Deck 9: Marketing in a New Venture

Question 1

It is possible for an individual to be a laggard for one product and an early adopter for another product.

Answer 1

True

Question 2

To be successful in introducing a new product or service,an entrepreneur probably has to satisfy a market need better than competitors can.

Answer 2

True

Question 3

If an entrepreneurial firm gets its product to be accepted as the dominant design,that means its product is the very best one on the market.

Answer 3

False

Question 4

Which of the following is not a step in defining what consumers' real needs are?

A) Identifying any alternatives that might appear in the future.
B) Finding a solution to a problem.
C) Figuring out a problem.
D) Understanding how to satisfy the need.
E) Begin to advertise the new product.

Question 5

Entrepreneurs are most successful when they start a company that meets a real need.

Question 6

Product improvements are a function of time,not effort.

Question 7

A stagnant market would offer more advantages to a new entrepreneur than would a growing market.

Question 8

For which of the following products would an entrepreneur have a more difficult time obtaining target market information?

A) Video games.
B) Ceiling fans.
C) Home decorations.
D) Internet-based auction for homes.
E) Floral bouquets.

Question 9

It is easier to gather information from customers in a new target market than it is from well-established target markets.

Question 10

The first step to starting a new business is to find a solution to a problem that potential customers do not even know they have.

Question 11

From a marketing perspective,the first step to becoming a successful entrepreneur is defining what customers need.

Question 12

In most markets,the innovators and early adopters are probably too small of a group to allow a new product or service to be financially successful.

Question 13

Which of the following is the weakest example of a product fulfilling a real need?

A) A drug that cures lung cancer.
B) A software program that is much better than anything else on the market.
C) A TV/VCR combo.
D) Multi-color laundry baskets.
E) None of the Above.

Question 14

Established businesses tend to not compete with new products or services on the early part of the S curve.

Question 15

Choosing the right customers is one of the toughest challenges for a new business.

Question 16

Entrepreneurs will have more success offering new products and services to existing markets using known solutions.

Question 17

Established firms will be at an advantage when offering products into existing markets where the customer problem and solution are known.

Question 18

Once a dominant design has been established in an industry,new companies have an advantage over established companies.

Question 19

The adoption of products always forms a normal distribution pattern.

Question 20

One challenge that entrepreneurs face in starting a new business is that they tend to focus on a product that they really like rather than find out what potential customers really want.

Question 21

Which of the following would help an entrepreneur get his or her new product as the technical standard?

A) Building relationships with the producers of complimentary products.
B) Lowering the price when the new product is introduced.
C) Get to the market quickly rather than getting to the market with the best product.
D) All of the above are correct (a, b, and c).
E) None of the above.

Question 22

Suppose you are an entrepreneur and you sell TV's. When you first entered the market,TV's were in black and white and innovations were very slow. After about five years of time,TV innovations became more frequent with color,picture in picture,and TV/VCR combos. However,after about 10 more years,the innovations decreased again. This market behavior is known as what?

A) The product development S-curve.
B) Product Cycle.
C) Improvement Curve.
D) Feature Cycle.
E) All of the Above.

Question 23

A new product was released by Vazco which made packing for trips more efficient.By using Vazco's new vacuum bags,travelers can now decrease the amount of space their belongings usually take up and pack more in one suitcase. A way to get consumers to move from early adopter to early majority is by

A) being patient and letting the market work naturally.
B) focusing on one target market, perhaps business workers only.
C) express the solution to the customer's problem clearly.
D) constantly marketing the product to any and all potential consumer groups.
E) Both B and C.

Question 24

Which type of cost becomes less per unit as the entrepreneur produces more of a product?

A) Fixed cost.
B) Variable cost.
C) Hidden cost.
D) Costs of substitutes and complements.
E) All of the above.

Question 25

Which of the following might suggest that an established firm chooses to improve its current products rather than adopt a new product?

A) Technology and investments.
B) New products generally begin with inferior performance to their existing products.
C) Managers believe that by improving current products, they will compete with entrepreneur's new products.
D) Human resource investments.
E) All of the Above.

Question 26

Approximately 68% of product users fall into which categories?

A) Early Adopters and Early Majority.
B) Early Majority and Late Majority.
C) Innovators, Early Adopters, and Laggards.
D) Late Majority and Laggards.
E) Innovators and Laggards.

Question 27

Which of the following classifications of customers is probably least sensitive to the price of the product?

A) Innovators.
B) Early Adopters.
C) Early Majority.
D) Late Majority.
E) Laggards.

Question 28

Which of the following statements,addressing the adoption of new products,is not true?

A) Most customers adopt new products in the middle of the adoption cycle.
B) Different groups adopt products for different reasons.
C) Early adopters tend to buy the product before any marketing has occurs.
D) Few customers buy at the beginning or end of the cycle.
E) None of the Above.

Question 29

Making the transition from early adopters to early majority is usually called

A) walking the bridge.
B) crossing over.
C) market jump.
D) market transition.
E) crossing the chasm.

Question 30

Which of the following is important to know as an entrepreneur before entering the diamond ring market?

A) The demand for diamond rings has more than doubled this past year.
B) Last year, the diamond revenues totaled $400 billion in the United States alone.
C) Demands are increasing for new and unique styles.
D) There are approximately 80,000 vendors of diamonds in the United States.
E) All of the Above

Question 31

To which customer groups does the entrepreneur have trouble selling enough to make the business worthwhile?

A) Innovators and Early Majority
B) Early Majority and Late Majority
C) Innovators and Early Adopters
D) Early Adopters and Late Majority
E) None of the Above

Question 32

Which of the following statements is least true about an entrepreneurial situation?

A) It is important to gather and analyze information from customers before launching a new product.
B) Entrepreneurs are better off targeting established markets rather than new markets because it is difficult to predict the needs of new markets.
C) Entrepreneurs can design products that will have high appeal to potential customers through conjoint analysis.
D) Entrepreneurs assess customer preferences different when markets are new than when they were already established.
E) None of the Above

Question 33

Which group of adopters base buying decisions on intuition about the value of new products and do not require much information to make purchasing decisions?

A) Middle Majority.
B) Early Adopters.
C) Early Majority.
D) Late Majority.
E) Laggards.

Question 34

Assume that for local telephone calls,one pays the same rate each month. However,for long distance telephone phone calls,the costs depend on how many long distance calls were made,what time of day they were made,and the length of each call. What type of costs are the long distance calls to the consumer?

A) Fixed.
B) Variable.
C) Standard.
D) Hidden.
E) Dependent.

Question 35

A Shelter Insurance Agent tends to do a majority of his marketing through customer meetings. This is an example of which form of marketing?

A) S curve selling.
B) Personal selling.
C) Informal selling.
D) Indirect.
E) None of the Above.

Question 36

In which of the following situations would an entrepreneur have the best advantage?

A) When the solution to customers' needs is novel.
B) When the solution to customers' needs is established.
C) When the market is well established.
D) Existing markets.
E) When there are known solutions to customers' problems.

Question 37

Which of the following is an example of a complimentary products?

A) Beef and chicken.
B) Personal computers and laptops.
C) CD players and cassette players.
D) Coffee and coffee filters.
E) Choices A, B, and C are all correct..

Question 38

AT&T originally required special phone jacks to be installed in each customer's house. After the Carterfone Law was passed,all telephone companies had to use standard jacks like AT&T's. This market structure is known as

A) Technical Standard.
B) Dominant Design.
C) Standard Feature.
D) Carterfone Structure.
E) None of the Above.

Question 39

An entrepreneur is working to develop a new video game. Preliminary information suggests that consumers are concerned about the quality of the graphics,the extra features of the game,and the price,but it is not known which is the most important relative to the others. Research is set up in which copies of the same game,varying with different combinations of graphics,features,and price,are presented to potential consumers . Potential consumers are asked to indicate which copy of the game they prefer. This is an example of using

A) The S Curve.
B) Conjoint Analysis.
C) Detail Analysis.
D) Core Rigidities.
E) Feature Surveys.

Question 40

Which classification of product adopters are not comfortable with new products and will wait for the product to become well-established before purchasing it? Moreover,only when they are shown that the value outweighs the costs do they adopt the product.

A) Innovators.
B) Early Adopters.
C) Early Majority.
D) Late Majority.
E) None of the above.

Question 41

It usually is suggested that to be successful,a business should stay close to its customers;to focus on their needs. Is it possible for a business to stay too close to its customers? Explain why it might cause serious problems for a business if it does focus closely on its customers.

Question 42

Approximately five years ago,there were several e-businesses set up to fill orders for prescription drugs by use of the Internet and a delivery service. At the time,many people thought that these e-businesses would be major competitors to regular drug stores. That did not happen. What was a likely reason?

A) No products can be sold successfully over the Internet.
B) The e-businesses experienced core rigidities.
C) There probably was not a real consumer need for this type of service.
D) The S Curve.
E) The late majority group of consumers.

Question 43

An established business is thinking about introducing a new service and asks current customers for their views of the intended new service. The current customers report that they do not like the new service,primarily because they tend to interpret it from the perspective of the current service. This represent the idea of

A) user myopia.
B) factorial design..
C) S curve analysis.
D) conjoint analysis.
E) policy capturing.

Question 44

You are listening to the radio while you are driving your car to school one morning. You are already late and did not have time for breakfast,so you are hungry. You hear the music on the radio and several commercials. One commercial for a new type of energy bar seems to catch your attention. Which of the following terms suggests why that particular commercial might have caught your attention?

A) Perceptual mapping.
B) Context.
C) Expensive.
D) Late adopter.
E) None of the above.

Question 45

When entrepreneurs successfully move from selling to the early adopters to the early majority,they are said to be

A) moving to fixed costs.
B) conducting perceptual mapping.
C) crossing the chasm.
D) doing the S curve.
E) None of the above.

Question 46

Which of the following tends to represent a disadvantage for existing established companies when attempting to create new products?

A) Focused on current customers.
B) Core rigidities.
C) Tyranny of the current market.
D) User myopia.
E) All of the above are correct responses.

Question 47

Identify and explain an example using the product development S-curve?

Question 48

Which of the following groups of customers tend to be most cautious in buying a new product or service?

A) Innovators.
B) Early adopters.
C) Early majority.
D) Late majority.
E) None of these.

Question 49

What are three reasons why entrepreneurs fail to obtain information from customers?

Question 50

The authors of the textbook said that entrepreneurs who sell only to innovators and early adopters probably will not succeed. Explain why this might be true.

Question 51

What are the three disadvantages that existing companies have when serving new markets with novel solutions to customers' needs? Please explain each disadvantage.

Question 52

According to the authors of the textbook,which of the following is the first thing an entrepreneur needs to do when deciding to start a new business?

A) Design the package for the new product.
B) Make sure there is a real need for the new product.
C) Start advertising before the product is designed.
D) Decide the salary to be paid to people in the business.
E) Decide how many people to hire for the business.

Question 53

In setting the price on a new product,an entrepreneur bases the price on the amount of money used to produce the product. This is known as

A) variable cost.
B) fixed cost.
C) cost-based pricing.
D) intangible monetary approach.
E) conjoint costing.

Question 54

The idea that an existing company might have a difficult time developing a new product for a new market because it listens closely to current customers is known as

A) conjoint analysis.
B) policy capturing.
C) tyranny of the current market.
D) first mover advantage.
E) the S curve.

Question 55

Which of the following normally are associated with fixed costs?

A) Building.
B) Raw materials used to make a product.
C) Sales person's commission.
D) Shipping costs of a product.
E) All of the above are associated with fixed costs.

Question 56

When personal computers were beginning to be widely used,there were several operating systems that were being used on different kinds of computers;Microsoft used MS DOS,then an expanded version which include Windows,Apple used OS2,etc. Obviously,the Microsoft software became the "industry standard." This represents which concept named below?

A) Radical breakthroughs.
B) The S Curve.
C) The Early Adopters.
D) Technical Standard.
E) Core Rigidities.