CB - quiz article - why great new product fail

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Questions and Answers

What is a key reason why many innovative products fail?

Poor product quality

Lack of sufficient marketing

High production costs

Customers don't recognize their value (correct)

According to the article, what do companies often fail to consider when launching new products?

How customers make purchasing decisions (correct)

Customer desires for variety

The competitive landscape

Production efficiency

What are the two main ways customers collect product information?

Word-of-mouth and influencer marketing

Surveys and in-store visits

Search and inference (correct)

Reviews and advertisements

What did the example of United Airlines' aircraft purchase illustrate?

The length and cost of the search process Signup and view all the answers

What challenge did the British shower manufacturer face?

Customers unaware that a better shower was possible Signup and view all the answers

In which situation are customers more likely to use inference?

When the cost of searching is too high Signup and view all the answers

What role does brand play in customer inferences?

It serves as a proxy for product quality Signup and view all the answers

Why is search less likely when customers have significant expertise?

They already know what's best Signup and view all the answers

How did McDonald's use parking lot cleanliness as a cue?

To infer kitchen cleanliness Signup and view all the answers

Which of the following is a subconscious factor in customer inference?

Visual cues like color Signup and view all the answers

What is a potential downside of relying on inference for product quality?

Customers may misunderstand the cues Signup and view all the answers

What did customers at McDonald's infer from the parking lot cleanliness?

The cleanliness of the restaurant Signup and view all the answers

What is a risk for companies that innovate without considering customer perception?

Customers may not understand the innovation Signup and view all the answers

In the 'Checker Shadow Illusion' example, what did customers struggle to realize?

That square A and square B were the same color Signup and view all the answers

What is the role of the brand in markets where customers cannot easily search?

To serve as a quality signal Signup and view all the answers

How has the Internet impacted the cost of searching for product information?

It has reduced the cost of searching Signup and view all the answers

When are customers most likely to conduct thorough searches?

When buying a high-cost or important product Signup and view all the answers

Why might customers ignore great new products?

Unfamiliarity with the product's features Signup and view all the answers

According to the article, what should companies focus on to increase product success?

Helping customers recognize the product's value Signup and view all the answers

What does the example of the Aqualisa shower system illustrate?

The importance of customer awareness of improvements Signup and view all the answers

When customers can recognize product greatness, companies are more likely to:

Achieve higher sales Signup and view all the answers

Which factor can diminish the importance of brand in customer decisions?

Easy access to product information Signup and view all the answers

How do customers often make inferences about unobservable product features?

Based on visible cues and brand reputation Signup and view all the answers

What is a consequence when customers shift from search to inference?

They are less likely to recognize product innovations Signup and view all the answers

What question can help companies predict if customers will embrace a new product?

Are customers motivated to search for a solution? Signup and view all the answers

Study Notes

Customer Perception of New Products

Customers often fail to recognize the value of innovative products, leading to their failure.
Companies should focus on how customers collect product information and make purchasing decisions to avoid this.
Customers primarily gather product information through two main ways:
- Search: actively seeking information through reviews, advertisements, and online searches.
- Inference: using cues and existing knowledge to make assumptions about product quality.
- Inference becomes more likely when the cost of searching is high, the product is complex, or customers have limited expertise.
Brands serve as a proxy for quality when customers rely on inference, acting as a signal for unobservable features.
Customers are more likely to engage in thorough searches when buying high-cost or important products.
Companies should focus on helping customers recognize the value of their products to increase success.
Understandable product value, especially for innovations, is key to customer adoption.
Simple visual cues can have a significant impact on customer inferences about product quality.
Subconscious factors, like visual cues (color, cleanliness) and brand reputation, influence customer inferences.
Increased access to information through the internet has lowered the cost of searching, making customers less reliant on inferences.
Customers need to be motivated to search for a solution for a new product to be successful.

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Description

Explore how customers perceive the value of innovative products and the factors that influence their purchasing decisions. This quiz will delve into the methods customers use to gather information, such as active searching and inference. Understanding these concepts is crucial for companies aiming to improve customer engagement and product recognition.