Question 1

Which of the following is the most likely circumstance for a company to decide to do little or no test marketing?
A) when the new product requires a major investment
B) when management lacks confidence in the new product
C) when management lacks confidence in the marketing strategy
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

If the costs of developing and introducing the product are low, the company may decide to skip test marketing to save on additional costs. Test marketing can also be skipped if the product has no substitutes and is new in its category, but this is less likely to be the most common reason for skipping test marketing. Choosing not to do test marketing because the product requires a major investment, because management lacks confidence in the new product, or because management lacks confidence in the marketing strategy are all risky decisions that could result in the failure of the product.

Question 2

All of the following are disadvantages of test marketing EXCEPT that test marketing ________.
A) is typically expensive
B) can be time consuming
C) enables competitors to gain advantages
D) encourages dishonesty among participants
E) fails to guarantee product success in the market

Accepted Answer

Test marketing does not encourage dishonesty among participants, but rather it provides valuable insight into consumer preferences and behavior. The other options are all valid disadvantages of test marketing.

Question 3

The product development stage requires ________.
A) a huge jump in investment
B) salespeople to contact potential customers
C) financial analysis
D) a few hours
E) management approval

Accepted Answer

The product development stage typically involves significant investment in resources such as research, design, prototyping, and testing, which requires a substantial financial commitment.

Question 4

Yummy Peanut Butter created a new coconut-flavored peanut butter that it tested in a small number of representative cities. The company plans to use the results to forecast national sales and profits. Which of the following did the firm use?
A) controlled test markets
B) simulated test markets
C) standard test markets
D) ambush marketing
E) affinity marketing

Accepted Answer

The firm used standard test markets, which involve testing a new product in a few representative cities to gather data and predict national sales and profits.

Question 5

A group of business entrepreneurs who worried about their teenage children drinking and driving decided there must be some way to approach this problem proactively. They came up with an idea for a pair of blurry goggles. They believed looking through the goggles would simulate what the world looks like when someone is seriously intoxicated. They developed a crude pair of blurry goggles to show prospective customers. This crude pair of goggles is known as a ________.
A) prototype
B) concept test
C) product concept
D) product image
E) product idea

Accepted Answer

The crude pair of blurry goggles developed by the business entrepreneurs is a prototype. A prototype is a preliminary model of something that provides an idea of how the final product will look or function.

Question 6

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

Accepted Answer

The product development stage of new product development is where products undergo rigorous tests to ensure they are safe, effective and valuable to the consumer. This stage involves creating prototypes, testing for safety and quality, and finalizing product specifications before launching the product into the market.

Question 7

In a ________, new products and marketing tactics are tested online in a virtual shopping environment.
A) controlled test market
B) simulated test market
C) standard test market
D) focus group
E) survey

Accepted Answer

A simulated test market allows companies to test new products and marketing tactics online in a virtual environment. This type of market research is less costly and faster than traditional test markets, which involve launching products in a limited geographic area. Controlled and standard test markets both involve real-world testing, while focus groups and surveys are different methods of gathering feedback from consumers.

Question 8

Once the prototype of Wainwright Industries' new riding lawnmower, made especially for women, passes product tests, the next step is ________.
A) test marketing
B) focus group surveys
C) commercialization
D) concept testing
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 9

Which of the following statements is true of test marketing?
A) The amount of test marketing needed remains constant for each new product.
B) When the costs of developing and introducing the product are low, the company will have to do significant test marketing.
C) Test marketing is seldom done on products that are risky.
D) Test marketing is seldom done when management is not sure of the product or its marketing program.
E) Test marketing costs can be high, and it takes time that may allow competitors to gain advantages.

Accepted Answer

Test marketing can be costly and time-consuming, which can give competitors a chance to gain an advantage. Therefore, it is not usually done on products that are low-risk or when management is confident in the product or its marketing program. Additionally, the amount of test marketing needed can vary depending on the product and its development costs.

Question 10

Which figures does the company use to analyze the new product's financial attractiveness?
A) size of population
B) expected market share
C) number of competitors
D) anticipated number of options
E) sales and costs

Accepted Answer

The figures used to analyze the new product's financial attractiveness are sales and costs. The size of population, expected market share, number of competitors, and anticipated number of options may provide useful background information, but the financial attractiveness of a new product ultimately depends on its sales and costs.

Question 11

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

Accepted Answer

Commercialization is the process of introducing a new product into the market. Test marketing is a type of market research done to test the product's viability, co-marketing is a marketing strategy where two or more companies collaborate on a promotional campaign, segmentation is the process of dividing the market into smaller groups, and simulation is a method of replicating a real-life situation for experimental or education purposes.

Question 12

In a(n) ________, new products and marketing tactics are tested among specifically identified groups of customers and stores.
A) controlled test market
B) simulated test market
C) standard test market
D) systematic sample
E) accidental sample

Accepted Answer

In a controlled test market, companies select specific groups of customers and stores to test new products and marketing tactics. This allows them to closely monitor and control the testing process, ensuring accurate results without the risk of interference from outside factors. Simulated test markets use computer modeling, standard test markets use randomly selected geographic areas, and systematic and accidental samples are sampling methods used in research but not specifically related to testing new products and marketing tactics.

Question 13

The major purpose of test marketing is to provide management with the information needed to make a final decision about ________.
A) the entire marketing program
B) which market to compete in
C) whether to launch the new product
D) how to compete in the market
E) how long to compete in the market

Accepted Answer

The answer of The major purpose of test marketing is...

Question 14

A company getting ready to launch a new product must make several decisions. The company must first decide on ________.
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 introduce the product
E) when to develop a planned market rollout

Accepted Answer

The first decision in launching a new product is determining the timing of the introduction, as it impacts market readiness, competition, and resource allocation.

Question 15

Which of the following involves costs that most likely occur during the commercialization stage of new product development?
A) building or renting a manufacturing facility
B) paying target customers for product feedback
C) determining the product's planned distribution
D) developing a prototype of the product
E) identifying target markets

Accepted Answer

Building or renting a manufacturing facility is a cost that is typically associated with the commercialization stage of new product development. This is because, during this stage, the product is ready for mass production and distribution, which requires a facility to manufacture the product at scale. The other options, such as paying target customers for feedback, identifying target markets, determining distribution, and developing a prototype, are typically associated with earlier stages of new product development.

Question 16

In a(n) ________, consumers interact with new products and marketing tactics in laboratory stores or virtual online shopping environments.
A) standard test market
B) focus group
C) controlled test market
D) simulated test market
E) individual survey

Accepted Answer

The description best matches a simulated test market, where consumers interact with new products and marketing tactics in virtual shopping environments. A standard test market involves testing a product or marketing tactic in a real market setting, a controlled test market involves limiting the distribution of a product to certain stores or regions, a focus group involves a small group of individuals discussing their opinions and feelings about a product, and an individual survey involves gathering data from a large number of individuals through questionnaires or interviews.

Question 17

Neutron Inc. is conducting a business analysis to determine which of the many newly developed apps should be released. To estimate sales, the company must ________.
A) conduct surveys of competitors
B) exclusively consider the government's opinions
C) consider the sales history of similar products
D) apply the PLC concept to industry sales
E) opt for business process reengineering

Accepted Answer

To estimate sales, the company should consider the sales history of similar products. This will give an idea about the demand and market size for similar apps in the industry. Surveys of competitors and the government's opinions can be helpful in understanding the market and competition, but they are not the primary factor for estimating sales. Applying the Product Life Cycle (PLC) concept to industry sales and opting for business process reengineering are not directly related to estimating sales.

Question 18

Starbucks introduced a less-than-perfect mobile payments app, then worked out the flaws after the launch. The company chose speed to market over a perfect app at introduction. This illustrates ________.
A) why many companies engage in crowdsourcing
B) the influence of fast-changing market developments
C) why prototypes are so important
D) how idea screening can make a product a commercial success
E) the importance of different sources for idea generation

Accepted Answer

The scenario described highlights the influence of fast-changing market developments, which pushed Starbucks to prioritize speed to market over a perfect app.

Question 19

Which of the following stages of the new product development process occurs immediately after the completion of the business analysis for the product or service?
A) idea screening
B) product development
C) product activation
D) marketing strategy development
E) product design

Accepted Answer

The product development stage occurs immediately after the completion of the business analysis, where the company develops a prototype or a detailed version of the product or service. In this stage, the company evaluates and improves the prototype before launching the final product.

Question 20

P&G introduced its Duncan Hines ready-to-spread frosting in a small geographic area. When General Mills became aware of the product, it rushed to market its own Betty Crocker ready-to-spread frosting, which eclipsed the Duncan Hines product introduction. General Foods was able to enter the ________ stage of the new product development process before P&G could.
A) commercialization
B) co-marketing
C) idea generation
D) idea screening
E) simulation

Accepted Answer

General Foods was able to enter the commercialization stage of new product development before P&G could, as General Mills quickly introduced its own competing product and took over the market.

Quiz 9: Developing New Products and Managing the Product Life Cycle

Which of the following is the most likely circumstance for a company to decide to do little or no test marketing?

All of the following are disadvantages of test marketing EXCEPT that test marketing ________.

The product development stage requires ________.

Yummy Peanut Butter created a new coconut-flavored peanut butter that it tested in a small number of representative cities. The company plans to use the results to forecast national sales and profits. Which of the following did the firm use?

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

In a ________, new products and marketing tactics are tested online in a virtual shopping environment.

Once the prototype of Wainwright Industries' new riding lawnmower, made especially for women, passes product tests, the next step is ________.

Which of the following statements is true of test marketing?

Which figures does the company use to analyze the new product's financial attractiveness?

Introducing a new product into the market is called ________.

In a(n) ________, new products and marketing tactics are tested among specifically identified groups of customers and stores.

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

A company getting ready to launch a new product must make several decisions. The company must first decide on ________.

Which of the following involves costs that most likely occur during the commercialization stage of new product development?

In a(n) ________, consumers interact with new products and marketing tactics in laboratory stores or virtual online shopping environments.

Neutron Inc. is conducting a business analysis to determine which of the many newly developed apps should be released. To estimate sales, the company must ________.

Starbucks introduced a less-than-perfect mobile payments app, then worked out the flaws after the launch. The company chose speed to market over a perfect app at introduction. This illustrates ________.

Which of the following stages of the new product development process occurs immediately after the completion of the business analysis for the product or service?