Principles of Marketing

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Preparation for Final Exam
Principles of Marketing

Define diffusion of innovation. Identify and describe the categories and profiles of each product adopter? 

Ans: The diffusion of innovation is the extent to which a new product or technology spreads or "diffuses" through a population in terms of initial purchases. The five categories of product adopters are: Innovators: These adopters tend to be venturesome, possess higher education and use multiple information sources before making product purchases. Early Adopters: These adopters are leaders in social settings and have slightly above average education. Early Majority: These consumers are deliberate when making product purchases and use many informal social contracts as information sources. Late Majority: These consumers are skeptical about new products and possess a lower than average social status. Laggards: These consumers have a fear of debt and rely on neighbors and friends for information regarding new products.

What is the difference between a brand name and a trade name? Give an example of each? 

Ans: A brand name is any word, device (design, sound, shape or color) or combination of these, used to distinguish a seller's goods or services. Some brand names can be spoken, such as Big Mac hamburger. Other brand names cannot be spoken, such as the logo that Apple Computer puts on its machines and in its ads. A trade name is a commercial, legal name under which a company does business (e.g. Campbell Soup Company).

Why are warranties important? 

Ans: Warranties are important in light of increasing product liability claims. Warranties represent much more to the buyer than just protection from negative consequences. They hold a significant marketing advantage for the producer. For example, Sears has built a strong reputation for its Craftsman hand tools line with a simple warranty: if you break a tool, it's replaced with no questions asked.