Consumer Behavior, 10e (Schiffman/Kanuk) Chapter 14 Consumers and the Diffusion of Innovations 1) is a macro process concerned with the spread of a new product from its source to the consuming public A) Adoption B) Assumption C) Diffusion D) Innovation E) Introduction Answer: C Diff: Page Ref: 432 AACSB: Analytic Skills Skill: Concept Objective: 14.1: Understand the twofold process of the spread and acceptance of innovative products and services within a social system 2) The process of is concerned with how innovations spread A) innovation B) adoption C) success D) diffusion E) influence Answer: D Diff: Page Ref: 432 Skill: Concept Objective: 14.1: Understand the twofold process of the spread and acceptance of innovative products and services within a social system 3) is a micro process that focuses on the stages through which an individual consumer passes when deciding to accept or reject a new product A) Adoption B) Assumption C) Diffusion D) Innovation E) Introduction Answer: A Diff: Page Ref: 432 AACSB: Analytic Skills Skill: Concept Objective: 14.1: Understand the twofold process of the spread and acceptance of innovative products and services within a social system ScholarStock 4) The first people to purchase a new product are considered A) consumer innovators B) nonadopters C) laggards D) trial drivers E) test consumers Answer: A Diff: Page Ref: 432 Skill: Concept Objective: 14.1: Understand the twofold process of the spread and acceptance of innovative products and services within a social system 5) A approach to defining innovation treats newness from the perspective of the company producing or marketing it A) product-oriented B) market-oriented C) consumer-oriented D) firm-oriented E) development-oriented Answer: D Diff: Page Ref: 433 Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 6) Under the approach to defining innovation, copies or modifications of a competitor's product would qualify as new A) product-oriented B) market-oriented C) consumer-oriented D) firm-oriented E) development-oriented Answer: D Diff: Page Ref: 433 AACSB: Reflective Thinking Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system ScholarStock 7) A approach to defining innovation focuses on the features inherent in the product itself and on the effects these features are likely to have on consumers' established usage patterns A) product-oriented B) market-oriented C) consumer-oriented D) firm-oriented E) development-oriented Answer: A Diff: Page Ref: 433 AACSB: Analytic Skills Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 8) A involves the introduction of a modified product rather than a totally new product, and has the least disruptive influence on established patterns A) discontinuous innovation B) dynamically discontinuous innovation C) dynamically continuous innovation D) statically continuous innovation E) continuous innovation Answer: E Diff: Page Ref: 433 AACSB: Analytic Skills Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 9) The Gillette Fusion razor blade, which has four blades instead of three or two, is best described as a A) discontinuous innovation B) dynamically discontinuous innovation C) dynamically continuous innovation D) statically continuous innovation E) continuous innovation Answer: E Diff: Page Ref: 433 AACSB: Analytic Skills Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system ScholarStock 10) A is somewhat disruptive to consumers but does not alter established behavior patterns A) discontinuous innovation B) dynamically discontinuous innovation C) dynamically continuous innovation D) statically continuous innovation E) continuous innovation Answer: C Diff: Page Ref: 433 AACSB: Analytic Skills Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 11) Digital cameras and digital video recorders were somewhat disruptive to consumers, but did not change the basic behavior patterns established with photography and film These are best described as A) discontinuous innovations B) dynamically discontinuous innovations C) dynamically continuous innovations D) statically continuous innovations E) continuous innovations Answer: C Diff: Page Ref: 433 AACSB: Analytic Skills Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 12) Communication among consumers is known as A) word-of-mouth communications B) surrogacy C) mavenship D) cohort selling E) peer advertising Answer: A Diff: Page Ref: 437 Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system ScholarStock 13) A requires consumers to adopt new behavior patterns A) discontinuous innovation B) dynamically discontinuous innovation C) dynamically continuous innovation D) statically continuous innovation E) continuous innovation Answer: A Diff: Page Ref: 433 AACSB: Analytic Skills Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 14) The automobile, which revolutionized the way people got from one place to the other, was an example of a A) discontinuous innovation B) dynamically discontinuous innovation C) dynamically continuous innovation D) statically continuous innovation E) continuous innovation Answer: A Diff: Page Ref: 433 AACSB: Analytic Skills Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 15) A approach to defining innovation judges the newness of a product in terms of how much exposure consumers have to the new product A) product-oriented B) market-oriented C) consumer-oriented D) firm-oriented E) development-oriented Answer: B Diff: Page Ref: 433 Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system ScholarStock 16) According to the approach to defining innovation, products are considered new if they have been purchased by a relatively small percentage of the potential market or if they have been on the market for a relatively short period of time A) product-oriented B) market-oriented C) consumer-oriented D) firm-oriented E) development-oriented Answer: B Diff: Page Ref: 433 Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 17) A approach to defining innovation considers a "new" product to be any product that potential consumers judge to be new A) product-oriented B) market-oriented C) consumer-oriented D) firm-oriented E) development-oriented Answer: C Diff: Page Ref: 433 Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 18) A consumer is being when he or she uses a previously adopted product in a novel or unusual way, or very extensively A) use innovative B) purchase innovative C) market innovative D) compatibly innovative E) incompatibly innovative Answer: A Diff: Page Ref: 434 Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system ScholarStock 19) While Q-tips are advertised for cleaning ears or removing eye make-up, Bill has found that they are also perfect for cleaning dust out of the crevices of his model cars Bill's use of Q-tips constitutes A) use innovativeness B) purchase innovativeness C) market innovativeness D) compatibly innovativeness E) incompatibly innovativeness Answer: A Diff: Page Ref: 434 Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 20) Fizzy Cola just came out with a cherry-flavored cola Fizzy Cherry is not the first cherryflavored cola on the market, but it is still considered to be new, based on a approach to defining innovation A) product-oriented B) market-oriented C) firm-oriented D) communications-oriented E) consumer-oriented Answer: C Diff: Page Ref: 433 AACSB: Reflective Thinking Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 21) Continuous innovation, dynamically continuous innovation, and discontinuous innovation are types of product innovations based on a definition of innovation A) product-oriented B) market-oriented C) firm-oriented D) communications-oriented E) consumer-oriented Answer: A Diff: Page Ref: 433 AACSB: Analytic Skills Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system ScholarStock 22) Hershey has traditionally made its Kisses from solid milk chocolate When Hershey came out with Kisses with almonds in them, this constituted A) discontinuous innovation B) circular innovation C) dynamically continuous innovation D) straight-line innovation E) continuous innovation Answer: E Diff: Page Ref: 433 Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 23) The development of MP3 players, when consumers were used to listening to their music on CD or cassette tape players, constitutes A) discontinuous innovation B) circular innovation C) dynamically continuous innovation D) straight-line innovation E) continuous innovation Answer: C Diff: Page Ref: 433 Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 24) The development of small cassette players that users could easily carry with them, instead of having to play their music on stationary pieces of equipment, constituted A) discontinuous innovation B) circular innovation C) dynamically continuous innovation D) straight-line innovation E) continuous innovation Answer: A Diff: Page Ref: 433 Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system ScholarStock 25) The degree to which potential customers perceive new product as superior to existing substitutes is its A) relative advantage B) compatibility C) complexity D) trialability E) observability Answer: A Diff: Page Ref: 435 AACSB: Analytic Skills Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 26) Although consumers can carry beepers so that their business offices or families can contact them, a cellular telephone enables users to be in nearly instant communication with the world and allows users to both receive and place calls This is known as the of cellular phones A) relative advantage B) compatibility C) complexity D) trialability E) observability Answer: A Diff: Page Ref: 435 Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 27) The degree to which potential consumers feel a new product is consistent with their present needs, values, and practices is a measure of its A) relative advantage B) compatibility C) complexity D) trialability E) observability Answer: B Diff: Page Ref: 435 Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system ScholarStock 28) Trying to market a depilatory cream to men as an alternative to shaving would be very difficult due to a lack of between the cream and men's existing shaving routines A) relative advantage B) compatibility C) complexity D) trialability E) observability Answer: B Diff: Page Ref: 435 Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 29) refers to the degree to which a new product is difficult to understand or use A) Relative advantage B) Compatibility C) Complexity D) Trialability E) Observability Answer: C Diff: Page Ref: 436 Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 30) is the most widespread concern of consumer innovators when it comes to innovation in high-tech consumer products A) Relative advantage B) Compatibility C) Complexity D) Trialability E) Observability Answer: C Diff: Page Ref: 436 AACSB: Reflective Thinking Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 10 ScholarStock COPY MINI CASE: Speedy Copy just opened a new store in South Hills Shopping Center The store offers copy, fax, and binding services, and sells related office supplies To encourage people to visit the store, Speedy Copy sends a flier to local homes and businesses with a coupon for using their services In an attempt to discourage similar stores from opening in the surrounding shopping centers, Speedy Copy has priced its services to be very inexpensive, in the hopes that increased consumer purchase volumes will balance out the store's decreased profit margin Ken works just down the street from South Hills Shopping Center and makes a point of visiting Speedy Copy on its opening day He finds the store to be understaffed and under equipped to meet his needs and sends an e-mail to his friends at work, telling them that the store isn't worth visiting 60) In the COPY MINI CASE, Speedy Copy's direct-mail campaign attempts to enhance in order to speed the diffusion of the use of its store A) relative advantage B) compatibility C) complexity D) trialability E) observability Answer: D Diff: Page Ref: 435 AACSB: Analytic Skills Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 61) In the COPY MINI CASE, Ken makes a point of trying the new store on its opening day This makes Ken a(n) A) innovator B) early adopter C) early majority D) late majority E) laggard Answer: A Diff: Page Ref: 441 Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 21 ScholarStock 62) At the end of the COPY MINI CASE, Ken has reached the stage of the adoption process A) awareness B) interest C) evaluation D) trial E) adoption/rejection Answer: E Diff: Page Ref: 446,Table 14.4 AACSB: Analytic Skills Skill: Application Objective: 14.3: Understand how individual consumers decide whether or not to try and adopt a particularly innovative product or service 63) In the COPY MINI CASE, given that there are other copy centers in the market, the South Hills Speedy Copy store is considered "new" based on a(n) definition of innovation A) product-oriented B) consumer-oriented C) market-oriented D) output-oriented E) firm-oriented Answer: E Diff: Page Ref: 433 AACSB: Analytic Skills Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 64) In the COPY MINI CASE, Speedy Copy is employing a(n) by offering very low prices to discourage market entry by competitive firms A) skimming policy B) crowding policy C) anticompetitive policy D) standardization policy E) penetration policy Answer: E Diff: Page Ref: 444 AACSB: Analytic Skills Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 22 ScholarStock CAR MINI CASE: Marksman Motors is a manufacturer of SUVs In order to encourage consumers to consider a Marksman vehicle, Marksman dealerships offer an overnight test-drive, where consumers are able to drive the car for 24 hours to see if they like it They have found the overnight test-drive to be especially popular with people who tend to adopt new ideas just after the average time and who approach innovations cautiously Recently, in response to the popularity of other manufacturers' gas-electric hybrid SUVs, Marksman Motors has come out with a new model, the Evergreen, that has been sold in Germany for a year, but is the first gaselectric hybrid SUV to hit the U.S market In order to promote the Evergreen, the manufacturer sent a voucher to Car and Driver Magazine subscribers for a free 3-day test-drive of the Evergreen, to be used at local Marksman dealerships 65) In the CAR MINI CASE, the overnight test-drive is designed to encourage consumers to reach the stage of the adoption process A) awareness B) interest C) evaluation D) trial E) adoption/rejection Answer: D Diff: Page Ref: 446, Table 14.4 Skill: Application Objective: 14.3: Understand how individual consumers decide whether or not to try and adopt a particularly innovative product or service 66) In the CAR MINI CASE, the overnight test-drive is especially popular with members of the adopter category A) innovator B) early adopter C) early majority D) late majority E) laggard Answer: D Diff: Page Ref: 442 AACSB: Reflective Thinking Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 23 ScholarStock 67) In the CAR MINI CASE, the Evergreen's gas-electric hybrid motor is considered a A) continuous innovation B) circular innovation C) dynamically continuous innovation D) direct innovation E) discontinuous innovation Answer: A Diff: Page Ref: 433 AACSB: Analytic Skills Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 68) In the CAR MINI CASE, by sending a voucher specifically to Car and Driver subscribers, Marksman Motors is trying to get to try the Evergreen A) market mavens B) laggards C) consumer innovators D) viral marketers E) surrogate buyers Answer: C Diff: Page Ref: 452 Skill: Application Objective: 14.4: Understand the personal characteristics of innovators 69) In the CAR MINI CASE, the Evergreen is considered a "new" product based on a(n) definition of product innovation A) firm-oriented B) product-oriented C) market-oriented D) adoption-oriented E) consumption-oriented Answer: A Diff: Page Ref: 432 Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 24 ScholarStock TABLE MINI CASE: Cynthia recently saw a new coffee table being offered by a popular furniture designer She thinks the table would go nicely in her living room Her friend, Steve, has very tasteful furniture in his home and seems to know quite a bit about furniture, so Cynthia asks Steve for advice about whether the coffee table would match the other design elements in her living room Cynthia spends about three weeks thinking about it before she makes the decision to buy the table 70) In the TABLE MINI CASE, when Cynthia first sees the new coffee table, she is at the stage of the adoption process A) awareness B) interest C) evaluation D) trial E) adoption/rejection Answer: A Diff: Page Ref: 446, Table 14.4 Skill: Application Objective: 14.3: Understand how individual consumers decide whether or not to try and adopt a particularly innovative product or service 71) In the TABLE MINI CASE, when Cynthia thinks the table would go nicely in her living room and seeks Steve's opinion, she is at the stage of the adoption process A) awareness B) interest C) evaluation D) trial E) adoption/rejection Answer: B Diff: Page Ref: 446, Table 14.4 Skill: Application Objective: 14.3: Understand how individual consumers decide whether or not to try and adopt a particularly innovative product or service 72) In the TABLE MINI CASE, when Cynthia ultimately decides that she really likes the table and buys it, she is at the stage of the adoption process A) awareness B) interest C) evaluation D) trial E) adoption/rejection Answer: E Diff: Page Ref: 446, Table 14.4 Skill: Application Objective: 14.3: Understand how individual consumers decide whether or not to try and adopt a particularly innovative product or service 25 ScholarStock 73) In the TABLE MINI CASE, the is three weeks A) adopter category B) communication flow C) rate of adoption D) skimming policy E) purchase time Answer: E Diff: Page Ref: 439 Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 74) In the TABLE MINI CASE, the new table style is an example of a A) discontinuous innovation B) dynamically discontinuous innovation C) statically continuous innovation D) dynamically continuous innovation E) continuous innovation Answer: E Diff: Page Ref: 433 Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 75) There is no universally accepted definition of the terms product innovation or new product Answer: TRUE Diff: Page Ref: 432 AACSB: Analytic Skills Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 76) According to the firm-oriented definition of innovation, copies or modifications of a competitor's product qualify as new Answer: TRUE Diff: Page Ref: 433 Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 26 ScholarStock 77) Use innovativeness involves meeting an old need with a new product specifically designed for that purpose Answer: FALSE Diff: Page Ref: 434 AACSB: Analytic Skills Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 78) All new products have an equal potential for consumer acceptance Answer: FALSE Diff: Page Ref: 434 AACSB: Reflective Thinking Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 79) A particular innovation may diffuse differently throughout different cultures Answer: TRUE Diff: Page Ref: 436 AACSB: Multicultural and Diversity Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 80) How quickly an innovation spreads through a market depends to a great extent on communications between the marketer and consumers, as well as communication among consumers Answer: TRUE Diff: Page Ref: 437 AACSB: Reflective Thinking Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 81) The social system serves as the boundary within which the diffusion of a new product is examined Answer: TRUE Diff: Page Ref: 439 AACSB: Analytic Skills Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 27 ScholarStock 82) Marketers should disregard the orientation of their target consumers' social system when seeking to gain acceptance for their new products Answer: FALSE Diff: Page Ref: 439 AACSB: Reflective Thinking Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 83) Purchase time refers to the amount of time consumers use a product or service before they feel comfortable talking to others about their experiences Answer: FALSE Diff: Page Ref: 439 Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 84) Longer purchase times typically lead to faster diffusion of innovations Answer: FALSE Diff: Page Ref: 439 AACSB: Analytic Skills Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 85) The first set of people who purchase a new product are called early adopters Answer: FALSE Diff: Page Ref: 441 Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 86) The traditional five adopter categories present in diffusion literature include all potential consumers present in the marketplace Answer: FALSE Diff: Page Ref: 442 AACSB: Analytic Skills Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 28 ScholarStock 87) In general, the diffusion of products worldwide is becoming a more rapid phenomenon Answer: TRUE Diff: Page Ref: 443 AACSB: Reflective Thinking Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 88) Consumer innovators tend to display higher levels of social interaction and opinion leadership than noninnovators Answer: TRUE Diff: Page Ref: 448 AACSB: Reflective Thinking Skill: Concept Objective: 14.4: Understand the personal characteristics of innovators 89) Consumer innovators are not as interested as late adopters or nonadopters in the product categories that they are among the first to purchase Answer: FALSE Diff: Page Ref: 449 Skill: Concept Objective: 14.4: Understand the personal characteristics of innovators 90) Consumer innovators provide other consumers with information and advice about new products, and those who receive such advice frequently follow it Answer: TRUE Diff: Page Ref: 449 Skill: Concept Objective: 14.4: Understand the personal characteristics of innovators 91) Because motivated consumer innovators can influence the rate of acceptance or rejection of a new product, they influence its eventual success or failure Answer: TRUE Diff: Page Ref: 449 AACSB: Reflective Thinking Skill: Application Objective: 14.4: Understand the personal characteristics of innovators 92) Noninnovators seem to find new products threatening to the point where they prefer to delay purchase until the product's success has been clearly established Answer: TRUE Diff: Page Ref: 449 AACSB: Reflective Thinking Skill: Application Objective: 14.4: Understand the personal characteristics of innovators 29 ScholarStock 93) Consumer innovators are more dogmatic than noninnovators Answer: FALSE Diff: Page Ref: 449 AACSB: Analytic Skills Skill: Concept Objective: 14.4: Understand the personal characteristics of innovators 94) Innovative behavior can be an expression of an individual's need for uniqueness The need for uniqueness allows an individual to distinguish himself by purchasing a rare item, which is a socially acceptable behavior Answer: TRUE Diff: Page Ref: 450 Skill: Application Objective: 14.4: Understand the personal characteristics of innovators 95) Consumer innovators are low-risk perceivers Answer: TRUE Diff: Page Ref: 450 Skill: Concept Objective: 14.4: Understand the personal characteristics of innovators 96) Consumer innovators are less likely to be deal prone Answer: FALSE Diff: Page Ref: 451 AACSB: Analytic Skills Skill: Concept Objective: 14.4: Understand the personal characteristics of innovators 97) Innovators tend to watch more television than noninnovators Answer: FALSE Diff: Page Ref: 452 Skill: Concept Objective: 14.4: Understand the personal characteristics of innovators 98) Consumer innovators are more socially accepted and socially involved than noninnovators Answer: TRUE Diff: Page Ref: 452 Skill: Concept Objective: 14.4: Understand the personal characteristics of innovators 99) The overlap of innovativeness across product categories seems to be limited to product categories that are closely related to the same basic interest area Answer: TRUE Diff: Page Ref: 452 AACSB: Reflective Thinking Skill: Concept Objective: 14.4: Understand the personal characteristics of innovators 30 ScholarStock 100) Define and give examples of the four types of definitions of innovations Answer: Definitions of innovation can be classified as: ∙ Firm-oriented: treats the newness of a product from the perspective of the company producing or marketing it ∙ Product-oriented: focuses on the features inherent in the product itself and on the effects these features are likely to have on consumers' established usage patterns ∙ Market-oriented: judges the newness of a product in terms of how much exposure consumers have to the new product ∙ Consumer-oriented: a "new" product is any product that a potential consumer judges to be new Examples given by students will vary Diff: Page Ref: 433 AACSB: Analytic Skills Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 101) What are the differences between continuous, dynamically continuous, and discontinuous innovation? Answer: A continuous innovation has the least disruptive influence on established patterns It involves the introduction of a modified product rather than a totally new product A dynamically continuous innovation is somewhat more disruptive than a continuous innovation but still does not alter established behavior patterns It may involve the creation of a new product or the modification of an existing product A discontinuous innovation requires consumers to adopt new behavior patterns Diff: Page Ref: 433 AACSB: Analytic Skills Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 31 ScholarStock 102) Define and give examples of the five product characteristics that influence the diffusion of innovation Answer: The five product characteristics that influence the diffusion of innovation are: ∙ Relative advantage: the degree to which potential customers perceive a new product as superior to existing substitutes ∙ Compatiblity: the degree to which potential consumers feel a new product is consistent with their present needs, values, and practices ∙ Complexity: The degree to which a new product is difficult to use or understand ∙ Trialability: The degree to which a new product is capable of being tried on a limited basis ∙ Observability: The degree to which a product's benefits or attributes can be observed, imagined, or described to potential customers Examples provided by students will vary Diff: Page Ref: 437, Table 14.1 AACSB: Analytic Skills Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 103) Identify and discuss four characteristics that typify a modern social system Answer: Students may choose and discuss any four of the following characteristics: ∙ A positive attitude toward change ∙ An advanced technology and skilled labor force ∙ A general respect for education and science ∙ An emphasis on rational and ordered social relationships rather than on emotional ones ∙ An outreach perspective, in which members of the system frequently interact with outsiders, thus facilitating the entrance of new ideas into the social system ∙ A system in which members can readily see themselves in quite different roles Diff: Page Ref: 439 AACSB: Analytic Skills Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 32 ScholarStock 104) Identify and describe each of the five adopter categories Answer: ∙ Innovators (2.5%): very eager to try new ideas; acceptable if risk is daring; more cosmopolite social relationships; communicate with other innovators ∙ Early Adopters (13.5%): more integrated into the local social system; the persons to check with before adopting a new idea; category contains greatest number of opinion leaders; are role models ∙ Early Majority (34%): adopt new ideas just prior to the average time; seldom hold leadership positions; deliberate for some time before adopting ∙ Late Majority (34%): adopt new ideas just after the average time; adopting may be both an economic necessity and a reaction to peer pressures; innovations approached cautiously ∙ Laggards (16%): the last people to adopt an innovation; most "localite" in outlook; oriented to the past; suspicious of the new Diff: Page Ref: 441 AACSB: Analytic Skills Skill: Concept Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 105) What is the marketing significance of rate of adoption? How can a slower rate of adoption be beneficial to the marketer? Answer: The rate of adoption is concerned with how long it takes a new product or service to be adopted by members of a social system The objective in marketing new products is usually to gain wide acceptance of the product as quickly as possible Marketers desire a rapid rate of product adoption to penetrate the market and quickly establish market leadership Rapid product adoption also demonstrates to market intermediaries that the product is worthy of their full and continued support This is called a penetration policy Under certain circumstances, marketers might prefer to avoid a rapid rate of adoption for a new product Marketers who wish to use a pricing strategy that will enable them to recoup their development costs quickly might follow a skimming policy, whereby they first make the product available at a very high price to consumers who are willing to pay top dollar and then gradually lower the price in a stepwise fashion to attract additional market segments at each price reduction plateau Diff: Page Ref: 443-444 AACSB: Reflective Thinking Skill: Application Objective: 14.2: Understand how innovative products and services spread (or fail to spread) within a social system 33 ScholarStock 106) Identify and give examples of what happens during each of the five stages of the adoption process Answer: ∙ Awareness: the consumer is first exposed to the product innovation, e.g Mark sees the new video iPod advertised in a magazine ∙ Interest: the consumer is interested in the product and searches for additional information, e.g Mark goes to the Apple website to find out more about the video iPod ∙ Evaluation: the consumer decides whether or not to believe that this product or service will satisfy the need, e.g Mark decides that the new video iPod would be perfect for listening to music and watching TV on his 30-minute train commute to work each day ∙ Trial: the consumer uses the product on a limited basis, e.g Mark buys a video iPod at his local Apple store, but saves the receipt so that he can return it in a few days if he decides he doesn't really like it ∙ Adoption/Rejection: if trial is favorable, the consumer decides to use the product on a full rather than a limited basis If unfavorable, the consumer decides to reject it, e.g Mark finds that watching videos on such a small screen while on the train makes him sea-sick, and so decides that he doesn't really like it and returns the iPod Diff: Page Ref: 446, Table 14.4 Skill: Application Objective: 14.3: Understand how individual consumers decide whether or not to try and adopt a particularly innovative product or service 107) In what ways is the traditional adoption process model inadequate in its depiction of the consumer adoption process? Answer: Although the traditional adoption process model is insightful in its simplicity, it does not adequately reflect the full complexity of the consumer adoption process For one, it does not adequately acknowledge that there is quite often a need or problem-recognition stage that consumers face before acquiring an awareness of potential options or solutions Moreover, the adoption process does not adequately provide for the possibility of evaluation and rejection of a new product or service after each stage, especially after trial Finally, it does not explicitly include postadoption or postpurchase evaluation, which can lead to strengthened commitment or to a decision to discontinue use Diff: Page Ref: 445-446 AACSB: Reflective Thinking Skill: Concept Objective: 14.3: Understand how individual consumers decide whether or not to try and adopt a particularly innovative product or service 34 ScholarStock 108) How has the relative importance of information sources changed in recent years with regard to the adoption process? Answer: While interpersonal sources of information are still important at the latter stages of the purchase decision process, it is believed that the nature of these interpersonal sources has changed A person seeking information today no longer has to rely mostly on friends, relatives, and/or salespeople For almost any product category, there are discussion forums, chat rooms, and blogs on the Web that can not only provide relevant information, but can also answer questions Diff: Page Ref: 447 AACSB: Communication Skill: Application Objective: 14.3: Understand how individual consumers decide whether or not to try and adopt a particularly innovative product or service 109) Discuss the attitude of the consumer innovator toward risk Answer: Consumer innovators seem to be more receptive to the unfamiliar and the unique; they are more willing to rely on their own values or standards than on the judgment of others They also are willing to run the risk of a poor product choice to increase their exposure to new products that will be satisfying Diff: Page Ref: 450 Skill: Concept Objective: 14.4: Understand the personal characteristics of innovators 35 ScholarStock ... product are considered A) consumer innovators B) nonadopters C) laggards D) trial drivers E) test consumers Answer: A Diff: Page Ref: 432 Skill: Concept Objective: 14. 1: Understand the twofold... Concept Objective: 14. 2: Understand how innovative products and services spread (or fail to spread) within a social system ScholarStock 13) A requires consumers to adopt new behavior patterns... potential consumers judge to be new A) product-oriented B) market-oriented C) consumer- oriented D) firm-oriented E) development-oriented Answer: C Diff: Page Ref: 433 Skill: Concept Objective: 14. 2: