Question 1

Evans and Hills has developed a new line of specialty teas positioned directly against its competitor,Milton Brews.Evans and Hills has pitched its plan to recapture its lost market share on this line of specialty teas and is seeking regular inputs from the test marketing process.To facilitate this process,it is using BuyerScan,a software that generates store-by-store,week-by-week reports on the actual sales of tested products and the impact of in-store and in-home marketing efforts.This scenario illustrates the ________.
A)traditional test marketing approach
B)just-in-time inventory tracking approach
C)controlled test market approach
D)simulated test approach
E)direct commercialization approach

Accepted Answer

This scenario describes a controlled test market approach, where the company is testing a new line of specialty teas using a software that generates sales reports on a weekly basis. This approach allows for regular inputs and tracking of the impact of in-store and in-home marketing efforts.

Question 2

Which of the following statements is true of the PLC?
A)Throughout the product introduction stage, sales are zero.
B)During the product decline stage, sales and profits drop in an identical manner.
C)Profits are nonexistent in the growth stage.
D)Growth is a period of rapid rise in sales but profits are lower than sales.
E)Maturity is the period when sales fall off but profits continue to rise.

Accepted Answer

During the growth stage of the Product Life Cycle (PLC), sales increase rapidly, and profits typically rise as well, but they may not increase at the same rate as sales due to increased competition and marketing expenses.

Question 3

Fads are characterized by their ________.
A)enduring nature spanning several generations
B)minor popularity and consumer acceptance
C)unusually high sales and rapid decline
D)basic and distinctive modes of expression that seldom become unpopular
E)non-attainment of the last two stages of the product life cycle

Accepted Answer

Fads are typically characterized by a sudden surge in popularity, followed by a rapid decline. They are not enduring and do not last across generations. They often have a short lifecycle because they are based on novelty or trendiness and lack substance or meaningful differentiation.

Question 4

Wayne Industries is building a new prototype riding lawnmower especially for women.The marketing strategy for the product has been developed and presented.The lawnmower is now being tested rigorously.This step will ensure that the product meets all the CPSC product specifications and leaves little chance for any product liability issues.Which of the following statements is true with regard to the current stage of product development that the lawnmower is in?
A)The new lawnmower is at the introductory stage of the lifecycle.
B)The new-product idea is at the last stage of the development process.
C)At this stage, the functional features and the intended psychological characteristics are combined.
D)The new product at this stage can be distributed through a full-scale roll-out immediately.
E)After this stage, no changes can be made in any aspect of the product design, features, or composition.

Accepted Answer

At this stage of rigorous testing, the functional features and intended psychological characteristics of the product are combined, ensuring that the product meets all CPSC product specifications. This implies that the product is in the testing stage of the product development process, where the product is thoroughly checked for suitability and functionality before heading to the commercialization stage. Hence, option C is the correct answer.

Option A is incorrect because the introductory stage is when the product is launched into the market. Option B is incorrect, as the product is not in the ideation stage, but in the testing stage. Option D is incorrect because, at this stage, the product is still being tested, and any issues arising from the tests may require modification before full-scale rollout. Option E is incorrect because changes can be made at various stages of product development, including after the testing stage, depending on the results of product testing.

Question 5

Habers and Mills had developed a new range of home appliances called Green Home.These appliances had a certification stating that they minimized CFC emissions and energy consumption.The company planned to release the Green Home appliances in 52 stores across 20 countries where Habers and Mills had its stores or franchisees.Though the test marketing process for the Green Home line of products had been completed well ahead of time and the new products were ready for commercialization,the company waited three months to release the final product line on the World Environment Day.Which of the following considerations explains the manner in which Habers and Mills released the Green Home line of appliances?
A)whether to launch the product in a single location
B)whether to launch the product in a region
C)whether to launch the product into full national distribution
D)when to time the new product introduction
E)when to develop a planned market rollout

Accepted Answer

The company waited three months to release the final product line on the World Environment Day, indicating that the timing of the new product introduction was a key consideration for Habers and Mills.

Question 6

The major purpose of test marketing is to provide management with the information needed to make a final decision about ________.
A)the market strategy to be used
B)which target market to compete in
C)whether to launch the new product
D)how aggressively it should compete in the market
E)the time taken to commercialize the product

Accepted Answer

Test marketing is used to gather additional data about a product before it is launched to the general market. The purpose of this is to help management make a final decision about whether or not to launch the product. Therefore, the best choice is C, which says that the purpose is to decide whether to launch the new product. The other choices may be considered as factors that influence this decision but are not the main purpose of test marketing.

Question 7

At Fantastic Flavors,a large regional chain of candy stores,employees from marketing,design,production,and finance work in a cross-functional group to save time and money in the new-product development process.Fantastic Flavors uses a(n)________ approach.
A)intradepartmental new-product development
B)sequential new-product development
C)team-based new-product development
D)simulated test market
E)controlled test market

Accepted Answer

The scenario describes the use of a cross-functional group working together, which is a characteristic of team-based new-product development. This approach is aimed at reducing costs and saving time by involving different departments and skills in the development process. Therefore, option C is the best choice. The other options, such as intradepartmental and sequential new-product development, do not involve cross-functional teams, and the test market options are not mentioned in the scenario.

Question 8

Which of the following is a definition of style?
A)a temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity
B)a basic and distinctive mode of expression
C)a currently accepted or popular style in a given field
D)a trend that serves as a market pioneer for a very short duration
E)a trend that represents transient consumer choices relating exclusively to minor goods and services

Accepted Answer

Style is a basic and distinctive mode of expression, whether it is in fashion, art, literature, or any other field. It refers to the unique and recognizable features that characterize a particular work or product, making it different from others. The term "style" can also refer to the way something is created, designed, or presented, including the use of language, imagery, color, texture, and other elements.

Question 9

Introducing a new product into the market is called ________.
A)test marketing
B)segmentation
C)experimenting
D)commercialization
E)market penetration

Accepted Answer

Commercialization is the process of introducing a new product into the market. It involves producing and launching the product, as well as promoting and selling it to the target audience. Test marketing is a part of the commercialization process, where a small group of people is selected to try the product before it is launched to the general public. Segmentation is the process of dividing the market into smaller groups based on similar needs, preferences, or characteristics. Experimenting is a broader term that can refer to any kind of testing or trial in order to gather information or insights. Market penetration refers to the strategy of increasing a company's market share by selling more of its existing products to its current customers or to new customers in its current market.

Question 10

Anita's DayCare plans to offer third-shift childcare,based upon the opening of two new manufacturing plants in the area.Together the plants will hire 423 employees and run all three shifts.Initial test marketing results look promising.To launch this new service,Anita must first decide on ________.
A)timing
B)employee schedules
C)identifying suitable new employees
D)local and state regulations
E)menu offerings

Accepted Answer

The answer of Anita's DayCare plans to offer third-shift childcare,based...

Question 11

Which of the following is a disadvantage of a team-based approach to new-product development?
A)It takes longer to get the right products to market.
B)The development effort is not as effective because of team members' lack of expertise.
C)The approach is hindered by a lack of integration between different departmental functions.
D)Organizational confusion and tension can affect the process.
E)The process does not work for products with shorter life cycles.

Accepted Answer

A team-based approach to new-product development can lead to organizational confusion and tension, which can ultimately affect the process. However, it is not necessarily true that it takes longer to get the right products to market, that development efforts are less effective, that there is a lack of integration between different departmental functions, or that the process does not work for products with shorter life cycles.

Question 12

The ________ is used to study the course of a product's sales and profits for the duration that it is produced and sold in the market.
A)sequential product development process
B)product life cycle
C)business analysis
D)vendor analysis
E)portfolio analysis

Accepted Answer

The product life cycle (PLC) is a concept used to study the different stages that a product goes through over its lifespan. These stages are introduction, growth, maturity, and decline. By analyzing a product's sales and profits during each stage, businesses can make more informed decisions about marketing strategies, pricing, and resource allocation.

Question 13

Top management can install a(n)________ to direct the flow of new-product ideas to a central point where they can be collected,reviewed,and evaluated.
A)idea evaluation system
B)innovation management system
C)database
D)EIS
E)data processing system

Accepted Answer

An innovation management system is specifically designed to gather and analyze new product ideas from various sources, including employees, customers, and partners. This type of system provides a formalized process for evaluating and prioritizing ideas, allowing top management to make informed decisions about which products to pursue. Option A, an idea evaluation system, is a component of an innovation management system and does not fully capture the scope of the question. Option C and E, a database and data processing system, are generic terms that may be used to describe different types of systems and are not specific to new product development. Option D, an Executive Information System, is a computer-based system that provides top-level executives with easy access to critical business information, but it is not specifically designed to manage new product ideas.

Question 14

Some products that have entered the decline stage can be cycled back to the growth stage through ________.
A)concept testing
B)test marketing
C)sole sourcing
D)repositioning
E)data mining

Accepted Answer

Repositioning involves changing a product's positioning in the market to appeal to a new target audience or to highlight a new feature or benefit. This can help revitalize a product and bring it back into the growth stage. The other options are not directly relevant to driving a product back to growth stage.

Question 15

In the ________ stage of new-product development,products undergo rigorous tests to make sure that they perform safely and effectively or that consumers will find value in them.
A)business analysis
B)idea generation
C)concept development and testing
D)product development
E)marketing mix

Accepted Answer

The stage where products undergo rigorous tests to ensure safe and effective performance or for consumers to find value in them is called product development. Therefore, option D is the best choice.

Question 16

Wayne Industries is building a new prototype riding lawnmower especially for women.The marketing strategy for the product has been developed and presented.The lawnmower is now being tested rigorously.This step will ensure that the product meets all the CPSC product specifications and leaves little chance for any product liability issues.Once the prototype of the lawnmower passes product tests,the next step is ________.
A)test marketing
B)portfolio analysis
C)commercialization
D)internal marketing
E)business analysis

Accepted Answer

Test marketing is the next step after product testing to evaluate the product's performance in a real market setting before full-scale commercialization.

Question 17

________ 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)Cross-sectional product development
B)Simultaneous product development
C)Sequential product development
D)Product life-cycle analysis
E)Internal product marketing

Accepted Answer

Sequential product development 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. This approach is also known as the traditional approach to product development.

Question 18

The team-based new-product development approach is faster because departments work closely together through ________.
A)divisional teams
B)traditional teams
C)self-reference groups
D)cross-functional teams
E)departmental teams

Accepted Answer

Cross-functional teams are composed of members from different departments who work together on a project. This approach facilitates communication and collaboration, which leads to faster decision-making and product development.

Question 19

Under what circumstances might it be wise for a company to do little or no test marketing?
A)when a new product requires a major investment
B)when management is unsure of the projected demand for the product
C)when management is implementing a mass marketing program
D)when the product has no substitutes and is new in its category
E)when the costs of developing and introducing the product are low

Accepted Answer

When the costs of developing and introducing the product are low, the financial risk is minimized, making it less critical to conduct extensive test marketing.

Question 20

Which of the following costs is most likely associated with the commercialization stage of new-product development?
A)building or renting a manufacturing facility
B)paying groups of consumers for participating in crowdsourcing activities
C)determining the product's planned price, distribution, and marketing budget
D)developing a prototype of the product
E)identifying target markets

Accepted Answer

During the commercialization stage, a company needs to produce the product at scale, which often involves building or renting a manufacturing facility.

Quiz 8: Developing New Products and Managing the Product Life Cycle

Which of the following statements is true of the PLC?

Fads are characterized by their ________.

The major purpose of test marketing is to provide management with the information needed to make a final decision about ________.

At Fantastic Flavors,a large regional chain of candy stores,employees from marketing,design,production,and finance work in a cross-functional group to save time and money in the new-product development process.Fantastic Flavors uses a(n) ________ approach.

Which of the following is a definition of style?

Introducing a new product into the market is called ________.

Anita's DayCare plans to offer third-shift childcare,based upon the opening of two new manufacturing plants in the area.Together the plants will hire 423 employees and run all three shifts.Initial test marketing results look promising.To launch this new service,Anita must first decide on ________.

Which of the following is a disadvantage of a team-based approach to new-product development?

The ________ is used to study the course of a product's sales and profits for the duration that it is produced and sold in the market.

Top management can install a(n) ________ to direct the flow of new-product ideas to a central point where they can be collected,reviewed,and evaluated.

Some products that have entered the decline stage can be cycled back to the growth stage through ________.

In the ________ stage of new-product development,products undergo rigorous tests to make sure that they perform safely and effectively or that consumers will find value in them.

________ 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.

The team-based new-product development approach is faster because departments work closely together through ________.

Under what circumstances might it be wise for a company to do little or no test marketing?

Which of the following costs is most likely associated with the commercialization stage of new-product development?