Deck 12: Developing and Managing Products

Question 1

A market development strategy concentrates on developing new products for existing markets.

Answer 1

False

Question 2

In the awareness phase of the consumer adoption process, consumers make a trial purchase of an item to determine its usefulness.

Answer 2

False

Question 3

A _____ strategy focuses on developing entirely new products for new markets.

A) market penetration
B) market development
C) product development
D) product diversification

Answer 3

D

Question 4

A product diversification strategy focuses on developing entirely new products for new markets.

Question 5

Consumer innovators are individuals who rely on the experiences of initial buyers before making trial purchases.

Question 6

A company sent free samples of its new shampoo to a researched list of potential customers. This strategy is most likely to accelerate the evaluation and trial stages of the consumer adoption process.

Question 7

Dali Stationery and Office Supplies is a market leader in China. The company wants to expand its business and is setting up retail chains in other Asian countries. Which of the following new-product development strategies is being used by the company in the above scenario?

A) Market development strategy
B) Market penetration strategy
C) Product development strategy
D) Product diversification strategy

Question 8

Even if a new product tests well in the market and reaches the commercialization stage, it may still take a while to catch on with the general public.

Question 9

A _____ strategy concentrates on finding new markets for existing products.

A) market penetration
B) market development
C) product development
D) product diversification

Question 10

The diffusion process focuses on the speed at which an innovative product is accepted or rejected by all members of a community or social system.

Question 11

If potential buyers can observe an innovation's superiority in a tangible form, the adoption rate increases.

Question 12

A market penetration strategy seeks to increase sales of existing products in existing markets.

Question 13

More than 90 percent of cereal is consumed at breakfast, but ads for Kellogg's Cracklin' Oat Bran say that it tastes like oatmeal cookies and makes "a great snack anytime." Kellogg's is implementing a strategy of _____ with this product.

A) market penetration
B) market development
C) product development
D) product diversification

Question 14

Apex Corp. has been manufacturing furniture for past several years. Now in order to grow its business, the company has decided to manufacture curtains and bed sheets. The strategy being used by the company to target new markets is referred to as a _____.

A) product association strategy
B) market simulation strategy
C) market engagement strategy
D) product diversification strategy

Question 15

Annie's Inc., which produces vinegar for cooking purposes, identified new uses for its product and started promoting it as a fabric softener and a cleansing product. The company started selling the same product in different packages modified for different types of uses. This strategy used by Annie's to increase the sales of its product is an example of a _____ strategy.

A) brand extension
B) line engagement
C) market penetration
D) product diversification

Question 16

The screening and business analysis stages of new-product development determine the product's financial and technical requirements.

Question 17

Compared to first adopters, later adopters rely more heavily on impersonal information sources while purchasing new products.

Question 18

The consumer adoption process spans from awareness of a product to its acceptance or rejection after a purchase has been made.

Question 19

The _____ strategy seeks to increase sales of existing products in existing markets.

A) product development
B) market innovation
C) product diversification
D) market penetration

Question 20

Companies test market their new-product offerings to measure consumer reactions under normal competitive conditions.

Question 21

At the _____ stage in the consumer adoption process, potential buyers begin to seek information about the product.

A) trial
B) evaluation
C) interest
D) adoption

Question 22

Responding to moviegoers' recently renewed interest in the 3D format, Panasonic introduced the world's first 3D home entertainment system. This strategy used by Panasonic is an example of a _____.

A) market engagement strategy
B) market simulation strategy
C) product development strategy
D) product association strategy

Question 23

The first step in the new-product development process is:

A) screening.
B) development.
C) idea generation.
D) business analysis.

Question 24

The purpose of test marketing new-product offerings is to:

A) separate ideas with commercial potential from those that will not meet company objectives.
B) subject the product idea to additional study prior to its actual development.
C) verify that the product will perform well in a real-life environment.
D) evaluate the compatibility of the product with organizational resources.

Question 25

With reference to the five characteristics of a product innovation, a product innovation is said to have a greater _____, if it is superior to previous ideas reflected in terms of lower price, physical improvements, or ease of use.

A) associability
B) compatibility
C) relative advantage
D) observability

Question 26

Individuals who purchase new products almost as soon as these products reach the market are called _____.

A) late adopters
B) laggards
C) consumer innovators
D) hesitant buyers

Question 27

Describe the stages involved in the consumer adoption process.

Question 28

Colin owns a dog food business, but wants to develop a canine fashion line as a way of expanding his portfolio and increasing sales and profits. One of the things customers love about Colin's company is that all of the products are manufactured locally, creating jobs for young people. Though he does not have a lot of money and hopes that he won't have to hire new staff, he thinks he might have to. Rather than developing a canine fashion line, which of the following alternatives can you suggest to Colin?

A) Colin should use cannibalization strategy.
B) Colin should use a market penetration strategy.
C) Colin should outsource his company's jobs to cut costs.
D) Colin should consider selling his business to a larger pet food company.
E) Colin should hire a marketing company to help him promote his products.

Question 29

The business analysis stage generates extremely important information for new-product development as:

A) collecting information from different sources to generate new ideas.
B) turning the original concept into a product.
C) verifying if the product will perform well in a real-life environment.
D) assessing how the product can be differentiated from the competition.

Question 30

A new-product innovation that is consistent with the values and experiences of potential adopters and attracts new buyers at a relatively rapid rate is said to have high _____.

A) complexity
B) observability
C) compatibility
D) transparency

Question 31

Discuss the steps involved in the new-product development process.

Question 32

Briefly describe the four new-product development strategies.

Question 33

At the _____ stage in the consumer adoption process, buyers consider the likely benefits of the product.

A) awareness
B) trial
C) interest
D) evaluation

Question 34

The process by which new goods or services are accepted in the marketplace is known as the _____ process.

A) extension
B) referencing
C) diffusion
D) polarization

Question 35

List out the characteristics of product innovation that influence its adoption rate.

Question 36

When Microsoft introduced the latest edition of Age of Empires III, it provided a free download of one of the game scenarios. Addition of this link is most likely to influence which of the following characteristics of the product innovation?

A) Complexity
B) Associability
C) Possibility of trial use
D) Compatibility

Question 37

Which of the following is most likely to be true of consumer innovators?

A) They are unlikely to display brand loyalty toward products.
B) As compared to later adopters, they are less likely to take risks.
C) They tend to be the most highly educated of the consumer groups.
D) They are less mobile, and do not prefer changing jobs often.

Question 38

Which of the following terms refers to a series of stages consumers go through in learning about a new product, trying it, and deciding whether to purchase it again?

A) Product life cycle
B) Adoption process
C) Product development process
D) Diffusion process

Question 39

During which of the following stages of a new-product development process, ideas with commercial potential are separated from those not meeting company objectives?

A) Idea generation
B) Business analysis
C) Screening
D) Test marketing

Question 40

In the context of the consumer diffusion process, "_____" constitute the final group of consumers that make trial purchases of a new product.

A) innovators
B) late majority
C) early purchasers
D) laggards

Question 41

Marcia's company is at the commercialization stage of new-product development. Before company executives move forward with this stage, what advice can you give them?

A) Focus on the cannibalization of existing products.
B) Focus on the promotional mix rather than the distribution mix.
C) The marketing mix should be planned before the selection of the target market.
D) The launch date should coincide with a good economic situation to maximize sales.
E) Target only opinion leaders because they are the ones who will spend the most money on the product.

Question 42

Internal analysis involves gathering information about the benchmark partner to find out why the partner is perceived as the industry's best.

Question 43

Aldi is a chain of discount supermarkets based in Germany. The company has recently started opening stores across the United States. Based on this information, the product development strategy being pursued by Aldi is known as a _______ strategy.

A) market penetration
B) market development
C) product penetration
D) product development
E) diversification

Question 44

Your company recently released an ad campaign to promote its new tablet. Shortly thereafter, your company publishes a series of blogs and articles about the product and sets up hotlines so people can call in to find out more information about the product and its release date. At which stage of the adoption process are consumers operating?

A) Trial
B) Interest
C) Evaluation
D) Awareness
E) Adoption

Question 45

Marta's company wants to revamp its potato chips brand to compete with Lay's potato chips. She has been researching consumer preferences so that she can market her company's chips accordingly. What type of strategy is Marta using?

A) Product diversification strategy
B) Product development strategy
C) Market development strategy
D) Product positioning strategy
E) Market penetration strategy

Question 46

Ramon is a sales representative for a medical device company and works with orthopedic surgeons. During his discussions with surgeons about their work and the type of tools or devices that would help them perform better, he began to receive several interesting suggestions that Ramon passed along to the new product-development team. What stage in the new-product development process does this represent?

A) Idea generation
B) Screening
C) Development
D) Test marketing

Question 47

The assortment of product lines and individual product offerings that a company sells is known as its product cluster.

Question 48

Service quality refers to the expected and perceived quality of a service offering.

Question 49

Benchmarking is utilized to assess quality by comparing performance against industry leaders.

Question 50

Marilyn is a grandmother to three and lives in Oklahoma City. She still uses her DVD player but her grand kids are wanting to watch shows on Netflix when they visit her house. She does have high-speed Internet access but does not yet have a Netflix account. However, she plans to subscribe to Netflix in the next several weeks. Netflix has over 40 million paid subscribers in the United States representing approximately 30% of total United States households. Netflix continues to add several million subscribers every quarter. Which category of "adopter" would best describe Marilyn?

A) Early majority
B) Consumer innovator
C) Early adopter
D) Laggard

Question 51

A service encounter is a point at which a consumer interacts with a service provider.

Question 52

​You launched the first ad campaign for your new nutrition bar just a few weeks ago, and are pleased to see hundreds of requests for more information about its ingredients on the company's Facebook page and Twitter account. The nutrition bar is most likely in which stage of the consumer adoption process?

A) ​Adoption
B) ​Evaluation
C) ​Awareness
D) ​Interest
E) ​Accelerated

Question 53

Internal analysis in the benchmarking process establishes a baseline for comparison.

Question 54

The right blend of product lines and individual products allows a firm to maximize sales opportunities within the limitations of its resources.

Question 55

A major manufacturer of men's shaving products has developed a prototype of an electric shaver featuring a vacuum attachment to capture virtually all hair. It's targeted to men who have facial hair - beards, mustaches, or goatees who like a trimmed appearance but dislike all the hairs that fall into the sink or bathroom counter top. The engineers create several prototypes and have members of their marketing research team gauge consumer response to the new product by conducting personal interviews with men who have facial hair. The company hopes that if the product is favorably received, the new product will be more successful in the marketplace. This is an example of:

A) concept testing.
B) screening.
C) test marketing.
D) commercialization.

Question 56

On a recent trip to the grocery store, Jackson noticed an in-store tasting event for a new line of yogurt-based dips. The store was providing product sampling and a coupon for 0.50 off the purchase price. Jackson tried the French Onion flavor and liked it so much he decided to purchase it for an upcoming party at his home. Which characteristic influencing adoption rates does this represent?

A) Possibility of trial use
B) Complexity
C) Relative advantage
D) Observability

Question 57

The Florida Orange Juice Growers and their ad agency utilized the slogan, "It's not just for breakfast anymore" to motivate consumers to drink more orange juice by having current orange juice drinkers enjoy the beverage throughout the day hoping this would increase demand and sales of orange juice. This strategy is called:

A) market penetration.
B) product development.
C) market development.
D) product diversification.

Question 58

The depth of product mix refers to the variations in each product the firm markets in its mix.

Question 59

You are the manager for the consumer product adoption strategies department of your firm. Your job requires you to manage the third stage of the five-stage consumer product adoption process. Which of the following statements is true in regard to your job focus?

A) You should focus on making sure buyers are aware of your product's existence.
B) You should focus on encouraging the current buyers of your product to become repeat buyers.
C) You should focus on making sure buyers clearly understand your product's benefits.
D) You should focus on providing information about your product.
E) You should focus on encouraging buyers to just try your product.

Question 60

The Gillette Company has a long history of developing shaving-related products for men and women. In addition, it continuously produces products that feature improvements to existing technologies, including three-bladed disposable razors and ergonomically superior handle designs. ​
To maintain its success in new-product development, Gillette regularly organizes several small focus groups comprising people who shave in order to gain insights into what these individuals look for in a razor/blades/shaving system. At which step of the new-product development process is Gillette when it conducts these focus groups?

A) Idea generation step
B) Commercialization step
C) Development step
D) Business analysis step
E) Screening step

Question 61

External analysis, conducted during the process of benchmarking, involves:

A) establishing a baseline for comparison with industry leaders.
B) identifying business processes that need improvement.
C) identifying the strengths and weaknesses of the firm's internal processes.
D) gathering information about competing firms perceived as leading performers.

Question 62

Variations in each product a firm markets in its mix are referred to as the _____ of its product mix.

A) width
B) length
C) depth
D) volume

Question 63

Promotional campaigns conducted by a firm during the introductory stage of a product lifecycle generally focus on:

A) informing the market about the product and explaining its features.
B) reducing the size of the available market through selective advertising.
C) comparing the firm's product with those of competitors.
D) communicating new and alternate uses for the product.

Question 64

Promoting the use of oatmeal as a cholesterol reducer and antacids as a calcium supplement is most likely to be examples of extending the lifecycle of the product by:

A) improving product quality.
B) changing package sizes.
C) increasing the frequency of use.
D) finding new uses.

Question 65

Which of the following variables of service quality best represents the service provider's understanding of the customer's needs?

A) Tangibles
B) Assurances
C) Empathy
D) Reliability

Question 66

Delectable, a fast food chain, emphasizes a lot on things like how the staffs are dressed, how the food is presented, as well as cleanliness of their service area. According to this information, Delectable is focusing on which of the following variables of service quality?

A) Assurances
B) Responsiveness
C) Tangibles
D) Empathy

Question 67

The assortment of product lines and individual product offerings a company sells is called its product _____.

A) mix
B) cluster
C) pack
D) bunch

Question 68

In the maturity stage of a product lifecycle, differences between competing products diminish as competitors discover the product and promotional characteristics most desired by customers.

Question 69

Zara Inc., a well-known cosmetics manufacturer, introduced its anti-wrinkle cream in the Asian market after its sales in the European market leveled out due to stiff competition from rival products. This is an attempt to extend product lifecycle by:

A) increasing the frequency of use.
B) increasing the number of users.
C) finding new uses.
D) changing product quality.

Question 70

The term service _____ refers to the point at which the customer and service provider interact.

A) encounter
B) locus
C) platform
D) zone

Question 71

In the maturity stage, heavy promotional outlays emphasize any differences still separating competing products, and brand competition intensifies.

Question 72

Which of the following statements is true regarding the maturity stage of the product lifecycle?

A) It is the second stage of the product lifecycle.
B) Since the product is unknown to the public during this stage, the promotional campaigns stress information about its features.
C) During this stage, differences between competing products diminish.
D) It is characterized by rapid growth in the volume of sales.

Question 73

Tina is a customer service representative for an Internet service provider. While dealing with elderly customers, Tina takes extra time and effort in explaining to them how to access the Internet, check emails, and browse the Web. She understands their viewpoint, and realizes that they may need more explanation than the tech-savvy, younger generation. By doing so, which of the following variables of service quality is being demonstrated by Tina?

A) Associability
B) Tangibles
C) Empathy
D) Substitutability

Question 74

Which of the following is the first main activity involved in benchmarking?

A) Comparing internal processes to those of industry's performance leaders
B) Identifying the strengths and weaknesses of a firm's internal processes
C) Implementing changes for quality improvement
D) Identifying critical market segments

Question 75

Rangers, a firm that provides a towing service, boasts of a very consistent performance track record and promises a quick and good quality service "anytime, anywhere." According to this information, Rangers is focusing on which of the following variables of service quality?

A) Reliability
B) Sympathy
C) Empathy
D) Substitutability

Question 76

Define Total Quality Management (TQM) and ISO 9001:2008. Give examples of some companies that you know of as certified by ISO.

Question 77

_____ involves measuring quality by comparing performance against an external industry leaders or competitor firm.

A) Benchmarking
B) Social referencing
C) Satisficing
D) Social loafing

Question 78

Special Confectioners, a major chocolate company, has recently started promoting its festive packs with the tag line, "making each moment special." By doing so, the management is trying to make its customers realize the everyday relevance of their festive packs. In doing so, the company is attempting to extend the product lifecycle by:

A) increasing the number of users.
B) finding new uses for the product.
C) changing product quality.
D) increasing the frequency of use.

Question 79

Which of the following variables of service quality best represents the readiness to serve one's customers?

A) Tangibles
B) Assurances
C) Responsiveness
D) Empathy

Question 80

Product lifecycles can stretch indefinitely as a result of decisions designed to increase the frequency of use by current customers; increase the number of users for the product; or change package sizes, labels, or product quality.