Deck 3: Technology Adoption and Diffusion

Question 1

Early adopters are usually the first to enter a market for a new product.

Answer 1

False

Question 2

The early majority typically adopt a new technology product slightly before the average for the market.

Answer 2

True

Question 3

The late majority usually adopt a product because they have no alternatives.

Answer 3

False

Question 4

The normal distribution of adopters translates into an S-shaped pattern of demand growth over time because the bell curve shows the rate of adoption while the S-shaped curve shows the cumulative adoption.

Question 5

The take-off area or chasm in adoption of a new product is located between the innovators and the early adopters.

Question 6

When crossing the chasm, you will need to focus on a vertical marketing strategy as compared to a horizontal marketing strategy.

Question 7

A beachhead strategy is usually most appropriate after a company has successfully crossed the chasm.

Question 8

One of the reasons why it is difficult to forecast demand is that demand is linear over time.

Question 9

If there are many innovators and few imitators, the resulting diffusion pattern looks more convex than S-shaped.

Question 10

According to the bass diffusion model, if the rate of adoption by innovators was 0.20, and the rate of adoption by imitators was 0.50, the market size is 20 million and the cumulative number of adopters of the product was 10 million, the number of adopters in the year would be 4.5 million.

Question 11

The accuracy of the Bass model is much greater when economic shocks are occurring.

Question 12

The first step in completing the Delphi technique is picking an appropriate facilitator.

Question 13

The amount of learning necessary to understand the benefits of a product will slow its rate of diffusion because people must understand the value of new products and services to adopt them.

Question 14

When one technology is replaced by another that can achieve the same objective, the replacing technology is known as a compliment.

Question 15

One reason why a substitution-based technology strategy is difficult to implement is that substitution is typically complete.

Question 16

Without accurate estimates of the time horizon of substitution, it is virtually impossible to balance supply and demand for products based on the new technology.

Question 17

What needs to be accomplished to formulate an effective technology strategy?

A) understand the patterns of technology diffusion and customer adoption
B) follow particular strategies to transition from innovators to the majority of the market
C) accurately forecast the growth of demand for your products and services
D) all of the above are required

Question 18

Most patterns of customer adoption of new technology follow which pattern?

A) positively skewed
B) negatively skewed
C) normally distributed
D) leptokurtic

Question 19

Which group of adopters comes first?

A) early adopters
B) early majority
C) laggards
D) innovators

Question 20

Which group of adopters follows the late majority?

A) innovators
B) early adopters
C) early majority
D) laggards

Question 21

Which group of adopters is typically between one and two standard deviations before the mean?

A) innovators
B) early adopters
C) early majority
D) laggards

Question 22

Which group of adopters is most likely to be intrigued by technology and eager to explore it?

A) innovators
B) early adopters
C) early majority
D) late majority

Question 23

Which portion of the market is most likely willing to pay a lot of money for new technology products and services?

A) early adopters
B) early majority
C) innovators
D) laggards

Question 24

As a group, what is the relative size of early adopters?

A) smaller than innovators
B) larger than innovators
C) about the same as innovators
D) depends on the product

Question 25

Being successful with which group is an indication that the product will be successful with the majority of the market?

A) innovators
B) early majority
C) early adopters
D) late majority

Question 26

Which segment of the market tends to adopt a new technology product slightly before the average for the market?

A) innovators
B) early adopters
C) early majority
D) late majority

Question 27

Which segment of the market comes before the average of the market and is most likely to want to see a whole product solution and a value proposition before buying?

A) innovators
B) early adopters
C) laggards
D) early majority

Question 28

Which segment of the market tends to adopt technology only after strong evidence shows that the value of adoption is greater than the cost of adoption and that other customers have adopted the technology successfully?

A) innovators
B) late majority
C) early majority
D) early adopters

Question 29

For which segment of the market would it be most important to develop an advertising message emphasizing the reliability and low cost of the product?

A) innovators
B) early majority
C) late majority
D) laggards

Question 30

Individuals in which group will often only adopt a product when the alternatives to adoption are no longer available?

A) laggards
B) late majority
C) early majority
D) early adopters

Question 31

Why is understanding the typical pattern of adoption of new products and services important?

A) different groups of customers adopt new products at basically the same time
B) the distribution provides important information about the right promotional strategy
C) indicates that a constant pricing strategy can be utilized
D) helps to estimate supply growth over time

Question 32

Which segment of the market would be least sensitive to the price of your product?

A) innovators
B) early majority
C) late majority
D) laggards

Question 33

How is the S-shaped cumulative adoption curve created?

A) first derivative of the bell curve
B) second derivative of the bell curve
C) integral of the bell curve
D) the bell curve and S-shaped curve are identical

Question 34

What can be told about the financial attractiveness of a market by examining the cumulative adoption S-curve?

A) in the first stage of the product life cycle, revenues are high and costs are low, making profits high
B) in the second stage revenues are rising faster than costs and profit margins increase
C) in the third stage revenues and costs fall leading to increased profit
D) in the third stage revenues increase faster than costs leading to increase profits

Question 35

What is most likely to be occurring if new customers are focused on the value proposition from purchasing your product or service or care a lot about ancillary attributes of your product package?

A) you are entering the early innovation stage
B) you are reaching the take-off stage
C) you are entering the decline stage
D) it is impossible to tell

Question 36

As discussed by Geoffrey Moore, where is the chasm located?

A) between innovators and early adopters
B) between early adopters and early majority
C) between early majority and late majority
D) between late majority and laggards

Question 37

What type of marketing strategy involves focusing on customers in a single industry?

A) vertical
B) horizontal
C) integrative
D) specialized

Question 38

What type of marketing strategy involves serving customers in multiple industries at the same time?

A) vertical
B) horizontal
C) integrative
D) specialized

Question 39

Why is it important to estimate the demand for your new products or services?

A) helps you to avoid underproduction
B) helps to project future costs in business based on economies of scale
C) helps to determine payback on your investment
D) all of the above are important

Question 40

What term refers to the rate at which a new technology product becomes adopted by potential users?

A) innovation
B) dispersion
C) diffusion
D) integration

Question 41

Which of the following are customers who learn about new products from sources other than previous users?

A) adopters
B) laggards
C) innovators
D) imitators

Question 42

Which of the following are customers who learn about new products from previous users?

A) adopters
B) laggards
C) innovators
D) imitators

Question 43

The distribution of innovators and imitators generally result in a dispersion curve with the following shape.

A) normally distributed
B) positively skewed
C) leptokurtic
D) S-shaped

Question 44

What shape will a diffusion pattern look like if there are many innovators and few imitators?

A) S-shaped
B) concave
C) convex
D) normally distributed

Question 45

What is the most likely shape of the diffusion pattern for cable television?

A) S-shaped
B) concave
C) convex
D) normally distributed

Question 46

What is the most likely shape of the diffusion pattern for CT scanners?

A) S-shaped
B) concave
C) convex
D) normally distributed

Question 47

What is the most common method to determining the size of the market for new products?

A) diffusion curves
B) Bass model
C) Delphi technique
D) looking up the size of a similar market and using those number to estimate the size of the target model

Question 48

What is the least accurate method of determining the size of the market for new products?

A) diffusion curves
B) Bass model
C) Delphi technique
D) looking up the size of a similar market and using those numbers to estimate the size of the target market

Question 49

Which of the following would be considered a quantitative method for determining the size of the market for new products?

A) Delphi technique
B) Bass model
C) focus groups
D) looking up the size of a similar market and using those numbers to estimate the size of the target market

Question 50

Which model for estimating the demand of a new market predicts diffusion patterns as a function of the size of the market, the rate of adoption by innovators and imitators, and the proportion of adopters in the previous time period?

A) Delphi technique
B) Bass model
C) product diffusion models
D) looking up the size of a similar market and using those numbers to estimate the size of the target market

Question 51

According to the Bass diffusion model, what would the number of adopters in the year be if the rate of adoption by innovators is 0.10 and the rate of adoption by imitators is 0.50, the market size is 20 million, and no one has yet adopted the product?

A) 500,000 customers
B) 1,000,000 customers
C) 2,000,000 customers
D) 5,000,000 customers

Question 52

According to the Bass diffusion model, what would the number of adopters in the year be if the rate of adoption by innovators is 0.10 and the rate of adoption by imitators is 0.50, the market size is 20 million, and 5 million customers have adopted the product?

A) 375,000 customers
B) 1,500,000 customers
C) 2,500,000 customers
D) 3,375,000, customers

Question 53

Which of the following is not a limitation with the Bass diffusion model?

A) the accuracy of the model declines as you get further away in time from the initial adoption point
B) the accuracy of the model is much lower when competing technologies are being introduced
C) the model assumes that the diffusion of a technology product depends on only supply-side factors
D) the accuracy of the model is much lower when economic shocks are occurring

Question 54

For which product would the Bass model be most accurate?

A) automobiles
B) homes
C) planes
D) washing machines

Question 55

What is the first step when conducting the Delphi Technique?

A) identify an expert group
B) pick a facilitator
C) create an initial list of criteria
D) identify preferences and constraints

Question 56

When conducting the Delphi Technique, what should be completed immediately after you have the experts rank criteria?

A) estimate the mean and standard deviation
B) have panel re-rank the newly ordered criteria
C) analyze the results and return them to the panel
D) repeat the ranking process until stability in the rankings is achieved

Question 57

Which of the following is not a weakness associated with the Delphi Technique?

A) the method is sensitive to the precision of the questions that you ask
B) the method is sensitive to variance in the expertise of the respondents
C) the method is not useful in a variety of settings
D) the validity of the technique is limited by the intervention of unexpected events

Question 58

Why is it difficult to formulate a strategy that incorporates the value of substitutions?

A) substitution is not affected by political actions
B) new companies usually have an advantage in the real of political power
C) substitution typically takes the same time in different industries
D) substitution is typically only partial

Question 59

For which products did it take the longest time to reach 90 percent substitution?

A) plastic/natural leather
B) animal/detergent soap
C) organic/inorganic pesticides
D) synthetic/natural rubber

Question 60

For which products did it take the shortest time to reach 90 percent substitution?

A) plastic/natural leather
B) animal/detergent soap
C) organic/inorganic pesticides
D) synthetic/natural rubber

Question 61

By forecasting technology evolution, you can develop a strategy that considers:

A) the emergence of technologies
B) changes in the dominant strategies and structures of other firms
C) shifts in the nature of competition between firms
D) all of the above

Question 62

Discuss the various groups in the different sections of the adoption bell curve. Also, explain how the adoption bell curve can be transferred into an S-shaped curve.

Question 63

Explain what is meant by "crossing the chasm." Also, discuss how the chasm can best be crossed.
(Medium; pp. 52-55;

Question 64

Discuss how the Bass diffusion model can be used to estimate demand. What are the limitations to using the model?

Question 65

Outline the process used to use the Delphi Technique. What are the limitations to using the model?
(Easy; pp. 61-62;

Question 66

Explain the importance to understanding both complementary and substitute products when the diffusion of new products and services.
(Medium; pp. 63-66;