Question 1

The objective of test marketing is:

Accepted Answer

The objective of test marketing is to evaluate alternative marketing strategies, which involves launching a product or service on a small scale to assess the market response and determine the most effective marketing approach. Test marketing is often used to gauge consumer interest, test product features, and gather feedback to refine the marketing strategy before rolling out the product to a wider market. Options A, B, and D do not accurately describe the objective of test marketing.

Question 2

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

Accepted Answer

The business analysis stage can be simple or complex, depending on factors such as the nature of the product and the company. Therefore, statement A is true. B is false since forecasting market share for a new entry in a new, fragmented or relatively small niche market may be difficult. C is false because the newness of the product, the size of the market and the nature of the competition all affect the accuracy of revenue projections. D is false since costs do not necessarily increase dramatically once a product idea enters the business analysis stage.

Question 3

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

Accepted Answer

Multinational corporations often develop products to meet unique market requirements, adapting to different cultural, legal, and consumer preferences in various countries.

Question 4

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

Accepted Answer

The late majority are characterized as being skeptical and adopting a new product only under pressure to conform to group norms. They are not venturesome or active outside their community and their opinions do not heavily influence others.

Question 5

Which of the following statements best describes simultaneous product development?

Accepted Answer

Simultaneous product development is the process where all the involved areas work together rather than sequentially during a product's development, with the goal of reducing time-to-market and improving product quality.

Question 6

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 _____.

Accepted Answer

Complexity refers to the degree of difficulty involved in understanding and using a new product. It is one of the product characteristics that influences the rate of acceptance and diffusion. A product that is easy to understand and use is more likely to be accepted and diffuse quickly. On the other hand, a product that is complex and difficult to use may be rejected or take longer to diffuse.

Question 7

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

Accepted Answer

Simultaneous product development involves different stages of product development happening simultaneously as opposed to sequentially. This leads to a faster development process and reduces costs as multiple departments are working on the product simultaneously. Therefore, A is an advantage of simultaneous product development. B, C, and D are not advantages of simultaneous product development.

Question 8

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

Accepted Answer

Laggards have the lowest socioeconomic status and the longest adoption time, which means they are the last group to adopt an innovation. They are not influencers or the beginning of the viral marketing chain. They also do not get their information from scientific sources and experts as they tend to rely more on traditional information sources such as word-of-mouth recommendations from family and friends. Therefore, option D is the correct answer.

Question 9

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

Accepted Answer

The development stage of the new-product development process involves examining the feasibility of manufacturing a product at an acceptable cost. Costs are likely to increase during this stage, not decrease. Evaluating a new-product idea before creating any prototype is done in the idea generation stage. Simultaneous product development can decrease the time spent in the development process.

Question 10

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

Accepted Answer

Relative advantage is defined as the degree to which a product is perceived as superior to existing substitutes. This means that customers are more likely to adopt a new product if they believe it is better than what they are currently using.

Question 11

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.

Accepted Answer

The commercialization stage is when a product is introduced to the market after development and testing, which is what Jenny is doing by marketing the new flavor.

Question 12

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

Accepted Answer

The early majority is situated between the innovators and early adopters on one end and the late majority and laggards on the other end. This group is essential as they bridge the gap between the more risk-taking innovators and the more skeptical later adopters, helping to transition new ideas and products into the mainstream.

Question 13

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:

Accepted Answer

The early majority tend to be more deliberate in their decision making and collect more information than early adopters. They are also likely to evaluate more brands before making a purchase. Option A is incorrect as early adopters are usually opinion leaders, and option B is incorrect as early majority may extend the adoption process depending on their level of involvement. Option C is incorrect as the early majority tends to rely more on group norms and social pressure compared to early adopters who are more likely to be independent thinkers.

Question 14

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.

Accepted Answer

The answer of Steven,a construction worker,always buys new gadgets because...

Question 15

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 _____.

Accepted Answer

Cleanz Inc. is using simulated market testing by sending out flyers and taking members to a mock shop to monitor their shopping behavior, which is an economical way to test consumers' reactions to its new product. Scanner-based research testing involves tracking actual consumer purchases, virtual test marketing involves testing products in a simulated online shopping environment, and traditional test marketing involves launching a product in a limited geographical area to test consumer response.

Question 16

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.

Accepted Answer

Roger is described as someone who buys gadgets on the first day of their launch, which aligns with the characteristics of "innovators" in the diffusion process. Innovators are the first to adopt new products and are willing to take risks.

Question 17

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

Accepted Answer

The commercialization stage is the final stage of the new-product development process, during which the decision to launch and market the product is made. At this stage, the product has undergone development, testing, business analysis, and any necessary modifications or adjustments to ensure its success in the market. Therefore, the correct answer is (A) commercialization.

Question 18

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

Accepted Answer

Test locations should mirror the purchasing habits of the overall market to ensure that the results of the test marketing accurately predict the performance of the product in the larger market. Factors such as media reach and limited distribution may also be important, but they are not as critical as ensuring that the test locations are representative of the overall market. Exposing the new product and marketing mix to competitors is not advisable during test marketing, as it can compromise the validity of the results.

Question 19

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

Accepted Answer

The most important factor in successful new-product introduction is that the new product should deliver a meaningful and perceivable benefit to a sizable number of people. This is because customers are more likely to adopt a new product that provides value and meets their needs. While pricing and similarity to substitutes in the market are also important factors, they are not as crucial as delivering a meaningful benefit to the target market. Crowdsourcing can be an effective method for product development if done properly.

Question 20

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.

Accepted Answer

Steve is at the business analysis stage, where he has calculated the preliminary figures for demand, cost, sales, and profitability, and is exploring options for financing the venture. This stage involves evaluating the financial viability of the product or service and determining the investment required to launch it. The commercialization stage comes after the product has been developed and tested, and involves introducing it to the market. The idea generation stage is the beginning of the new-product development process, where new ideas are generated and evaluated. The test marketing stage involves testing the product in a small market to evaluate its performance and potential for success.

Quiz 11: Developing and Managing Products