BADM 320 Exam 3 – Business Administration Study Guide, Key Concepts and
Practice Review
fashion cycle - ANS ✔✔trends change, what is cool (why do firms develop new products)
changing customer needs - ANS ✔✔macro-factors - technology changes, we need apps for our
phones, online courses to learn UIUC classes (why do firms develop new products)
market saturation - ANS ✔✔develop new products to sell different products and services to
customers with different needs (why do firms develop new products)
managing risk - ANS ✔✔creating more products just in case one of them tanks (why do firms
develop new products)
is it real - ANS ✔✔something we could actually do
can we win - ANS ✔✔will the product be profitable in some way
is it worth doing - ANS ✔✔will the product actually add value to the firm
innovators - ANS ✔✔2.5% of customers, want to be the very first person to obtain the product,
risky
early adopters - ANS ✔✔13.5% of customers, they take less risk, wait a bit before purchasing
product
early majority - ANS ✔✔34% of customers, this group makes products become profitable
, late majority - ANS ✔✔34% of customers, still buy the product but its after the popularity
laggards - ANS ✔✔16% of customers may never adopt the innovation
relative advantage - ANS ✔✔if the product performs better than the previous product, it will be
perceived better
compatibility - ANS ✔✔does the product fit in the environment
observability - ANS ✔✔if it is easy for consumers to see and notice the difference than the
innovation will be accepted faster (HDTV)
complexity and trialability - ANS ✔✔innovation is hard to explain then its hard to accept. Wii
Sports worked well
market leader - ANS ✔✔firm with largest market share (coke)
market challenger - ANS ✔✔the #2 firm (Pepsi)
market follower - ANS ✔✔just trying to keep their market share and not cause any problems
market nicher - ANS ✔✔focuses on a small niche market that others are skipping over (Red Bull)
product orientation - ANS ✔✔no customer centric or competition centric firm
customer orientation - ANS ✔✔customer centric firm, not competition centric
Practice Review
fashion cycle - ANS ✔✔trends change, what is cool (why do firms develop new products)
changing customer needs - ANS ✔✔macro-factors - technology changes, we need apps for our
phones, online courses to learn UIUC classes (why do firms develop new products)
market saturation - ANS ✔✔develop new products to sell different products and services to
customers with different needs (why do firms develop new products)
managing risk - ANS ✔✔creating more products just in case one of them tanks (why do firms
develop new products)
is it real - ANS ✔✔something we could actually do
can we win - ANS ✔✔will the product be profitable in some way
is it worth doing - ANS ✔✔will the product actually add value to the firm
innovators - ANS ✔✔2.5% of customers, want to be the very first person to obtain the product,
risky
early adopters - ANS ✔✔13.5% of customers, they take less risk, wait a bit before purchasing
product
early majority - ANS ✔✔34% of customers, this group makes products become profitable
, late majority - ANS ✔✔34% of customers, still buy the product but its after the popularity
laggards - ANS ✔✔16% of customers may never adopt the innovation
relative advantage - ANS ✔✔if the product performs better than the previous product, it will be
perceived better
compatibility - ANS ✔✔does the product fit in the environment
observability - ANS ✔✔if it is easy for consumers to see and notice the difference than the
innovation will be accepted faster (HDTV)
complexity and trialability - ANS ✔✔innovation is hard to explain then its hard to accept. Wii
Sports worked well
market leader - ANS ✔✔firm with largest market share (coke)
market challenger - ANS ✔✔the #2 firm (Pepsi)
market follower - ANS ✔✔just trying to keep their market share and not cause any problems
market nicher - ANS ✔✔focuses on a small niche market that others are skipping over (Red Bull)
product orientation - ANS ✔✔no customer centric or competition centric firm
customer orientation - ANS ✔✔customer centric firm, not competition centric
