Question 1

New product development adds value to a firm's products and services through innovation.

Accepted Answer

New product development involves introducing new and innovative products, which adds value to a firm's offerings by providing customers with something new and different. This can lead to increased sales, brand loyalty, and competitive advantage.

Question 2

New product development adds value to a firm's products and services through:
A)early majority substitution.
B)innovation.
C)removal of laggards.
D)pioneer pretesting.
E)beta concept testing.

Accepted Answer

New product development involves the introduction of innovative products or services, which can add value to a firm's portfolio. Innovation enables companies to stay competitive, attract new customers, and increase revenue by meeting changing market demands. This can lead to a sustainable competitive advantage and long-term success for the firm. Choices A, C, D, and E are not accurate in describing the benefits of new product development.

Question 3

Although innovation strategies may not work in the long run,overriding short-term reasons compel firms to introduce new products and services.

Accepted Answer

False

Question 4

A product will likely remain in the maturity stage of the product life cycle until a superior product comes along to replace it.

Accepted Answer

This is because during the maturity stage, the product has reached its maximum potential in terms of sales and profitability. It is still a profitable product, but growth has slowed down. The only way for a product to move out of the maturity stage is through innovation and development of a superior product that meets the changing needs and preferences of consumers.

Question 5

One of the key characteristics of brainstorming sessions is that bad ideas should be immediately rejected so the group can focus its attention on good ideas.

Accepted Answer

One of the key principles of brainstorming is to initially withhold judgment on any idea, good or bad, to encourage creativity and participation. Allowing all ideas to be heard without immediate criticism can often lead to the development of better ideas.

Question 6

The majority of new products are failures.

Accepted Answer

Research shows that around 80-90% of new products fail in the market.

Question 7

Compatibility is important for rapid diffusion of new products because products that are consistent with consumers' past behavior will be more readily accepted.

Accepted Answer

Compatibility refers to the extent to which a new product fits with consumers' past behavior and experience. If a product is compatible with consumers' past behavior, it will be more easily adopted and diffused, as consumers will be more likely to integrate it into their existing habits and routines. Therefore, compatibility is an important factor in the rapid diffusion of new products.

Question 8

To determine if a new product is commercially viable,a firm can conduct premarket testing.

Accepted Answer

Premarket testing is a common practice used by firms to evaluate a new product's potential in the market. It involves testing the product with a sample group of consumers to receive feedback on the product's performance, use, and appeal before it is commercially launched. This helps firms make informed decisions about whether or not to invest in the product and its marketing strategy.

Question 9

The diffusion of innovation curve follows the following sequence: innovators,early majority,early adopters,late majority and laggards.

Accepted Answer

The correct sequence is innovators, early adopters, early majority, late majority, and laggards.

Question 10

Even if they succeed,all consumers do not adopt new-to-the-world products at the same time.

Accepted Answer

This statement is true. The rate of adoption of new products can vary depending on various factors like consumer demographics, availability, perceived benefits, and cost. Some consumers may be early adopters, while others may take a longer time to adopt new products.

Question 11

The most challenging part of applying the product life cycle concept is that managers do not know exactly how long each stage of the cycle will last.

Accepted Answer

The duration of each stage in the product life cycle can vary greatly depending on factors such as market demand, competition, changes in technology, and consumer behavior. It is difficult to predict how long each stage will last with certainty.

Question 12

When consumers see their friends using an innovation,it often persuades them to try it too.

Accepted Answer

This statement is true. Social influence plays a significant role in the adoption of new innovations. When consumers see their friends or peers using a new product or service, it creates a sense of normative pressure to adopt the innovation as well. This phenomenon is known as social proof or social influence.

Question 13

The fact that the Apple iPad is easy to try--demo units are available at Apple stores as well as other retail stores--is helping it to diffuse more quickly.

Accepted Answer

The statement in the question is correct, as demo units being readily available makes it easier for people to try the device and potentially decide to purchase it, thus leading to faster diffusion.

Question 14

Test marketing refers to customers who modify existing products according to their own ideas to suit their specific needs.

Accepted Answer

Test marketing actually refers to the process of introducing a product to a small, representative group of consumers to assess its potential before a full launch. The given statement describes the concept of customization or personalization of products.

Question 15

New-to-the-world products that create new markets can add tremendous value to firms.

Accepted Answer

New-to-the-world products have the potential to create entirely new markets and can provide firms with a first-mover advantage, leading to increased revenue and profitability. Examples of such products include the iPod, the iPhone, and the Tesla Model S.

Question 16

________________ is the process by which ideas are transformed into new products and services that will help firms grow.
A)Beta testing
B)Concept testing
C)Innovation
D)Reverse engineering
E)The product life cycle

Accepted Answer

Innovation is the process of transforming ideas into new products and services that can help firms grow. Beta testing is a type of testing done on a product before its release, while concept testing involves evaluating a product or service concept with potential customers. Reverse engineering is the process of taking apart a product to see how it works, while the product life cycle refers to the stages a product goes through from introduction to decline.

Question 17

In the diffusion of innovation curve,the late majority is the final group of buyers to adopt an innovation.

Accepted Answer

The answer of In the diffusion of innovation curve,the late...

Question 18

The maturity phase of the product life cycle is characterized by greatly reduced competition.

Accepted Answer

The maturity phase of the product life cycle is actually characterized by increased competition from other similar products in the market.

Question 19

The diffusion of innovation curve proposes that purchasers can be divided into five groups.The first group consists of buyers who want to be the first on the block to have the new product; they are known as early adopters.

Accepted Answer

The answer of The diffusion of innovation curve proposes that...

Question 20

When Glenn asked a few of his regular customers to test his prototype surfboard,he was engaging in alpha testing.

Accepted Answer

The answer of When Glenn asked a few of his...

Quiz 11: Developing New Products