Unformatted text preview: t characteristics
influencing the rate of adoption of new products, and explain how each factor will influence the rate of adoption of a blood substitute like Hemopure.
COMPLEXITY refers to the degree of difficulty involved in understanding and using a new
product. The more complex the product, the slower its diffusion. Hemopure is administered the
same way as donated blood, so the complexity will be low for this product and will increase the
rate of adoption.
COMPATIBILITY refers to the degree to which the new product is consistent with existing
values and product knowledge, past experiences, and current needs. Incompatible products
diffuse more slowly than compatible products. Hemopure is very compatible with how medical
personnel currently meet patients’ need for blood transfusions, so the rate of adoption will
RELATIVE ADVANTAGE is the degree to which a product is perceived to be superior to
existing substitutes. Superiority increases the diffusion rate. Because Hemopure does not have to
be refrigerated or blood typed, it is superior to donated human blood. This will increase the rate of
OBSERVABILITY refers to the degree to which the benefit or other results of using the product
can be observed by others and communicated to target customers. A higher degree of
observability enhances diffusion. Medical professionals can see the benefit of the product by
looking at the results of clinical trials.
TRIALABILITY is the degree to which a product can be tried on a limited basis. Demonstrations
and sampling help trialability. Products with low levels of trialability experience slower diffusion.
Hospitals could be given the blood to test, which would likely increase the rate of adoption.
KEY: CB&E Model Product OBJ: 11-4 TOP: AACSB MSC: BLOOMS Synthesis 13. Draw the sales line and the profit line of the product life cycle in the following diagram, and label
each line. Then indicate the names of the four stages of the product life cycle in the blanks
See Exhibit 11.2. The sales line should start at zero sales at the beginning of the introductory
stage, accelerate during the growth stage, peak in the maturity stage, and decrease during the
The profit line should start in the negative range during the introductory stage, break even at the
start of the growth stage, peak during the growth stage, and reach a near-zero asymptote during
the maturity and decline stages. At no point should the profit line be above the sales line.
KEY: CB&E Model Product OBJ: 11-5 TOP: AACSB MSC: BLOOMS Synthesis 14. List the four stages of the product life cycle and discuss the typical characteristics of each stage. ANS:
The INTRODUCTORY STAGE is characterized by a high failure rate, little competition, frequent
product modification, limited distribution, high marketing and production costs, negative profits,
and promotion that stimulates primary demand.
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- Fall '13