Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Name___________________________________
1.
Which of the following is a significant challenge presented by the product life cycle?
A)
new-product development
B)
static tastes and zero competition
C)
anti-trust laws
E)
measurement of results
2.
Acquisition refers to ________.
A)
a partnership between two companies to produce a product in different countries by sharing risks
B)
the buying of a whole company, a patent, or a license to produce someone else's product
C)
the development of original products, product improvements, product modifications, and new brands through the firm's
own product development strategies
D)
investments made in a country's businesses by foreign citizens, often in the form of stocks
Page Ref: 284
AACSB:
Skill: Concept
Objective: 9-1
Difficulty: Easy
3.
Electron Corp. purchased Proton Corp. by buying all of its assets and ownership equity. This is an example of a(n)
________.
A)
acquisition
B)
new-product development
C)
joint venture
D)
divestment
E)
greenfield investment
4.
Product improvements, product modifications, and original products can all be classified as ________.
A)
test products
B)
new products
C)
blueprints
D)
product extensions
E)
prototypes
5.
Which of the following is a common reason for new product failure?
A)
6.
A particular firm added three new products earlier this year to increase variety for customers. Two of the products failed
to reach the minimal sales quota. Which of the following is LEAST likely to have been the cause of their failure?
A)
7.
New-product development starts with ________.
A)
concept testing
B)
idea screening
C)
concept development
D)
idea generation
E)
test marketing
8.
John's fascination for his grandmother's sherbet recipes inspired him to come up with a recipe for SherBetter, a gourmet
sherbet for the American market. Which of the following stages of the new-product development process does this
exemplify?
A)
idea generation
B)
concept testing
C)
idea screening
D)
product development
E)
product manufacturing
9.
Which of the following is an internal source for new-product ideas?
A)
competitors
B)
trade magazines
D)
company executives
E)
government agencies
10.
Many companies have developed ________ programs that encourage employees to develop new-product ideas.
A)
management
B)
intrapreneurial
C)
offshoring
inshoring
D)
E)
entrepreneurial
11.
Why are customers often considered the most important sources of new-product ideas?
A)
Customers estimate the minimum and maximum sales to assess the range of risk.
B)
Customers buy competing new products, take them apart to see how they work, analyze sales, and then decide to
purchase.
C)
Customers are close to the market and can pass along information about problems and new-product possibilities.
D)
Customers review the sales, costs, and profit projections for a new product to find out whether the product satisfies the
company's objectives.
E)
The company can analyze customer questions and complaints to find new products that better solve consumer problems.
Page Ref: 286
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Moderate
12.
Which of the following is an external source for new-product ideas?
A)
manufacturing staff
B)
engineers
C)
salespeople
D)
project managers
E)
suppliers
13.
Which of the following is the most likely reason that employees regularly attend trade shows and seminars?
A)
Skill: Concept
Objective: 9-2
Difficulty: Moderate
14.
Which of the following is the practice of inviting broad communities of customers, employees, independent researchers,
and members of the public into the new-product innovation process?
A)
brainstorming
B)
idea screening
C)
outsourcing
D)
crowdsourcing
E)
concept testing
15.
Which of the following statements is true of the idea generation stage in the new-product development process?
A)
Truly innovative companies seldom rely on customers and the general public for ideas.
B)
The purpose of idea generation is to reduce the number of ideas to the least possible number.
C)
Truly innovative companies rely exclusively on a single source for new-product ideas.
D)
Truly innovative companies develop extensive innovation networks that capture ideas and inspiration from every possible
source.
E)
Customers are the least important sources of new-product ideas.
Page Ref: 287
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Moderate
16.
In the new-product development process, the first idea-reducing stage is ________.
A)
idea generation
B)
concept development
C)
crowdsourcing
D)
idea screening
E)
business analysis
17.
Executives at an automobile manufacturing company conducted a brainstorming session for selected employees. This
session resulted in a large number of ideas for developing new cars after extensive R&D. The executives then planned to
filter out the best ideas during the ________ stage.
A)
idea generation
B)
concept testing
C)
idea screening
D)
concept development
E)
business analysis
18.
Which of the following would most likely be included in an executive's write up of a new-product idea to be presented to
a new-product committee?
A)
19.
a possible product that the company can see itself offering to the market
E)
the knowledge and awareness of a product among consumers
Page Ref: 287
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Easy
20.
A detailed version of a new idea stated in meaningful customer terms is called a ________.
A)
product lining
B)
product solution
C)
product proposal
D)
product image
E)
product concept
Difficulty: Easy
21.
An attractive product idea must be developed into a ________.
A)
product concept
B)
concept alternative
C)
brand personality
D)
brand placement
E)
product strategy
22.
A ________ is the way consumers perceive an actual or potential product.
A)
product image
B)
concept test
C)
brand personality
D)
product concept
E)
product idea
23.
JoAnn Fabrics Inc. has created a new combination of colors and fabric types. The firm wants to know how consumers will
perceive the new product. The firm is concerned with the product ________.
A)
image
B)
idea
C)
placement
activation
D)
E)
displacement
24.
Which of the following statements best explains why idea screening may be the most important step of new-product
development?
A)
It provides an opportunity for the marketer to test the prototype in a simulated market.
B)
It saves the company money in product development costs by going ahead with only the product ideas that are likely to
be profitable.
C)
It helps forecast the products' sales and profits accurately for a specific period.
E)
It gives research and development team members an opportunity to gather consumer feedback.
Page Ref: 287
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Moderate
25.
Which of the following statements is true of the new-product development process?
A)
The concept testing stage is the stage at which the product and its proposed marketing program are introduced into
realistic market settings.
B)
Commercialization is the process of inviting broad communities of people such as customers, employees, and scientists
into the new-product innovation process.
C)
Under the business analysis stage, if the new product satisfies the company's objectives, the product then moves to the
product development stage.
D)
The purpose of the idea screening stage is to create a large number of ideas.
E)
A product concept is the way consumers perceive an actual or potential product.
Page Ref: 291
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Moderate
26.
Which of the following groups do marketers involve for the process of concept testing new products?
A)
manufacturers
B)
target consumers
C)
employees
competitors
suppliers
D)
E)
27.
Which of the following stages in the new-product development would a firm engage itself in immediately after the
completion of concept testing?
A)
idea generation
B)
idea screening
C)
business analysis
D)
product development
E)
marketing strategy development
Page Ref: 290
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Easy
28.
What is included in the first part of a marketing strategy statement?
A)
promotional mixes
B)
distribution strategy
C)
29.
Which of the following is included in the second part of the marketing strategy statement?
A)
planned price
B)
customer segmentation
C)
operational excellence
D)
promotional mix
E)
advertising tagline
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Easy
30.
Which of the following is included in the third part of the marketing strategy statement?
A)
distribution strategy
B)
the planned long-run sales
C)
marketing budget
D)
31.
A review of the sales, costs, and profit projections for a new product to find out whether they satisfy the company's
objectives is called a ________.
A)
business proposal
B)
marketing strategy development
C)
product acceptance
D)
business analysis
E)
business feasibility plan
32.
Which stage of new-product development requires management to estimate minimum and maximum sales to assess the
range of risk in launching a new product?
A)
concept testing
D)
business analysis
E)
product development
33.
Once managers of The Grecian Urn have decided on their product concept and marketing strategy, they can evaluate the
business attractiveness of the proposal in the ________ stage of the new-product development process.
A)
test marketing
B)
business analysis
C)
concept testing
E)
business transformation
34.
Neutron Inc. is conducting a business analysis to determine which of the many newly developed apps should be released.
To estimate sales, the company must ________.
A)
35.
Which of the following stages of the new-product development process occurs immediately after the completion of the
business analysis for the product or service?
A)
product activation
B)
product design
C)
product development
E)
idea screening
36.
In the ________ stage of the new-product development process, products undergo rigorous tests to make sure that they
perform safely and effectively, or that consumers will find value in them.
A)
product activation
B)
concept development and testing
C)
product design
D)
idea generation
E)
product development
37.
A group of business entrepreneurs who worried about their teenage children drinking and driving decided there must be
some way to approach this problem proactively. They came up with an idea for a pair of blurry goggles. They believed
looking through the goggles would simulate what the world looks like when someone is seriously intoxicated. They
developed a crude pair of blurry goggles to show prospective customers. This crude pair of goggles is known as a
________.
A)
prototype
B)
product idea
C)
product image
D)
synergistic model
E)
component part
Difficulty: Hard
38.
Once the prototype of Wainwright Industries' new riding lawnmower, made especially for women, passes product tests,
the next step is ________.
A)
test marketing
B)
concept testing
C)
commercialization
D)
business analysis
E)
focus group surveys
39.
P&G introduced Duncan Hines ready-to-spread frosting in a small geographic area. When General Mills became aware of
the product, it rushed to market its own Betty Crocker ready-to-spread frosting, which eclipsed the Duncan Hines
product introduction. This illustrates ________.
A)
40.
Yummy Peanut Butter created a new coconut-flavored peanut butter that it tested in a small number of representative
cities. The company plans to use the results to forecast national sales and profits. Which of the following did the firm use?
A)
controlled test markets
B)
standard test markets
C)
affinity marketing
D)
41.
In a(n) ________, new products and marketing tactics are tested among specifically identified groups of customers and
stores.
A)
accidental sample
B)
systematic sample
C)
42.
All of the following are disadvantages of test marketing EXCEPT that test marketing ________.
A)
43.
Which of the following is the most likely circumstance for a company to decide to do little or no test marketing?
A)
when the costs of developing and introducing the product are low
B)
when the new product requires a major investment
C)
44.
Which of the following statements is true of test marketing?
A)
When the costs of developing and introducing the product are low, the company will have to do significant test marketing.
B)
Test marketing is seldom done on products that are risky.
C)
The amount of test marketing needed remains constant for each new product.
D)
Test marketing is seldom done when management is not sure of the product or its marketing program.
E)
Test marketing costs can be high, and it takes time that may allow competitors to gain advantages.
Page Ref: 292
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Moderate
45.
In a ________, new products and marketing tactics are tested online in a virtual shopping environment.
A)
survey
B)
focus group
C)
46.
The major purpose of test marketing is to provide management with the information needed to make a final decision
about ________.
A)
Objective: 9-2
Difficulty: Moderate
47.
Introducing a new product into the market is called ________.
A)
simulation
B)
test marketing
C)
co-marketing
D)
segmentation
E)
commercialization
48.
P&G introduced its Duncan Hines ready-to-spread frosting in a small geographic area. When General Mills became aware
of the product, it rushed to market its own Betty Crocker ready-to-spread frosting, which eclipsed the Duncan Hines
product introduction. General Foods was able to enter the ________ stage of the new-product development process before
P&G could.
A)
idea screening
B)
idea generation
C)
simulation
D)
co-marketing
E)
commercialization
49.
Which of the following involves costs that most likely occur during the commercialization stage of new-product
development?
A)
50.
A company getting ready to launch a new product must make several decisions. The company must first decide on
________.
A)
51.
According to the commercialization stage of the new-product development process, following the decision to introduce
the new product at a particular time, a company must next decide ________.
A)
52.
Steelz Inc. has designed a process that manufactures an improved version of steel more efficiently, which will save the firm
both money and resources. In considering the launch of this new steel in the market, the firm must first decide on
________.
A)
location
B)
organizational structure
C)
product mix
D)
test marketing
E)
timing
53.
Which of the following focuses on finding new ways to solve customer problems and create more customer-satisfying
experiences?
A)
54.
Skyrim Corp. lacks the capital and capacity to launch its new helicopter for full national and international distribution. If
the test market results look promising, what should be management's next step?
A)
55.
________ is a new-product development approach in which one company department works to complete its stage of the
process before passing the new product along to the next department and stage.
A)
Vertical integration
D)
56.
Under a team-based new-product development approach, ________.
A)
a single departmental team works to complete different stages of the process before passing the new product along to the
next department and stage
B)
the organizational tension and confusion is less than under the sequential approach
C)
the new product passes from one department to another before finalizing
D)
57.
At Fantastic Flavors, a large regional chain of candy stores, employees from marketing, design, production, and finance
work in cross-functional groups to save time and money in the new-product development process. Fantastic Flavors uses a
________ approach.
A)
heuristic
functional
D)
E)
58.
Which of the following is the goal of the team-based new-product development approach when it uses cross-functional
teams that overlap the steps in the process?
A)
gain a big competitive edge by getting the right new products to market
E)
speed product distribution to market and reduce costs
Page Ref: 294
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Moderate
59.
Which of the following is a disadvantage of a team-based approach to new-product development?
A)
60.
According to the text, the search for new-product ideas should most likely be ________.
A)
compartmentalized
B)
segmented
flexible
D)
intermittent
holistic
C)
E)
61.
A company can install a(n) ________ management system to collect, review, evaluate, and manage new-product ideas.
A)
customer relationship
B)
content
C)
supply chain
D)
innovation
quality
E)
Skill: Concept
Objective: 9-2
Difficulty: Easy
62.
The innovation management system approach yields two favorable outcomes: it helps create an innovation-oriented
company culture, and it ________.
A)
63.
Which term refers to the course that a product's sales and profits take over its lifetime?
A)
service life
D)
64.
Which of the following best characterizes the decline stage of product development?
A)
increasing profits
D)
65.
Which of the following statements characterizes the introduction stage of the PLC?
A)
66.
Which stage in the product life cycle is characterized by rapid market acceptance and increasing profits?
A)
growth
maturity
B)
C)
introduction
D)
decline
E)
product development
67.
________ is the product life cycle period when sales fall off and profits drop.
A)
Product development
B)
Decline
Growth
Maturity
C)
D)
E)
Introduction
68.
Some products that have entered the decline stage have been cycled back to the growth stage through ________.
A)
dumping
B)
repositioning
C)
offshoring
D)
ambush marketing
E)
proximity mapping
69.
A style is best defined as a ________.
A)
Skill: Concept
Objective: 9-3
Difficulty: Easy
70.
The more formal "business attire" look of corporate dress of the 1980s and 1990s gave way to the "business casual" look of
the 2000s. This is an example of a ________.
A)
subculture
norm
B)
C)
fad
D)
style
E)
fashion
71.
Flurrbies, a brand of unique winter accessories that quickly fell in and out of favorability with customers, is an example of
a ________.
A)
subculture
fad
style
B)
C)
D)
fashion
norm
E)
72.
The PLC concept can be applied by marketers as a useful framework for describing how ________.
A)
73.
According to the PLC, the ________ stage is reached when sales plunge to zero, or when they drop to a low level where
they continue for many years.
A)
growth
laggard
B)
C)
maturity
D)
decline
E)
incubation
74.
Which of the following stages of the PLC is characterized with high promotional expenditures that result from an effort to
create consumer awareness?
A)
maturity
B)
introduction
growth
C)
D)
product development
E)
decline
75.
Which of the following stages of the PLC is characterized with the same level or slightly higher level of promotional
adoption
B)
growth
maturity
decline
C)
D)
E)
product development
76.
Kellogg's begins to sell its cereals in new markets after conducting extensive marketing research. After the cereal begins to
appear in these new markets, the company increases its promotion expenditure to check competition. Kellogg's is in the
________ stage of the product life cycle.
A)
adoption
B)
introduction
decline
maturity
growth
C)
D)
E)
Skill: Application
Objective: 9-3
Difficulty: Hard
77.
Big Moose Toys is a market pioneer introducing a modern version of Bubble the Moose, a character from an animated
television series originally broadcast in the '50s and '60s. The company's version of Sandy the Flying Squirrel, a character
from the show targeted to baby boomers, was a strong success. Since the firm is a market pioneer, it needs to make the
new launch strategy for Bubble consistent with the intended ________.
A)
product positioning
B)
brand extension
C)
prototype
fad
D)
E)
pricing
78.
Which stage in the PLC normally lasts longest and poses strong challenges to marketing managers?
A)
introduction
B)
decline
growth
C)
D)
adoption
maturity
E)
79.
Which of the following would lead to greater competition in the maturity stage of the PLC?
A)
overcapacity
B)
inadequate promotion
C)
diminishing budgets
D)
market pioneers
E)
poor management
80.
Most products in the marketplace are in the ________ stage of the product life cycle.
A)
development
B)
growth
maturity
decline
C)
D)
E)
introduction
81.
Apple's iPod has been called "one of the greatest consumer electronics hits of all time." iPods have been sold in huge
numbers, and Apple captures a large share of the music player market. This success has attracted many large, resourceful
competitors. The iPod is in the ________ stage of the product life cycle.
A)
adoption
B)
maturity
C)
product development
D)
decline
E)
introduction
82.
Over the past few years, Binney and Smith's Crayola crayons have been preferred by users in more than 80 countries
around the world. Crayola crayons are in the ________ stage of the PLC.
A)
decline
B)
incubation
laggard
C)
D)
introduction
E)
maturity
83.
When a product is in the maturity stage, the company should most likely consider ________.
A)
Objective: 9-3
Difficulty: Easy
84.
When Heinz introduced EZ Squirt packaging and new colors such as Blastin' Green and Awesome Orange to revitalize
consumer buying, the company was modifying the ________.
A)
competition
market
C)
distribution
product
B)
D)
E)
pricing strategy
85.
P&G has sold off a number of lesser or declining brands such as Oxydol detergent and Jif peanut butter. In these
examples, management decided to ________ the products.
A)
harvest
drop
maintain
B)
C)
D)
franchise
modify
E)
86.
Due to dropping sales, a company that manufactures soaps begins to sell them to restaurants and hotels to extend their
product's life. The soap manufacturer is in the ________ stage of PLC.
A)
introduction
B)
decline
growth
maturity
C)
D)
E)
development
87.
When Kraft focused on cost-cutting with its older, established brands, leaving them to wither without much investment or
modification, Kraft decided to ________ the older products.
A)
analyze
extend
modify
drop
B)
C)
D)
E)
harvest
88.
Manufacturers must comply with specific laws regarding ________.
A)
profit margins
E)
distribution channel length
Page Ref: 301-302
89.
Because of ________, a company cannot make its product illegally similar to a competitor's already established product.
A)
patent laws
B)
product liability
C)
anti-monopoly laws
D)
product warranties
E)
the Consumer Product Safety Act
90.
CellTones, a new company selling several types of cellular phones, has closely modeled its products after successful
products that are already in the marketplace. As it prepares to enter the market with its new products and services, which
of the following should concern CellTones the most?
A)
patent laws
D)
limited warranties
E)
product liability suits
91.
Which of the following best describes the role of a product steward?
A)
to protect the company from liability by proactively ferreting out potential product problems
E)
to develop a new-product concept into a physical product
Page Ref: 303
AACSB:
Skill: Concept
Objective: 9-4
Difficulty: Moderate
92.
Which of the following is a consequence of standardizing an international product?
A)
C)
image consistency
E)
higher marketing costs
93.
Evelyn's ________ is the practical use of solar power in a vacuum cleaner that is designed to effortlessly vacuum clean the
floors of on-the-go and elderly consumers.
A)
product concept
B)
product placement
C)
virtual product
D)
product idea
E)
product image
94.
Which of the following stages of the new-product development was Evelyn involved in when she set up a demonstration
booth to learn about consumers' feelings toward her vacuum cleaner?
A)
idea screening
B)
commercializing
C)
crowdsourcing
E)
concept testing
95.
Evelyn's vacuum is at the ________ stage of the product life cycle.
A)
laggard
growth
B)
C)
product development
D)
maturity
decline
E)
96.
A firm can obtain new products through acquisition or new-product development efforts.
Page Ref: 282
AACSB:
Skill: Concept
Objective: 9-1
Difficulty: Easy
97.
Acquisition involves the purchase of a whole company, a patent, or a license to produce someone else's product.
Page Ref: 284
AACSB:
Skill: Concept
Objective: 9-1
Difficulty: Easy
98.
New-product development begins with a systematic search for new product ideas through idea generation.
Page Ref: 285
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Easy
99.
Companies seldomly solicit ideas from customers during the idea generation stage of product development.
Page Ref: 286
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Easy
100.
A product idea is an idea for a possible product that a company can offer the market.
Page Ref: 287
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Easy
101.
Blair Housewares wants to add new products to its existing line of products. Managers are correct in believing that the
purpose of idea generation is to create a few ideas, and the purpose of succeeding stages is to increase that number.
Page Ref: 287
AACSB: Analytic Skills
Skill: Application
Objective: 9-2
Difficulty: Moderate
102.
Concept testing works best with people who are familiar with the new idea and the new product's purpose. This generally
includes top management, the sales force, and research and development.
Page Ref: 290
AACSB: Analytic Skills
Skill: Concept
Objective: 9-2
Difficulty: Moderate
103.
GreenTree Lawn and Garden Products is engaged in marketing strategy development. The first part of the marketing
strategy statement created by management should outline the product's planned price, distribution, and marketing
budget for the first year.
Page Ref: 290
AACSB: Analytic Skills
Skill: Application
Objective: 9-2
Difficulty: Moderate
104.
The business analysis stage represents the first large jump in financial investment in the new-product development
process.
Page Ref: 291
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Moderate
105.
GreenTree Lawn and Garden Products is engaged in a review of the sales, costs, and profit projections for some new
products to find out whether they satisfy the company's objectives. This activity is called business product development.
Page Ref: 291
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Easy
106.
Marketers often involve actual customers in product testing.
Page Ref: 292
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Easy
107.
A company launching a new product into the market must first decide where to launch the product.
Page Ref: 293
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Easy
108.
JumBo Games is in the commercialization stage. The first decision that the firm should make while introducing the
product in the market is introduction timing.
Page Ref: 293
AACSB: Analytic Skills
Skill: Application
Objective: 9-2
Difficulty: Moderate
109.
Sequential product development has the advantage of not only being a team-oriented approach, but also of being faster in
bringing products to market.
Page Ref: 294
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Moderate
110.
To avoid too few new-product ideas and the failure of many good ideas, management should install an innovation
management system that collects, reviews, evaluates, and manages new-product ideas.
Page Ref: 294
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Moderate
111.
Using the PLC concept to develop marketing strategy can be problematic because strategy is both a cause and a result of
the product's life cycle.
Page Ref: 297
AACSB:
Skill: Concept
Objective: 9-3
Difficulty: Moderate
112.
Profits drop during the growth stage of the PLC because per customer promotion costs are high.
Page Ref: 298
AACSB:
Skill: Concept
Objective: 9-3
Difficulty: Moderate
113.
Although products that remain in the maturity stage of the PLC seem unchanged, the most successful ones actually evolve
to meet changing consumer needs.
Page Ref: 298
AACSB:
Skill: Concept
Objective: 9-3
Difficulty: Moderate
114.
When sales of a product drop during the decline stage of the PLC, a company typically modifies the marketing mix, the
product, or the market.
Page Ref: 299
AACSB:
Skill: Concept
Objective: 9-3
Difficulty: Moderate
115.
Sales of products decline because of technological advances, shifts in consumer tastes, and increased competition.
Page Ref: 299
AACSB:
Skill: Concept
Objective: 9-3
Difficulty: Easy
116.
Harvesting the product involves reducing various costs such as maintenance, R&D, and advertising to increase sales.
Page Ref: 299, 301
AACSB:
Skill: Concept
Objective: 9-3
Difficulty: Easy
117.
The distribution strategy during the decline stage of PLC involves building more intensive distribution networks.
Page Ref: 302
AACSB:
Skill: Concept
Objective: 9-3
Difficulty: Moderate
118.
The federal government may prevent a company from adding products through acquisitions if acquisition threatens to
lessen competition.
Page Ref: 301
AACSB: Ethical Understanding and Reasoning Abilities
Skill: Concept
Objective: 9-4
Difficulty: Moderate
119.
The international growth of many professional and business services such as accounting, consulting, and advertising led
to the globalization of the client companies they served.
Page Ref: 303-304
AACSB: Dynamics of the Global Economy
Skill: Concept
Objective: 9-4
Difficulty: Moderate
120.
Explain the reasons for the failure of new products. What methods can a company adopt to improve its odds of newproduct success?
Page Ref: 285
AACSB:
Skill: Concept
Objective: 9-1
Difficulty: Moderate
121.
Briefly describe the steps in the new-product development process.
Page Ref: 285-293
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Moderate
122.
Provide the major sources of external new-product ideas and explain why these sources offer advantages over internal
sources.
Page Ref: 286
AACSB: Dynamics of the Global Economy
Skill: Concept
Objective: 9-2
Difficulty: Moderate
123.
Differentiate between a product idea, a product concept, and a product image.
Page Ref: 289
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Easy
124.
Explain concept testing.
125.
Define commercialization. Explain two important decisions the company must make during this stage.
Page Ref: 293
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Moderate
126.
What are the two advantages of an innovation management system for developing new products? Provide four strategies
for a company to use to establish a successful system.
Page Ref: 294-295
AACSB: Analytic Skills
Skill: Concept
Objective: 9-2
Difficulty: Moderate
127.
Each product will have a life cycle, although its exact shape and length is not known in advance. Briefly explain each
phase of the product life cycle.
Page Ref: 295-296
AACSB:
Skill: Concept
Objective: 9-3
Difficulty: Moderate
128.
Explain why the PLC can be applied to more than just brands.
Page Ref: 296-297
AACSB: Analytic Skills
Skill: Application
Objective: 9-3
Difficulty: Moderate
129.
Describe three public policy issues or regulations that marketers should carefully consider as they make decisions about
adding or dropping products.
Page Ref: 301-303
AACSB: Ethical Understanding and Reasoning Abilities
Skill: Concept
Objective: 9-4
Difficulty: Moderate
130.
How might a firm benefit from implementing an "intrapreneurial" program?
Page Ref: 285
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Moderate
131.
Why are competitors considered a good external idea source?
Page Ref: 286
AACSB: Analytic Skills
Skill: Concept
Objective: 9-2
Difficulty: Moderate
132.
What elements may help to create a product image?
Page Ref: 289
AACSB: Communication Abilities
Skill: Concept
Objective: 9-2
Difficulty: Moderate
133.
The potential sales, costs, and profit projections are being determined for a new-product idea at Art for Kids. Which of the
following stages of the new-product development process does this illustrate?
Page Ref: 291
AACSB: Analytic Skills
Skill: Application
Objective: 9-2
Difficulty: Easy
134.
What factors are assessed in test marketing?
Page Ref: 292
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Moderate
135.
A marketer has selected a single city in which to conduct a test market. What can be concluded from this choice of a
single-city test market?
Page Ref: 292
AACSB: Analytic Skills
Skill: Application
Objective: 9-2
Difficulty: Moderate
136.
A marketer has chosen a multiple-city test market. What can be concluded from this choice of a multiple-city test market?
Page Ref: 292
AACSB: Analytic Skills
Skill: Application
Objective: 9-2
Difficulty: Moderate
137.
Differentiate between controlled test markets and simulated test markets.
Page Ref: 292
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Moderate
138.
Why might individual departments prefer sequential product development?
Page Ref: 294
AACSB:
Skill: Concept
Objective: 9-2
Difficulty: Easy
139.
Explain how the PLC applies differently to a product class than to a product form.
Page Ref: 296
AACSB:
Skill: Concept
Objective: 9-3
Difficulty: Moderate
140.
Why are ad expenditures high for products in the introduction stage of the PLC?
Page Ref: 297
AACSB:
Skill: Concept
Objective: 9-3
Difficulty: Easy
141.
Why do ad expenditures remain high in the growth stage of the PLC?
Page Ref: 298
AACSB:
Skill: Concept
Objective: 9-3
Difficulty: Easy
142.
Marketers can prolong the lives of many products in the maturity or decline stages of the PLC, sometimes even moving
these products back into the growth stage. How is this undertaken?
Page Ref: 298
AACSB:
Skill: Concept
Objective: 9-3
Difficulty: Moderate
143.
Why has the cost of product liability insurance risen so dramatically?
Page Ref: 302
AACSB: Ethical Understanding and Reasoning Abilities
Skill: Concept
Objective: 9-4
Difficulty: Moderate
1.
A
2.
B
3.
A
4.
B
5.
B
6.
B
7.
D
8.
A
9.
D
10.
B
11.
E
12.
E
13.
D
14.
D
15.
D
16.
D
17.
C
18.
A
19.
D
20.
E
21.
22.
A
23.
A
24.
B
25.
C
26.
B
27.
E
28.
D
29.
A
30.
B
31.
D
32.
D
33.
B
34.
35.
D
36.
E
37.
A
38.
A
39.
C
40.
B
41.
E
42.
C
43.
A
44.
E
45.
E
46.
A
47.
E
48.
E
49.
A
50.
E
51.
A
52.
53.
E
54.
D
55.
D
56.
D
57.
B
58.
C
59.
C
60.
E
61.
D
62.
D
63.
D
64.
E
65.
66.
A
67.
B
68.
B
69.
A
70.
E
71.
B
72.
A
73.
D
74.
B
75.
B
76.
E
77.
A
78.
E
79.
A
80.
C
81.
B
82.
E
83.
84.
D
85.
B
86.
B
87.
E
88.
C
89.
A
90.
C
91.
D
92.
D
93.
A
94.
E
95.
C
96.
TRUE
97.
TRUE
98.
TRUE
99.
FALSE
100.
TRUE
101.
FALSE
102.
FALSE
103.
FALSE
104.
FALSE
105.
FALSE
106.
TRUE
107.
FALSE
108.
TRUE
109.
FALSE
110.
TRUE
111.
TRUE
112.
FALSE
113.
TRUE
114.
FALSE
115.
TRUE
116.
TRUE
117.
FALSE
118.
TRUE
119.
FALSE
120.
Although an idea may be good, the market size may have been overestimated. Other possible reasons for failure include
the following: the actual product was not designed as well as it should have been; the product may have been incorrectly
positioned in the market, priced too high, or advertised poorly; a high-level executive might have pushed a favorite idea
despite poor marketing research findings; the costs of product development were higher than expected; or competitors
fought back harder than expected. One way to improve the odds is to identify successful new products and find out what
they have in common. Another is to study new-product features to see what lessons can be learned. A company must
understand its customers, markets, and competitors and deliver superior value to customers.
121.
New-product development starts with idea generation from internal and/or external sources. Next, the ideas must be
reduced through idea screening. Once the new ideas are decided upon, the product concept must be developed and
tested. A marketing strategy must be developed to introduce the product to the market. Once the product concept and
marketing strategy are chosen, a business analysis is conducted to review the sales, costs, and profit projections to see if
they will satisfy the company's objectives. Next, a prototype will be created in the product development stage. Test
marketing will follow, introducing the new product and its marketing program into more realistic market settings. The
last step is to launch or not launch the new product. If the company decides to launch the product, it will go ahead with
the commercialization stage and later test its sales and profit results.
122.
The major external sources of new-product ideas include customers, suppliers and distributors, competitors, and research
firms. These sources are close to the market and tend to reflect current tastes and preferences. Firms can better match their
product offerings to customer needs and wants.
123.
A product idea is an idea for a product that a company can imagine itself offering to the market. A product concept takes
the idea several steps further, with a detailed version of the idea stated in meaningful consumer terms. Finally, a product
image is the way consumers perceive an actual or potential product.
124.
Concept testing calls for testing new-product concepts with groups of target consumers. The concepts may be presented to
consumers physically or symbolically. A more concrete and physical presentation, however, will increase the reliability of
the concept test. After being exposed to the concept, consumers are asked questions about it; their answers reveal to the
marketer whether the concept needs to be altered in any way.
125.
Introducing a new product into the market is called commercialization. The company launching a new product must first
decide on introduction timing. Next, the company must decide where to launch the new productin a single location, a
region, the national market, or the international market. Confidence, capital, and capacity are required to launch new
products on a large-scale basis. Hence, many firms plan a market rollout over time.
126.
The first advantage of an innovation management system is that it helps create an innovation-oriented company culture. It
shows that top management supports, encourages, and rewards innovation. The second advantage is that it will yield a
larger number of new-product ideas, among which will be found some especially good ones. As the system matures,
ideas will flow more freely. To establish a successful system a company can do the following: (1) appoint a respected
senior person to be the company's innovation manager; (2) create a cross-functional innovation management committee
with people from each department; (3) set up a Web site for anyone who wants to become involved in finding and
developing new products; (4) encourage all company stakeholders to send their ideas to the idea manager; and (5) set up
formal recognition programs to reward those who contribute the best new ideas.
127.
Product development begins when the company finds and develops a new-product idea. Sales are zero and the company's
investment costs mount. Introduction is a period of slow sales growth as the product is introduced in the market. Profits
are nonexistent in this stage because of the heavy expenses of product introduction. Growth is a period of rapid market
acceptance and increasing profits. Maturity is a period of slowdown in sales growth because the product has achieved
acceptance by most potential buyers. Profits level off or decline because of increased marketing outlays to defend the
product against competition. Decline is the period when sales fall off and profits drop. A company may seek to
reinvigorate a product in decline or maintain it hoping competition will diminish or harvest it or drop it.
128.
The PLC can be applied to new products and services. It can also be applied to product class, a product form, or a brand.
The PLC concept lends itself to styles, fashions, and fads. The concept can be used as a useful framework for describing
how products and markets work, as well as developing marketing strategy for each stage of the product life cycle.
Managers may have difficulties using the PLC concept to forecast product performance or develop general marketing
strategies.
129.
The government may prevent companies from adding products through acquisitions if the effect threatens to lessen
competition. On the other hand, companies dropping products must be aware that they have legal obligations to their
suppliers, dealers, and customers who have a stake in the dropped product. Companies must also obey U.S. patent laws
when developing new products, meaning that a company cannot make its product illegally similar to another company's
established product. Manufacturers must also comply with specific laws regarding product quality and safety. The Federal
Food, Drug, and Cosmetic Act and the Consumer Product Safety Act are just two of many laws that protect consumers
from potentially harmful products. If consumers have been injured by a product that has a defective design, they can sue
manufacturers or dealers.
130.
Many companies have developed successful internal social networks and intrapreneurial programs that encourage
employees to develop new-product ideas. For example, Twitter hosts an annual "Hack Week: Let's Hack Together" event,
which actively promotes internal innovation through experimentation around the company.
131.
Marketers can pay particular attention to competitors' ads to get clues about their new products. They buy competing new
products, take them apart to see how they work, analyze their sales, and decide whether they should bring out a new
product of their own.
132.
A product image is the way consumers perceive an actual or potential product. Any number of product attributes, as well
as packaging and intended use, create product image; the promotional campaign also affects product image.
133.
The projections for potential sales, costs, and profits occurs in the business analysis stage of the new-product development
process.
134.
Test marketing lets a company assess customer response to its product and the effectiveness of its positioning strategy,
advertising, distribution, pricing, branding, and packaging.
135.
The marketer may be confident that consumers in that city are representative of the overall market.
136.
The marketer likely understands that the product being tested will be perceived differently in different geographic
regions.
137.
In controlled test markets new products and tactics are tested among controlled panels of shoppers and stores. Using
simulated test markets, researchers measure consumer responses to new products and marketing tactics in laboratory
stores or simulated online shopping environments. Both controlled test markets and simulated test markets reduce the
costs of test marketing and speed up the process.
138.
This process allows each individual department to work with a new idea, completing its stage of development before
passing the product on to the next department and stage; other departments are less likely to interfere.
139.
Product classes have longer life cycles, while product forms tend to have the standard PLC shape.
140.
Consumers have very little awareness about such products; promotional spending can enhance customer awareness.
141.
Though sales are increasing for such products, competition becomes fierce as competitors attempt to enter the market;
therefore, ad expenses remain high in an effort to offset competitive threats.
142.
Marketers can change any element of the marketing mix, find new users and new market segments for its brands, change
characteristics such as quality, features, style, packaging, or technology platforms, and so on.
143.
Consumers who have been injured by a product with a defective design can sue manufacturers or dealers of the product;
though manufacturers are only found to be at fault in a small percentage of cases, the average jury award is $1.5 million.
This litigation phenomenon has resulted in huge increases in product liability insurance premiums, causing big problems
in some industries.