Workbook for students

Chapter 11 – Marketing and diffusion of Innovation

Updated:
27 Sep 2019 WP Nel

Students’
Workbook

Based on METS-3

Based on: ‘Management for Engineers,

Technologists and Scientists’ (METS-3)
pp. 227-245

Open Rubric
Dear reader

This chapter of the workbook is based on chapter 11 of the third edition of the textbook,
‘Management for Engineers, Technologists and Scientists’, which is abbreviated as “METS-3”.

Purpose of workbook
The workbook encourages an active learning process. The self-evaluation questions cover the
whole range of Bloom’s taxonomy – from questions that test basic concepts to more complex
questions that test higher levels of knowledge and thinking.

The following types of questions and information are included in the workbook:

• Section A – True and false questions

• Section B – Multiple choice questions (MCQs)
• Section C – Short questions, long questions and calculations
• Section D – Project work
• Section E – Case studies
• Section F – Sources on the world wide web (WWW)

Some of the projects and case studies will require learners to consult additional sources of
information.

Please refer to this workbook chapter as follows:

Nel, W.P. 2019. Workbook for the 3rd edition of “Management for Engineers, Technologists
and Scientists”: Chapter 11.

I suggest that you use this chapter of the workbook as follows:

• Study section 11.1 “Introduction” (METS-3: 227-228) from the textbook (METS-3).
• Go to section 11A of this workbook and answer the true/false questions from section
11A.1.
• Next, go to section 11B of the workbook and attempt all the multiple choice questions
from section 11B.1.
• Now try to answer all the short and long questions from section 11C.1 of the
workbook.

METS-3 Workbook, Ch 11 (Updated: 27 Sep 2019) Page 2

 • Repeat the above for the different sections of chapter 11 of the textbook and
workbook – sections 11.2, 11.3, etc.

I hope that this will help you to master the chapter.

Please contact me at wilhelmpnel@gmail.com if you do not understand a specific worked

example or if you have any suggestions on how this workbook can be improved.

I wish you success with your studies.

Regards

Wilhelm (Willie) P. Nel

wilhelmpnel@gmail.com

How to use this workbook

Note: The 3rd edition of the textbook entitled ‘Management for Engineers, Technologists and
Scientists’ is abbreviated as METS-3. Therefore, ‘(METS-3: 331)’ refers to page 331 in the 3rd
edition of Management for Engineers, Technologists and Scientists.

METS-3 Workbook, Ch 11 (Updated: 27 Sep 2019) Page 3

Section 11 A – True/false questions

This question consists of true/false questions. State whether the following statements are true or
false. In your answer book, write down “true” or “false” and provide a brief explanation for your
answer.

11A.1 The following true/false questions are based on section 11.1 “Introduction”
(METS-3: 227-228) of the textbook.

11A.1.1 Marketing is concerned with the exchange of goods, services, technologies,

business systems, information, concepts and ideas between buyers and sellers. (1)

11A.1.2 Engineers are mostly involved with the marketing of industrial products and
intellectual property rather than the marketing of end-user products and services. (1)

11A.1.3 The marketing of industrial products is also referred to as “business-to-business

marketing”.

11A.2 The following true/false questions are based on section 11.2 “The role of
Marketing” (METS-3: 228-229) of the textbook.

11A.2.1 Marketing aims to influence the demand for certain products and services. (1)

11A.3 The following true/false questions are based on section 11.3 “The role of
Technical People in the Marketing Process” (METS-3: 229-230) of the textbook.

11A.3.1 The believe that consumers will favour those products that offer the best quality,
performance or innovative features is known as the product concept orientation to
the marketplace. (1)

11A.4 The following true/false questions are based on section 11.4 “Customer
satisfaction and Profitable Customer Relationships” (METS-3: 230-232) of the
textbook.

METS-3 Workbook, Ch 11 (Updated: 27 Sep 2019) Page 4

11A.4.1 Losing a customer involves much more than losing a single sales transaction. (1)

11A.4.2 According to Drucker, the customer decides what the business is, what it produces
and whether it will prosper. (1)

11A.4.3 A customer who cannot understand the operating instructions for a product may
mentally downgrade the company that produced it. (1)

11A.5 The following true/false questions are based on section 11.5 “Marketing
Principles” (METS-3: 232-234) of the textbook.

11A.5.1 Product, place, promotion and price are known as the four Ps of marketing. (1)

11A.5.2 Lengthening product lines is one way of expanding a business. (1)

11A.6 The following true/false questions are based on section 11.6 “Procuct Life Cycles”
(METS-3: 234-235) of the textbook.

11A.6.1 Product and services have limited lives. (1)

11A.7 The following true/false questions are based on section 11.7 “Marketing New
Products” (METS-3: 235-242) of the textbook.

11A.7.1 The whole product refers to the core product plus the augmented product. (1)

11A.8 The following true/false questions are based on section 11.8 “The Consumer
Decision-making Process” (METS-3: 242-243) of the textbook.

11A.8.1 Complex decision making is usually involved when a buyer plans to buy an
expensive product that is not frequently bought. (1)
______

METS-3 Workbook, Ch 11 (Updated: 27 Sep 2019) Page 5

Section 11 B – Multiple choice questions

This section consists of multiple-choice questions. In your answer book, write down the
number of the question, and next to it the number representing the correct option, for
example “11.9 [1]”.

11B.1 The following multiple choice questions are based on section 11.1 “Introduction”
(METS-3: 227-228) of the textbook.

11B.1.1 Read the following four statements:

a) Products that are based on advanced technology will always be successful in the
market.
b) Marketing is concerned with the exchange of goods, services, technologies,
business systems, information, concepts and ideas between buyers and sellers.
c) Engineers, technicians and technologists never engage with customers.
Which of the above statements is/are correct? (2)
[1] b
[2] b and c
[3] a and c
[4] a and b
[5] None of the options (1, 2, 3, or 4) is correct.

11B.1.2 Read the following four statements:

a) Engineers are mostly involved with the marketing of industrial products and
intellectual property rather than the marketing of end-user products and services.
b) When a mine equipment manufacturer sends a representative to a mine to promote
its products, then it is an example of business-to-business marketing.
c) The marketing of industrial products is also referred to as “business-to-business
marketing”.
Which of the above statements is/are correct? (2)
[1] b and c
[2] a, b and c
[3] a and c
[4] a and b
[5] None of the options (1, 2, 3, or 4) is correct.

METS-3 Workbook, Ch 11 (Updated: 27 Sep 2019) Page 6

11B.2 The following multiple choice questions are based on section 11.2 “The role of
Marketing” (METS-3: 228-229) of the textbook.

11B.2.1 Read the following three statements:

a) Customer focus, satisfaction and retention is only the responsibility of the
marketing department.
b) Marketing aims to influence the demand for certain products and services.
c) According to Drucker, marketing is the whole business seen from the customers’
point of view.
Which of the above statements is/are correct? (2)
[1] b and c
[2] a and b
[3] a and c
[4] c
[5] None of the options (1, 2, 3, or 4) is correct.

11B.3 The following multiple choice questions are based on section 11.3 “The role of
Technical People in the Marketing Process” (METS-3: 229-230) of the textbook.
None.

11B.4 The following multiple choice questions are based on section 11.4 “Customer
satisfaction and Profitable Customer Relationships” (METS-3: 230-232) of the
textbook.

11B.4.1 Read the following three statements:

a) Losing a customer involves much more than losing a single sales transaction.
b) According to Drucker, the customer decides what the business is, what it
produces and whether it will prosper.
c) A customer who cannot understand the operating instructions for a product may
mentally downgrade the company that produced it.
Which of the above statements is/are correct? (2)
[1] b and c
[2] a and b
[3] a and c
[4] c

METS-3 Workbook, Ch 11 (Updated: 27 Sep 2019) Page 7

 [5] None of the options (1, 2, 3, or 4) is correct.

11B.5 The following multiple choice questions are based on section 11.5 “Marketing
Principles” (METS-3: 232-234) of the textbook.

11B.5.1 Read the following three statements:

a) Product, place, promotion and price are known as the four Ps of marketing.
b) Positioning refers to the way consumers perceive a product or service.
c) A brand is a name, term, sign, symbol or design or a combination of them,
intended to identify the goods or services of one seller or group of sellers and to
differentiate them from those of competitors.
Which of the above statements is/are correct? (2)
[1] b and c
[2] a, b and c
[3] a and c
[4] c
[5] None of the options (1, 2, 3, or 4) is correct.

11B.5.2 Marketers use tools to influence the customers they want to target. These tools are
known as the marketing mix. Which one of the following is not such a tool? (2)
[1] Product
[2] Place
[3] Promotion
[4] Price
[5] Product life cycle

11B.6 The following multiple choice questions are based on section 11.6 “Procuct Life
Cycles” (METS-3: 234-235) of the textbook.

11B.6.1 Read the following three statements:

a) Product and services have limited lives.
b) Organisations that define themselves in terms of a specific product will fade as
the product matures and declines.
c) Sales slow down during the maturity stage of a product.
Which of the above statements is/are correct? (2)

METS-3 Workbook, Ch 11 (Updated: 27 Sep 2019) Page 8

 [1] b and c
[2] a, b and c
[3] a and c
[4] c
[5] None of the options (1, 2, 3, or 4) is correct.

11B.6.2 There are four stages in the product life cycle known as Introduction, Growth,
Maturity and Decline. Which of the following describe the Growth stage?
[1] Sales slow down
[2] Better distribution
[3] Lack of interest
[4] High prices (2)

11B.6.3 There are four stages in the product life cycle known as Introduction,
Growth, Maturity and Decline. Which of the following describe the Decline
stage?
[1] Sales slow down
[2] Better distribution
[3] Lack of interest
[4] High prices (2)

11B.7 The following multiple choice questions are based on section 11.7 “Marketing
New Products” (METS-3: 235-242) of the textbook.

Figure 1 – Technology life cycle adoption curve (Source: METS-3: 236)

11B.7.1 Study figure 1 and read the following three statements:

METS-3 Workbook, Ch 11 (Updated: 27 Sep 2019) Page 9

 a) “Innovators” and “Early Adopters” are prepared to use new technology with small
glitches.
b) The early majority are less conservative than the first adopters of new products.
c) The group of users indicated by “i’ on figure 1 is known as the “lagging majority”.
Which of the above statements is/are correct? (2)
[1] b and c
[2] a, b and c
[3] a and c
[4] c
[5] None of the options (1, 2, 3, or 4) is correct.

11B.8 The following multiple choice questions are based on section 11.8 “The
Consumer Decision-making Process” (METS-3: 242-243) of the textbook.

11B.8.1 The five stages (in the correct chronological order) that you would expect a
customer to go through when buying a car are ... (2)
[1] need recognition; information search; post-purchasing behaviour; purchase
decision; evaluation of alternatives.
[2] information search; need recognition; evaluation of alternatives; purchase
decision; post-purchasing behaviour.
[3] information search; need recognition; evaluation of alternatives; purchase
decision; post-purchasing behaviour.
[4] need recognition; information search; evaluation of alternatives; purchase
decision; post-purchasing behaviour.

11B.8.2 The first stage in the consumer purchasing decision making process is known as:
[1] Information search
[2] Need recognition
[3] Evaluation of alternatives
[4] Purchase decision (2)

11B.9 The following multiple choice questions are based on Chapter 11 (METS-3: 227-
245) of the textbook.

11B.9.1 Read the following three statements:

METS-3 Workbook, Ch 11 (Updated: 27 Sep 2019) Page 10

 a) Marketing mix refers to the combination of the Ps (e.g. product, place, promotion
and price) to address the needs of a specific group of customers.
b) Business-to-business marketing refers to the marketing of industrial products.
c) Product differentiation is the process whereby customers learn about new
products, try them and then buy or reject them.
Which of the above statements is/are correct? (2)
[1] a and b
[2] a
[3] a and c
[4] b
[5] None of the options (1, 2, 3, or 4) is correct.

______

Section 11 C – short and long questions

11C.1 The following short and long questions are based on section 11.1 “Introduction”
(METS-3: 227-228) of the textbook.

Question 11C.1
Describe the role of marketing in an organisation. (4)

11C.2 The following short and long questions are based on section 11.2 “The role of
Marketing” (METS-3: 228-229) of the textbook.
None.

11C.3 The following short and long questions are based on section 11.3 “The role of
Technical People in the Marketing Process” (METS-3: 229-230) of the textbook.

Question 11C.3.1
Describe the role of technical people in the marketing process. (5)
Or
Evaluate the following statement: “There is no role for engineers in the marketing process at
all.” (8)

METS-3 Workbook, Ch 11 (Updated: 27 Sep 2019) Page 11

11C.4 The following short and long questions are based on section 11.4 “Customer
satisfaction and Profitable Customer Relationships” (METS-3: 230-232) of the
textbook.

Question 11C.4.1
Explain why it is not only important for businesses to promote products to new customers but
also for them to keep the current customer base satisfied and to continuously maintain
relations with existing customers. Explain how customers can be changed into loyal
customers. Describe what technical people, such as engineers, can do to create value for
customers. (10)

Question 11C.4.2
Explain the concept of a value chain and describe the value chain of which your organisation
forms part. (5)

11C.5 The following short and long questions are based on section 11.5 “Marketing
Principles” (METS-3: 232-234) of the textbook.

Question 11C.5.1
You are the owner of a quarry that produces building stone (aggregate). Identify at least two
market segments within the building stone market. Explain how you would combine the
different marketing instruments to form various marketing offerings that will address the
needs of the different segments. (10)

Question 11C.5.2 (Market segmentation)

You are the owner of a small company which has developed new technology that can relieve
the pain of humans by means of electrical impulses. You obtained patent rights for the
invention and plan to develop the concept further and introduce a product that is based on
this knowledge. Estimates show that the product will have to be sold at a price in excess of
R4 000 to cover development and manufacturing costs. Define ‘market segmentation’ and
explain how the market for alleviating pain could possibly be segmented. (4)

Question 11C.5.3
Define ‘market segmentation’ and explain how any one of the following markets could be
segmented:

METS-3 Workbook, Ch 11 (Updated: 27 Sep 2019) Page 12

 • Computers
• Motor vehicles
• Diamonds
• Any other product of your choice (4)

Question 11C.5.4
A company such as Samsung or LG can expand its business by making changes to its
product mix. Explain how they can do this. Provide examples. (6)

11B.6 The following short and long questions are based on section 11.6 “Procuct Life
Cycles” (METS-3: 234-235) of the textbook.

Question 11C.6.1 (Product life cycle)

The following is a list of products: matches, black-and-white TVs, fuel cell bus, cellular
phones (dual band), cellular phones (3G), plasma TV screens, LCD TV screens, Betamax
video machines, VHS video machines, DVD video machines, hard disk drive video recorder,
satellite TV in South Africa, GPS in vehicles, 3D-television, and other products of your choice

a) Briefly describe the concept of the product life cycle. (4)

b) Choose four products from the above list that each product matches one of the four
stages of the product life cycle. Give brief reasons for your answer. (8)
c) Describe how these four products should be managed, given their product life cycle
stages. (4)
or
d) Products go through four distinct phases: Introduction, Growth, Maturity and Decline. This
is called the Product life cycle. Briefly describe the generic characteristics of each of these
four stages that a product can go through. (8)

11C.7 The following short and long questions are based on section 11.7 “Marketing
New Products” (METS-3: 235-242) of the textbook.

Question 11C.7.1
Briefly describe some of the problems that the marketers of new technological products are
confronted with and explain how such problems can be overcome. (6)

METS-3 Workbook, Ch 11 (Updated: 27 Sep 2019) Page 13

Question 11C.7.2
In the consumer adoption process of a new product, consumers usually differ in their
willingness and readiness to try new products. Briefly discuss the following five adoption
groups: Innovators, Early adopters, Early majority, Late majority and Laggards. Which one of
the above customer groups is most likely to buy a new technological innovation? (11)

Question 11C.7.3
A number of car manufacturers have built concept fuel-cell cars, buses and motor cycles and
are continuing to spend lots of money to further improve it. By the end of 2004 there were
about 500 such vehicles in the world and it may still take a while before a fuel cell automobile
will become a viable alternative to internal combustion-driven automobiles for a large
percentage of customers. Apply your knowledge of the requirements that a new product
should meet and the factors that assist the diffusion of a new technology in the market place
to specify some characteristics that such a fuel cell automobile will need to compete with
traditional (internal combustion engine) cars. You may include supporting infrastructure such
as fuel distribution in your analysis. (6)

Question 11C.7.4 (Diffusion of innovation)

a) Study the two graphs below. Why do you think cellular phones diffused so fast globally
and in South Africa while it took so long for railways to diffuse in the United States? (4)

Figure – The diffusion of infrastructure in the United States. The length of each type of
infrastructure was plotted as a percentage of its saturation level (Grübler et al, 1999: 261).

METS-3 Workbook, Ch 11 (Updated: 27 Sep 2019) Page 14

 Global annual cellular phone sales

1200
Source:
1000
Gardner
800
millions

600
400

200

0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Year (forecasted: 2005 - 2009)

b) Your company is planning to introduce a new invention into the market place. Your
company’s marketing department is trying to determine the size of the market for this
product and how fast the market for it will grow to this level. Advise your marketing
department of the factors that may influence the diffusion of this product. (5)
c) Use the “diffusion of innovation” body of knowledge to analyse why the diffusion of
cellular phones (in South Africa) is so much faster than that of hybrid vehicles. (5)
[14]
Reference
Grübler, A., Nakićenović, N. and Victor, D.G., 1999. Dynamics of energy technologies and
global change. Energy policy, 27(5), pp.247-280.

Question 11C.7.5
In addition to existing well diffused petrol and diesel internal combustion engine powered
vehicles a number of new types of vehicles are being manufactured in still relative small
numbers. Hybrid cars combine petrol or diesel engines with batteries and electric motors
while electric vehicles such as Nissan’s Leaf, BMW’s i3 and i8 and a number of models by
Tesla have also been released. Furthermore, a number of car manufacturers have built
concept fuel-cell cars and are continuing with research and development efforts to improve it.
Toyota’s Mirai is one of the first fuel cell vehicles to be sold commercially.

Required: Apply your knowledge of the requirements that a new product should meet and the
factors that assist the diffusion of a new technology in the market place to evaluate and

METS-3 Workbook, Ch 11 (Updated: 27 Sep 2019) Page 15

compare the different types of technologies and models. You may include supporting
infrastructure related to refuelling and recharging in your analysis. [10]

Question 11C.7.6
Information about the adoption and forecasts about diffusion rates of technology can help us
to forecast future mineral commodity demand. Use the following information to forecast how
much copper (and alloys) will be required by a) wind farms and b) Solar PV plants during the
period 2030 to 2050. List any assumptions that you may make.

(IRENA, 2017, Leveraging local capacity – Solar PV: 8)

METS-3 Workbook, Ch 11 (Updated: 27 Sep 2019) Page 16

(IRENA, 2017, Leveraging onshore Wind: 8)

Fig. i - Materials needed to develop a 50 MW wind farm. (IRENA, 2017: 11)

Fig. ii - Materials needed to develop a 1 MW silicon-based solar PV plant (IRENA,

2017: 13)

METS-3 Workbook, Ch 11 (Updated: 27 Sep 2019) Page 17

11C.8 The following short and long questions are based on section 11.8 “The
Consumer Decision-making Process” (METS-3: 242-243) of the textbook.

Question 11C.8.1
The consumer purchasing decision-making process can be illustrated as follows:

EVALUATION
NEED INFORMATION OF PURCHASE POSTPURCHASE
RECOGNITION SEARCH ALTERNATIVES DECISION BEHAVIOUR

Briefly discuss this process. (6)

11C.9 The following short and long questions are based on Chapter 11 (METS-3: 227-
245) of the textbook.

Question 11C.9.1
Define the following:
• Marketing (2)
• Marketing management (2)
• Business-to-business marketing (1)
• Marketing mix (2)
• Market segmentation (2)
• Market positioning (2)
• Product differentiation (2)
• Diffusion process (1)
• Adoption process (1)
• Branding (1)
[16]
Question 11C.9.2
Match each of the following marketing concepts, on the left of the table below, with the
phrase or definition on the right that best describes it. In your answer book, write down the
number of each term, and next to it the letter representing the correct option, e.g. 1. j. (7)
1. Marketing mix a. The marketing of industrial products
2. Adoption Process b. The spreading of the product through society.
3. Diffusion Process c. A company can produce products with features
(functionality) that is different from those of its

METS-3 Workbook, Ch 11 (Updated: 27 Sep 2019) Page 18

 competitors in order to gain a competitive advantage.
4. Market positioning d. This is the process whereby customers learn about
new products, try them and then buy or reject them.
5. Market e. The 5 Ps (product, place, promotion, people and price)
segmentation are combined in such a way to address the needs of a
specific group of customers.

6. Business-to- f. This is about dividing a market into smaller groups of

business marketing customers with similar needs.
7. Product g. This relates to the way a product or service is
differentiation perceived by consumers. What perceptions do clients
have about your product or service? Is it good quality,
bad value for money, affordable, too difficult to obtain,
etc.?

Question 11C.9.3
Seven percent of people with a College education in the USA majoring in engineering and
eleven percent of those majoring in the physical sciences are employed in Sales (Carnevale
et al: 120, 165).
Why do you think so many of these people are involved in Sales? (4)
Reference
Carnevale, A.P., Strohl, J. & Melton, M. 2011 What’s it worth?: The Economic Value of
College Majors, Georgetown University, Center on Education and the Work Force.

Question 11C.9.4
Briefly describe various issues that have to be considered by engineers and technologists
involved in product development and the marketing and introduction of new products. (6)

Question 11C.9.5
Explain the relationship between product development and the market. (6)

____________________

Section 11D – Project work

Note: You will find general guidelines for the answering of projects and the writing of reports
in Annexure C, at the end of this document.

METS-3 Workbook, Ch 11 (Updated: 27 Sep 2019) Page 19

Project 11D.1 [Product life cycle]
Select one to a maximum of five products or services that an organisation of your
choice offers. Use the product life-cycle model to analyse these products. Explain
which stage of the life-cycle each product is at and what the consequences for the
company are in terms of research and development spending, marketing, phasing out
and so on.

Project 11D.2 [Diffusion of innovation]

Obtain data on the diffusion of a specific technology or product and check whether you obtain
the characteristic S-curve shape. Analyse and describe all the various factors/drivers that
could have had an impact on the diffusion of this product/technology. Assess the
technological fitness and competitiveness of this product/technology.

Project 11D.3 [Minerals marketing]

Minerals such as platinum, gold, diamonds, coal and zircon are marketed in different ways.
Present a report on the different methods that a mining company can use to market the
mineral that they are exploiting. You may choose any number of minerals for this project, but
preferably concentrate on only one. Include the following in your report:
• How is (are) the mineral(s) promoted?
• Description of organisations that may be involved in the promotion of the mineral
• Main use(s) of the mineral; how is the market for this specific mineral segmented?
• Is the mineral sold on a market such as the London Metals Exchange or by means of
contractual agreement between the mine and purchaser?
• Branding of the mineral
• What percentage of production in South Africa is locally processed into consumer products?
What percentage is sold to foreigners as industrial products?
• What can be done to promote further beneficiation of the mineral in South Africa?

____________________

Section 11E – Case studies

Case 11E.1 ()
____________________

METS-3 Workbook, Ch 11 (Updated: 27 Sep 2019) Page 20

Section 11F – Sources on the World Wide Web

The video by Rory Sutherland on “the awesome power of psychological placebos” is available
at https://www.youtube.com/watch?v=Icrt6JwnwJs . The video is about marketing,
psychology and behavioural economics and raises the question about how rational people
are. Rational behaviour is after all one of the key, major assumptions of Economics.

- - - - End of Chapter 11 - - - -

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