BADM 320 Exam 3 – Study Guide, Key Concepts & Practice Questions Review
New to the firm products - correct answer ✔✔x-box when Microsoft first introduced it
additions to existing product lines - correct answer ✔✔cocoa Krispies with marshmallows
improvements of existing products - correct answer ✔✔now with more Vitamin D
repositioning - correct answer ✔✔head&shoulders- not just for dandruff now
cost reductions - correct answer ✔✔cheaper versions of the originals. instead of defenders
movie ($150M) develop a bunch of netflix series for less
fashion cycle - correct answer ✔✔trends change, what is cool, where are things going?
-Zombie movies, vampire movies
-filming multiple movies at the same time
changing customer needs - correct answer ✔✔macro-factors- technology changes, we need
apps for our phones, online curses to learn UIUC classes abroad
market saturation - correct answer ✔✔we can only sell lunch to people once a day, develop
new products to sell different products and services to customers, McDonald's sells breakfast
managing risk (with portfolio diversity) - correct answer ✔✔more products so if one tanks we
do not go out of business
-spread out financial risk of firm
,internal research and development - correct answer ✔✔we come up with our own new product
-apple
-gillette
research and design group or consortium - correct answer ✔✔groups of different researchers
working together on various R&D
licensing - correct answer ✔✔find successful products and sell them
-coke wanted to grow so licenses Dr. Pepper internationally
brainstorming - correct answer ✔✔get together and come together with ideas
competitors' products - correct answer ✔✔we see what competitors do and mimic it
-Big Mac= Big King
-Spirit airlines charges for carry ons so allegiant followed
customer input - correct answer ✔✔best one, customers tell you what they want/need
idea screening - correct answer ✔✔identifying new ideas that would be good for the firm or
which ideas to drop
R-W-W framework - correct answer ✔✔-is it real?
>is this something we can actually do?
-can we win?
>can we make money?
-is it worth doing?
>is the product going to add some form of value to the firm?
,diffusion of innovation - correct answer ✔✔relates to the process where the use of an
innovation spreads throughout the marketplace, over time and across various categories of
adopters
-helps identify target markets, when to target them, and how
innovators - correct answer ✔✔-2.5%
-want to be the very first person to obtain the newest "widget", they would wait in line for week
at the apple store for newest iPhone
-willing to take the risk
-well-educated in the product area
-original promoters and users of the product, vital to success
early adopters - correct answer ✔✔-13.5%
-they take less risk than innovators, wait to see if the product works, goes to see the movie after
some reviews have been printed
-opinion leaders because they are closer to normal people
early majority - correct answer ✔✔-34%
-the group that makes products become profitable, without the EM it is highly unlikely products
will be a success
-wait to make sure the product is perfected
-this is when you find the largest amount of competitors as the market is peaking at this time
-other variations of the product come out
late majority - correct answer ✔✔-34%
-consumers that still buy the new product, however it is usually after the product has run most
of its industry/product life cycle
, -watching movies on Hulu instead of the theater
laggards - correct answer ✔✔-16%
-they may never adopt the innovation
-tend to avoid change
-rely on traditional products until they are no longer available
how to use the diffusion of innovation theory - correct answer ✔✔-can be used to determine
which customers to focus on in order to get the product accepted
-can be used to predict who will buy the product
-how to price the new product together
-how to promote the product and where to sell it
factors affecting acceptance of innovation - correct answer ✔✔-relative advantage
-compatibility
-observability
-complexity and trialability
relative advantage - correct answer ✔✔if the product performs better than the previous
product or is perceived to be better, people will adapt more quickly
-DVD vs VHS tapes, the audio and visual is vastly superior
compatibility - correct answer ✔✔does the product fit in the environment where it will be sold,
mobile phones worked in north europe
-66 north winter coats work well in Iceland, but not Brazil
New to the firm products - correct answer ✔✔x-box when Microsoft first introduced it
additions to existing product lines - correct answer ✔✔cocoa Krispies with marshmallows
improvements of existing products - correct answer ✔✔now with more Vitamin D
repositioning - correct answer ✔✔head&shoulders- not just for dandruff now
cost reductions - correct answer ✔✔cheaper versions of the originals. instead of defenders
movie ($150M) develop a bunch of netflix series for less
fashion cycle - correct answer ✔✔trends change, what is cool, where are things going?
-Zombie movies, vampire movies
-filming multiple movies at the same time
changing customer needs - correct answer ✔✔macro-factors- technology changes, we need
apps for our phones, online curses to learn UIUC classes abroad
market saturation - correct answer ✔✔we can only sell lunch to people once a day, develop
new products to sell different products and services to customers, McDonald's sells breakfast
managing risk (with portfolio diversity) - correct answer ✔✔more products so if one tanks we
do not go out of business
-spread out financial risk of firm
,internal research and development - correct answer ✔✔we come up with our own new product
-apple
-gillette
research and design group or consortium - correct answer ✔✔groups of different researchers
working together on various R&D
licensing - correct answer ✔✔find successful products and sell them
-coke wanted to grow so licenses Dr. Pepper internationally
brainstorming - correct answer ✔✔get together and come together with ideas
competitors' products - correct answer ✔✔we see what competitors do and mimic it
-Big Mac= Big King
-Spirit airlines charges for carry ons so allegiant followed
customer input - correct answer ✔✔best one, customers tell you what they want/need
idea screening - correct answer ✔✔identifying new ideas that would be good for the firm or
which ideas to drop
R-W-W framework - correct answer ✔✔-is it real?
>is this something we can actually do?
-can we win?
>can we make money?
-is it worth doing?
>is the product going to add some form of value to the firm?
,diffusion of innovation - correct answer ✔✔relates to the process where the use of an
innovation spreads throughout the marketplace, over time and across various categories of
adopters
-helps identify target markets, when to target them, and how
innovators - correct answer ✔✔-2.5%
-want to be the very first person to obtain the newest "widget", they would wait in line for week
at the apple store for newest iPhone
-willing to take the risk
-well-educated in the product area
-original promoters and users of the product, vital to success
early adopters - correct answer ✔✔-13.5%
-they take less risk than innovators, wait to see if the product works, goes to see the movie after
some reviews have been printed
-opinion leaders because they are closer to normal people
early majority - correct answer ✔✔-34%
-the group that makes products become profitable, without the EM it is highly unlikely products
will be a success
-wait to make sure the product is perfected
-this is when you find the largest amount of competitors as the market is peaking at this time
-other variations of the product come out
late majority - correct answer ✔✔-34%
-consumers that still buy the new product, however it is usually after the product has run most
of its industry/product life cycle
, -watching movies on Hulu instead of the theater
laggards - correct answer ✔✔-16%
-they may never adopt the innovation
-tend to avoid change
-rely on traditional products until they are no longer available
how to use the diffusion of innovation theory - correct answer ✔✔-can be used to determine
which customers to focus on in order to get the product accepted
-can be used to predict who will buy the product
-how to price the new product together
-how to promote the product and where to sell it
factors affecting acceptance of innovation - correct answer ✔✔-relative advantage
-compatibility
-observability
-complexity and trialability
relative advantage - correct answer ✔✔if the product performs better than the previous
product or is perceived to be better, people will adapt more quickly
-DVD vs VHS tapes, the audio and visual is vastly superior
compatibility - correct answer ✔✔does the product fit in the environment where it will be sold,
mobile phones worked in north europe
-66 north winter coats work well in Iceland, but not Brazil
