Deck 11: Developing and Managing Products

Question 1

The development of a garlic-butter flavored crescent rolls by Pillsbury would not be considered a new product since the company was already making crescent rolls.It would simply be called a line extension.

Answer 1

False
Line extensions are considered to be a type of new product.

Question 2

One benefit of test marketing is that the marketing activity is shielded from competitors.

Answer 2

False
Test marketing may result in a serious problem if a firm's competitors find out about the new product before it has been fully introduced.

Question 3

Andersen Electronics is currently engrossed in its first estimations of costs and revenues for a new amusement park video skill game.This firm is engaged in a new-product business analysis.

Answer 3

True

Question 4

Concepts tests are considered fairly good predictors of success for line extensions and for products that do not require major changes in consumer behavior.

Question 5

Central Bark is a dog day care center.When you check your dog into a Central Bark you know your pooch will be pampered.Since kennels have been boarding dogs for years,the dog day care is not really a new product.

Question 6

Basically,all that happens in the development stage of the new-product process is that the first prototype of the product gets developed.

Question 7

The most important factor in successful new-product introductions is a good match between product and market needs.

Question 8

Very few firms follow a formal new-product development process.

Question 9

Most new-product ideas are rejected at the idea generation stage.

Question 10

Increasing globalization of markets and of competition provides a reason for multinational firms to consider new-product development from a worldwide perspective.

Question 11

For a firm that adheres to the product concept,the logical place to start generating new-product ideas is with the customers of the firm.

Question 12

The two techniques that are considered most useful for generating new-product ideas are customer-generation and competitive imitation.

Question 13

A product must be a discontinuous innovation to be considered a "new" product.

Question 14

One advantage for being first on the market with a new product is more resale opportunities.

Question 15

Seven employees from a company are trying to come up with ideas for new-product development.The employees are all in a room together,shouting out potential ideas.The ideas are written down and evaluated as they are generated.This is an example of brainstorming.

Question 16

It is considered inefficient to use concept tests during the idea screening stage of the new-product development process.

Question 17

Adaptation is the process by which the adoption of an innovation spreads.

Question 18

A test market is one example of a laboratory test where consumers are encouraged to try a new product and provide feedback to the manufacturer.

Question 19

The Internet offers a fast,cost-effective way to conduct test marketing.

Question 20

A firm's new-product strategy links the new-product development process with the objectives of the marketing departments,the business unit,and the corporation.

Question 21

Profits typically reach their peak during the growth stage of the product life cycle.

Question 22

Many products may experience short-term fluctuations in sales,but a long-term drop in sales probably signifies that a product is in the decline stage of the product life cycle.

Question 23

Oakley,a manufacturer of protective eyewear for various kinds of sports,has introduced sunglasses that play music.The glasses weigh just a few ounces and can hold up to 120 songs.These sunglasses would be an example of a(n):

A) repositioning strategy
B) new product line
C) addition to an existing product line
D) discontinuous innovation
E) revision to existing products

Question 24

During the maturity stage of the product life cycle,marginal competitors start dropping out of the market.

Question 25

Marketers consider all of the following examples of new products EXCEPT:

A) a 2010 model year automobile with the same style,parts,and color as the 2009 model
B) the addition of a management consultant service to a company that once specialized in investment management
C) a new design for Reach brand toothbrushes
D) a new flavor of Ben & Jerry's brand ice cream
E) the development of a less-painful procedure for the treatment of varicose veins

Question 26

The product life cycle concept encourages marketing managers to act reactively.

Question 27

The product life cycle is a biological metaphor that traces the stages of a product's acceptance,from its introduction (birth)to its decline (death).

Question 28

When Procter & Gamble wanted to enter the hair care market,it purchased Wella,a leading German company specializing in hair care products.What new product category does this acquisition represent for P&G?

A) repositioning strategy
B) new product line
C) addition to an existing product line
D) discontinuous innovation
E) revision to existing products

Question 29

Being first on the market with a new product has a number of advantages,including all the following EXCEPT:

A) increased sales through longer sales life
B) immediate profit
C) more resale opportunities
D) increased product loyalty
E) greater market responsiveness

Question 30

Procter & Gamble is introducing a new fabric softener dispenser that consumers stick to the inside of the dryer drum and plans to send consumers free samples in the mail.This strategy will likely increase the rate of adoption of the new product.

Question 31

Consumers described as laggards tend to rely on group norms when deciding to adopt an innovation.

Question 32

New-to-the-world products,where the product category itself is new,are also called:

A) discontinuous innovations
B) moderate innovations
C) slow-diffusing products
D) venture products
E) creative offerings

Question 33

Which of the following would be considered a new product?

A) new product lines
B) new-to-the-world product
C) addition to existing product lines
D) improvements or revisions to existing products
E) all of these choice

Question 34

When Glade brand air freshener began marketing a clean linen-scented air spray,this represents which new product category?

A) repositioning strategy
B) new product line
C) addition to an existing product line
D) discontinuous innovation
E) revision to existing products

Question 35

Victorinex has long manufactured Swiss Army knives and developed a line of upscale Swiss Army watches.The Swiss Army brand gave the company credibility over other watch manufacturers and allowed the company to continue targeting sports-minded males between the ages of 18 and 35.Victorinex used which strategy to create new products?

A) new-to-the-world product
B) new product line
C) repositioned product
D) addition to a current product line
E) discontinuous innovation

Question 36

Heinz is expected to introduce more than 400 new products in the next two years.One of the products is a spicier ketchup aimed at the baby boomer market.The spicier ketchup would be considered what type of new product?

A) discontinuous innovation
B) new-to-market
C) new product line
D) lower-priced products
E) addition to existing product line

Question 37

Sony has developed a wireless speaker that sits unobtrusively on a desktop.The tiny,yet strong twin speakers use Bluetooth to stream music directly from your PC or MP3 player.This small Sony wireless speaker,which is radically different from anything currently on the market,would be classified as a(n):

A) discontinuous innovation
B) slow-diffusing product
C) episodic innovation
D) venture product
E) sporadic innovation

Question 38

The growth stage is the first stage of the product life cycle.

Question 39

The Sumatra Coffee Company has two new products.One is a simple hand-cranked coffee grinder.The other is a combination grinder and brewer that also can be used to dispense hot milk.Of these two,the hand-cranked grinder will probably be diffused more quickly because it is less complex.

Question 40

Increasing competition,aggressive brand advertising,and healthy profits are all characteristics found in the introductory stage of the product life cycle.

Question 41

Top managers at a commercial real estate firm that specializes in site location and installation of cellphone towers considered providing the same service for windmill location and installation but decided this was not within the company's corporate mission.Which stage of the new-product development process did its new-product development process reach?

A) development
B) idea generation
C) idea screening
D) business analysis
E) customer testing

Question 42

Which of the following is the LEAST likely source for new-product ideas?

A) a company's distributors
B) its customers
C) its employees
D) its financial lenders
E) its competitors

Question 43

_____ occurs when an existing product is targeted toward new market segments.It is another type of new-product development because the product is new to that segment.

A) Brainstorming
B) Diffusing
C) Repositioning
D) Screening
E) Reciprocity

Question 44

At what stage of the new-product development process are most new-product ideas rejected?

A) test marketing
B) diffusion
C) business analysis
D) idea screening
E) idea generation

Question 45

The first stage of the new-product development process is:

A) screening and concept testing
B) establishing the new-product strategy
C) exploring opportunities
D) developing a business analysis
E) the building of a prototype

Question 46

The screening and concept testing stage of the new-product development process is used to:

A) eliminate undesirable ideas and predict consumer acceptance
B) refine the promotion campaign to be used with the new product
C) determine the potential profits to be gained from the new product
D) determine how long the test market should be run
E) generate new-product ideas

Question 47

Mosaic Labs has developed a chemical compound that prevents mildew in even the most humid climates.The week after the compound was invented,a group of the firm's employees got together and listed ways the product might be used.This is an example of:

A) focusing grouping
B) brainstorming
C) concept testing
D) venture group activities
E) screening

Question 48

For years,Diet Dr.Pepper has been considered a diet drink.After declining sales,the company is attempting to present Diet Dr.Pepper as an alternative to having a dessert.This is an example of a _____ strategy.

A) discontinuous innovation
B) niche
C) new-product-line
D) retargeting
E) repositioning

Question 49

The process of converting applications for new technologies into marketable products is called:

A) basic research
B) product modification
C) marketing development
D) product development
E) correlation analysis

Question 50

A manufacturer of office furnishings is finding it difficult to compete with cheaper imported merchandise.Which of the following is a potential source of new-product ideas that would allow it to compete more effectively?

A) current retailers who carry the manufacturer's equipment
B) its foreign competitors
C) the company's employees
D) customers who have requested its catalogs
E) all of these

Question 51

A(n)_____ links the new-product development process with the objectives of the marketing department,business unit,and corporation.

A) product-review committee
B) concept test
C) episodic innovation
D) new-product strategy
E) product strategy bridge

Question 52

Which of the following stages of the new-product development process is the first filter in the new-product development process and serves to eliminate new-product ideas that are inconsistent with the organization's new-product strategy or are obviously inappropriate for some other reason?

A) applied diffusion
B) introductory diffusion
C) business analysis
D) test marketing
E) idea screening

Question 53

_____ is a process where a group thinks of as many ways to vary a product or solve a problem as possible without considering the practicality of the ideas.

A) New-product brain dumping
B) Screening
C) A focus-group interview
D) Brainstorming
E) Diffusion

Question 54

Companies that are most likely to succeed in the development and introduction of new products typically are characterized by all of the following EXCEPT:

A) establish an environment conducive to achieving new-product objectives
B) make the long-term commitment needed to support innovation and new-product development
C) capitalize on experience to achieve and maintain competitive advantage
D) use a company-specific approach that is driven by corporate objectives and strategies with a well-defined new-product strategy at its core
E) introduce ten new products every year

Question 55

The same manufacturer produces Hanes,Playtex,and Bali clothing for women.This manufacturer assembled a group of nine regular customers and asked them to discuss what they like and do not like about its current product line for full-figured women and to suggest new-product ideas,such as jewelry,wide shoes,and belts.The manufacturer used a research technique called a:

A) focus group
B) brainstorming session
C) buying center
D) product-review committee
E) venture team

Question 56

After the research team at Nabisco had generated more than two dozen new-product ideas for a substitute for partially hydrogenated oils that tastes the same but has zero trans fat,the company formed a committee to analyze whether the product ideas were consistent with the organization's new-product strategy.This is called:

A) business analysis
B) diffusion
C) idea screening
D) test marketing
E) idea generation

Question 57

_____ evaluate new-product ideas usually before any prototype has been created.

A) Concept tests
B) Simulated market tests
C) Market tests
D) User tests
E) Venture analyses

Question 58

A European dairy,which is famous for its rich ice creams,has introduced basil,tomato,fennel,and oregano flavored ice creams.In the process of developing these new flavors,the dairy surveyed world-famous chefs to determine which nontraditional flavors had the greatest level of marketability.This survey would have happened during which stage of the product development process?

A) concept testing
B) brainstorming
C) basic research
D) idea screening
E) applied research

Question 59

When Apple Inc.recently introduced the new version of it's iPhone 3G,it was twice as fast,and cost one half the price of the original iPhone.Since it was not trying to reach a new target market,Apple Inc.was using which new product strategy?

A) improved product
B) addition to an existing product line
C) discontinuous innovation
D) repositioned product
E) new product line

Question 60

A new-product strategy:

A) links the new-product development process with the objectives of the marketing department,the business unit,and the corporation
B) is part of an organization's overall marketing strategy
C) specifies the roles new products play in the organization's overall plans
D) describes the characteristics of products the organization wants to offer and the markets it wants to serve
E) is accurately described by all of these

Question 61

The final stage in the new-product development process is:

A) product testing
B) market testing
C) commercialization
D) product prototyping
E) simulated marketing

Question 62

During the _____ stage of the new-product development process,production starts,inventories are built up,the product is shipped to distribution points,the sales force is trained,and advertising and promotion begin.

A) commercialization
B) product testing
C) market analysis
D) product prototyping
E) simulated marketing

Question 63

In the _____ stage of new-product development,preliminary demand,cost,sales,and profitability estimates are made.

A) prototype screening
B) idea generation
C) concept testing
D) post-brainstorming
E) business analysis

Question 64

All of the following are reasons products fail EXCEPT:

A) overestimation of market size
B) poor match between product features and customer desires
C) a price too high or too low
D) direct distribution
E) not offering any discernible benefit compared to existing products

Question 65

After Mattel evaluated many new products to add to its Barbie product line and before any prototype was created,the toy manufacturer instructed a committee to select three of the ideas to present to a group of consumers.The consumer group was asked to evaluate the three product ideas in terms of their marketability.This stage of new-product development is called:

A) prototype screening
B) concept testing
C) market testing
D) idea manipulation
E) idea diffusing

Question 66

The maker of Purell hand sanitizer tested consumers' reactions to its Purell Sanitizing Wipes by getting consumers to look through a newspaper with grocery store ads,make out a grocery list,and then "shop" in a mock store filled with real products,including the new product.This is an example of a(n):

A) adoption-rate test
B) simulated (laboratory) market test
C) concept test
D) use test
E) juried consumer test

Question 67

In the _____ stage of new-product development,the technical feasibility of manufacturing the new product is examined as a prototype is produced.

A) screening
B) development
C) market testing
D) concept testing
E) business analysis

Question 68

The main goal of the global product development process is to:

A) come up with a single standard product or product line suitable for all global markets
B) expand the number of different new-product offerings so that individual country needs are more likely to be met
C) develop every product for potential worldwide distribution and adaptation to other countries
D) come up with new-product ideas in the United States and use global markets as test markets
E) repeat the steps in the process with marketing teams in each and every foreign country targeted

Question 69

What degree of failure occurs when a company cannot recoup its development,marketing,and production costs?

A) primary
B) secondary
C) absolute
D) conditional
E) relative

Question 70

_____ is a limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation.

A) Use testing
B) Test marketing
C) Concept testing
D) Laboratory testing
E) Discontinuous innovation

Question 71

Because Laurence did not know companies actually sold pet insurance so that owners could pay for operations on their pets in the event of a sickness or accident,he paid almost $4,000 to have his dog's broken hip replaced.Once he discovered such a product existed,he perceived the insurance to be a(n):

A) heterogeneous shopping product
B) diffusion
C) market laggard
D) product diversification
E) innovation

Question 72

Middleton has developed the Flybar 1200,an extreme pogo stick that propels users more than five feet into the air.During the _____ stage of its new-product development process,a group was assigned the task of estimating preliminary demand for the product,costs (including issues with liability),sales,and future profitability.

A) business analysis
B) idea generation
C) concept testing
D) screening
E) test marketing

Question 73

What degree of product failure results when the product returns a profit but fails to achieve sales,profit,or market share goals?

A) primary
B) secondary
C) absolute
D) conditional
E) relative

Question 74

A(n)_____ typically entails showing members of the product's target market advertising and other promotional materials for several products,including the test product.These people are then taken to a mock or real store where their purchases are recorded.

A) adoption-rate test
B) real test market
C) concept test
D) simulated (laboratory) market test
E) consumer juried test

Question 75

A team-oriented approach to new-product development is referred to as:

A) simultaneous product development
B) synergistic product development
C) commercialized product development
D) synchronized product development
E) parallel product development

Question 76

Which of the following statements about simultaneous product development is true?

A) Simultaneous product development refers to the practice of developing multiple new products at the same time.
B) With simultaneous product development,all relevant functional areas and outside suppliers participate in all stages of the new-product development process.
C) All departments within the company work together at the same time,but to maintain a high level of secrecy,no one outside the company is involved in simultaneous product development.
D) Simultaneous product development actually increases the length of time it takes to get a product to market and the time the product will stay in the growth stage of its product life cycle.
E) All of these statements about simultaneous product development are true.

Question 77

Firms that routinely experience success in new-product introduction tend to have:

A) strong leadership
B) a history of a sales orientation
C) an obsession with quantity rather than quality
D) an unwillingness to fail
E) all of the choices

Question 78

Which of the following has been found to be an efficient substitute for traditional methods of conducting test markets?

A) product sampling
B) simulated product adoption
C) online test marketing
D) simulated diffusion
E) market concentration

Question 79

A product that is perceived as new by a potential adopter,whether the product is "new to the world" or simply new to the individual,is a(n):

A) innovation
B) diffusion
C) discontinuous product
D) laggard
E) simulated new product

Question 80

When selecting a test market city,a researcher should look for a city:

A) where the demographics and purchasing habits mirror the overall market for the product
B) that has media spillover from other cities to increase media alternatives
C) that is as large as possible
D) that has limited distribution
E) where there is no competition