Deck 11: Developing and Managing Products

Question 1

In the early stage of development,the research and development or engineering department may develop a prototype of the product.

Answer 1

 True

Question 2

A firm that starts with a global strategy is better able to develop products that are marketable worldwide.

Answer 2

 True

Question 3

A product category includes all brands that satisfy a particular type of need.

Answer 3

 True

Question 4

Fournotts Corp.manufactures and sells accessories for cell phones.To boost its sales,the research and development team is involved in modifying the company's products.In this case,the research and development team will:

A)​eliminate products that are inconsistent with Fournotts Corp.'s business mission.
B)convert applications into marketable products.
C)make cosmetic or functional changes to existing products.
D)​add new products to supplement Fournotts Corp.'s established product line.

Question 5

Daily Farm,a food and beverage manufacturing firm,is known for its unique variety of table sauces.To provide more variations to its customers,Daily Farm recently launched an olive and pepper sauce.The olive and pepper sauce would fall under the category of improved products.

Question 6

Absolute failure occurs when a product returns a profit but fails to achieve sales,profit,or market share goals.

Question 7

An innovation is a product perceived as new by a potential adopter.

Question 8

A message developed for and targeted toward early adopters will be perceived similarly by late majority adopters.

Question 9

Unlike the growth stage of the product life cycle,emphasis switches from primary demand promotion to aggressive brand advertising and communication of the differences between brands in the introductory stage.

Question 10

Which of the following is an objective of focus group interviews?

A)​To stimulate insightful comments through group interaction
B)To directly involve customers in test marketing
C)To get recommendations of product ideas from outside consultants
D)​To eliminate ideas that are inconsistent with the organization's new-product strategy

Question 11

Hakimo Corp.,a manufacturer of audio equipment,has developed a unique wireless speaker system that runs on solar power.The speakers can operate for sixteen hours after being exposed to the sun for two hours.This new product,which is radically different from anything currently available in the market,would fall in the new product category of a:

A)​repositioned product.
B)revised product.
C)discontinuous innovation.
D)​new and improved product.

Question 12

Concept tests are used at the screening stage to rate concept or product alternatives.

Question 13

Many new product ideas are necessary to produce one successful new product.

Question 14

In the context of the new-product development process,which of the following is true of a new-product strategy?

A)​It refrains from adopting ideas suggested by customers and competitors.
B)It is the last stage of the new-product development process.
C)It must be compatible with the objectives of the marketing department, the business unit, and the corporation.
D)​It involves targeting existing products at new markets.

Question 15

The product life cycle for a brand is usually longer than the product life cycle for a product form.

Question 16

Which of the following statements is true of a customer innovation center?

A)​It is an approach to reposition a company's products.
B)It promotes status-conscious advertising among customers.
C)It is a forum for meeting with customers and directly involving them in the innovation process.
D)​It is used in the business analysis stage of the new-product development process.

Question 17

Fresnas Inc.manufactures and sells electronic equipment.The research and development team has generated ideas for new products,and the ideas pass through the screening stage.In this case,the goal of screening will be to:

A)​calculate preliminary figures for demand, cost, sales, and profitability.
B)eliminate ideas that are inconsistent with the organization's new-product strategy.
C)filter various prototypes of the products and select the most efficient one.
D)​set a limit on the number of members allowed to evaluate the new-product ideas.

Question 18

The growth stage of the product life cycle represents the full-scale launch of a new product into the marketplace.

Question 19

The maturity stage is the shortest stage of the product life cycle.

Question 20

A new-product strategy links the new-product development process with the objectives of the marketing department,the business unit,and the corporation.

Question 21

The objective of test marketing is:

A)​to implement simultaneous product development.
B)to shorten the development process of a product and reduce costs.
C)to evaluate alternative marketing strategies.
D)​to create three-dimensional prototypes quickly and at a relatively low cost.

Question 22

In the context of the new-product development process,which of the following statements is true of the business analysis stage?

A)​Depending on the nature of the product and the company, this process may be simple or complex.
B)Forecasting market share for a new entry in a new, fragmented, or relatively small niche market is easy.
C)The newness of the product, the size of the market, and the nature of the competition do not affect the accuracy of revenue projections.
D)​Costs increase dramatically once a product idea enters the business analysis stage.

Question 23

Which of the following is a characteristic of products produced by multinational corporations?

A)​Products are developed to meet unique market requirements whenever possible.
B)Products are developed to cater to local markets.
C)Products are inadequately distributed in local markets.
D)​Products are not subjected to test marketing.

Question 24

In the context of adopters who participate in the diffusion process,which of the following statements is true of the late majority?

A)​They are characterized as being venturesome.
B)They are more worldly and more active outside their community than noninnovators.
C)Their opinions heavily influence their friends and neighbors.
D)​Their adoption of a new product stems from pressure to conform to group norms.

Question 25

Which of the following statements best describes simultaneous product development?

A)​It is a strategy that provides general guidelines for generating, screening, and evaluating new-product ideas.
B)It is used to determine the reactions of potential customers in a market situation.
C)It is the process where all the involved areas work together rather than sequentially during a product's development.
D)​It is a strategy that links the new-product development process with the objectives of the marketing department, the business unit, and the corporation.

Question 26

In the context of the product characteristics that can be used to predict and explain the rate of acceptance and diffusion,the degree of difficulty involved in understanding and using a new product is known as _____.

A)​complexity
B)compatibility
C)observability
D)​trialability

Question 27

Which of the following is an advantage of simultaneous product development?

A)​It shortens the development process and reduces costs.
B)It eliminates the need for conducting laboratory tests on product prototypes.
C)It ensures that product development occurs in highly structured stages.
D)​It eliminates the need for test marketing a new product.

Question 28

In the context of adopters who participate in the diffusion process,which of the following statements is true of laggards?

A)​They act as an important link in the process of diffusing ideas.
B)They are more likely to get their information from scientific sources and experts.
C)They act as influencers and begin the viral marketing chain.
D)​They have the longest adoption time and the lowest socioeconomic status.

Question 29

Which of the following statements is true of the development stage of the new-product development process?

A)​Costs decrease dramatically once a product idea enters the development stage.
B)It involves evaluating a new-product idea before creating any prototype.
C)Simultaneous product development increases the time spent in the development process.
D)​It involves examining the feasibility of manufacturing a product at an acceptable cost.

Question 30

In the context of the rate of adoption,relative advantage is defined as the degree to which:

A)​a product is perceived as superior to existing substitutes.
B)a new product is consistent with existing values and product knowledge, past experiences, and current needs.
C)the benefits of using a product can be communicated to target customers.
D)​a product can be tried on a limited basis.

Question 31

Jenny,owner of an ice cream parlor,has been experimenting with different flavors to create a new exotic ice cream for her customers.After much deliberation and many tests,she decides to market the new Beet Cake with Black Walnut variant of ice cream.In this scenario,the chosen ice cream flavor has entered the _____ of the new-product development process.

A)​business analysis stage
B)development stage
C)test marketing stage
D)​commercialization stage

Question 32

The early majority is an important link in the process of diffusing new ideas because:

A)​they act as influencers and begin the viral marketing chain.
B)they are positioned between earlier and later adopters.
C)they are eager to try new ideas and products.
D)​they are characterized as being venturesome.

Question 33

In the context of adopters who participate in the diffusion process,a difference between early adopters and the early majority is that the early majority are:

A)​more likely to be opinion leaders.
B)less likely to extend the adoption process.
C)self-confident, and they rely less on group norms.
D)​likely to collect more information and evaluate more brands.

Question 34

Steven,a construction worker,always buys new gadgets because most of his friends have them.Besides,he relies on reviews from his friends rather than on the mass media to make his purchase decisions.It can be inferred that Steven belongs to the category of _____ in the diffusion process.

A)​laggards
B)innovators
C)the late majority
D)​the early majority

Question 35

Cleanz Inc.,a toiletries manufacturing firm,has launched a new range of natural sanitizing wipes.It wants to test its consumers' reactions to this new product in an economical way.Therefore,Cleanz Inc.sends out flyers to a few selected members of the target market,advertising several of its products along with the new product.Besides this,it also takes the members to a mock shop and monitors their shopping behavior.In this scenario,Cleanz Inc.is using _____.

A)​scanner-based research testing
B)simulated market testing
C)virtual test marketing
D)​traditional test marketing

Question 36

Roger,an affluent graduate,buys gadgets on the first day of their launch in the market.He reads expert reviews on the Internet,and he is not influenced by the opinions of his family and friends while choosing products.Roger would fall under the category of _____ in the diffusion process.

A)​the late majority
B)innovators
C)the early majority
D)​early adopters

Question 37

In the context of the new-product development process,the decision to market a product is made during _____.

A)​commercialization
B)test marketing
C)the development stage
D)​the business analysis stage

Question 38

For conducting an accurate test marketing,----_____.

A)​the media reach in test locations should be very high
B)the company should have limited distribution in test cities
C)test locations should mirror the purchasing habits of the overall market
D)​test marketing should expose the new product and its marketing mix to competitors

Question 39

Which of the following is the most important factor in successful new-product introduction?

A)​The features of the new product should be similar to its substitutes in the market.
B)The product should not be developed using crowdsourcing.
C)The new product should be priced lower than other products in the same category.
D)​The new product should deliver a meaningful and perceivable benefit to a sizable number of people.

Question 40

Steve,a retired man,wants to open a day care facility for dogs with his savings.After deciding on the services that he would be providing to his customers,he calculates the preliminary figures for demand,cost,sales,and profitability.After extensive deliberation,Steve decides to take credit from the bank for opening the facility as the initial investment cost estimates are too high.Steve is currently at the _____ of the new-product development process.

A)​commercialization stage
B)business analysis stage
C)idea generation stage
D)​test marketing stage

Question 41

What are the major implications of the new-product development process and the diffusion process to marketing managers?

Question 42

Marketing costs are high in the introductory stage of the product life cycle because:

A)​product design changes become stylistic rather than functional.
B)high dealer margins are often needed to obtain adequate distribution.
C)manufacturers scramble to sign up dealers and distributors.
D)​emphasis is given to communication of the differences between brands in the market.

Question 43

How is the Internet important for implementing simultaneous product development?

Question 44

_____ is the degree to which a product can be sampled on a limited basis.

A)​Compatibility
B)Trialability
C)Observability
D)​Complexity

Question 45

Nutrioats,an oatmeal cookie product,has been in the market for over seven years.However,the product is now in its decline stage.In this case,which of the following will be a successful strategy to market Nutrioats?

A)​Lengthening the product line
B)Focusing on adding new users
C)Spending heavily on advertising to educate consumers about the product's benefits
D)​Eliminating all nonessential marketing expenses and letting sales decline

Question 46

Identify a true statement about the maturity stage of the product life cycle (PLC).

A)​The beginning of this stage is signaled by increased sales.
B)Niche marketers that target the underserved segments of a market emerge during this stage.
C)It is the shortest stage of the PLC.
D)​Product design changes tend to become functional rather than stylistic.

Question 47

Which of the following statements is true of opinion leaders?

A)​They most likely belong to the late majority category of adopters.
B)They speed up the diffusion process through word-of-mouth communication.
C)They are distinguished by demographics.
D)​They have the longest adoption time and the lowest socioeconomic status.

Question 48

Explain the differences between innovators and early adopters.

Question 49

Magnira Corp.is an apparel manufacturing company.After an initial slow start,it saw a steep rise in its clientele and a remarkable increase in its profits.However,with the launch of other apparel manufacturers in the market,the profits of Magnira Corp.are declining now.In order to sustain its growth in the market,the managers of Magnira Corp.should:

A)​focus on primary demand stimulation rather than advertising the brand.
B)shift to aggressive brand advertising and open new branches.
C)suggest the management to reduce the number of employees in the company.
D)​distribute the company's products at limited outlets.

Question 50

How does a multinational corporation meet the needs of the global market?

Question 51

In the context of the product life cycle,a long-run drop in a product's sales signals the beginning of the _____.

A)​introductory stage
B)growth stage
C)maturity stage​
D)​decline stage

Question 52

Identify a true statement about the product life cycle (PLC).

A)​The PLC dictates the marketing strategy to be used for a product.
B)A product spends the same amount of time in the different stages of the life cycle.
C)The PLC for a product form is longer than the PLC for any one brand.
D)​Changes in a product, its uses, its image, or its positioning do not affect that product's life cycle.

Question 53

Explain absolute and relative product failure.Why do a large proportion of new product introductions fail?

Question 54

In which of the following ways does the product life cycle concept help marketing managers?

A)​It tells managers the length of a product's life cycle.
B)It can be used to analyze a brand, a product form, or a product category.
C)It dictates the marketing strategy to be used for a product.
D)​It informs marketers about the duration of a product in the various stages of its life cycle.

Question 55

Describe the growth stage of the product life cycle (PLC).