Horon Furniture.
138) Use reverse assumption analysis to analyze a school.
139) A group of young students run an Internet center. In an attempt to increase their
profitability they start a cafe alongside the existing business. Explain the type of marketing used
here.
140) What is a brand-positioning map?
141) Caribou Coffee Company, Inc. operates coffeehouses primarily in the United States. The
company wants to launch a new brand of specialty coffee and it has created a few hypothetical
combinations. The company wants to select two of the combinations after obtaining a ranking by
customers based on their preference. What concept testing method is suited here?
142) What is the significance of performing business analysis?
143) GameTech International Inc. engages in the design, development, and marketing of
interactive electronic bingo systems primarily in the United States. Some top managers want to
collect sales-wave research, but others disagree, offering several disadvantages. List these
disadvantages.
144) Mobile phone company HCF delayed the introduction of a new cellphone model with
innovative features so that the launch could coincide with that of its competitor, LCM, which
was introducing a phone with similar features. What kind of entry did HCF use? How can this
benefit the company?
145) GameTech International Inc. engages in the design, development, and marketing of
interactive electronic bingo systems primarily in the United States. The company has plans to
enter developing markets such as Brazil and India. TechToys, GameTech’s major competitor has
already started operations in India. GameTech decides to delay its entry to India and to closely
observe Techtoy’s operations in India. What is the possible rationale behind this delaying
decision?
146) A customer survey at a mall revealed that Zoe is considered to be an early adopter. What
does this mean?