Deck 11: Developing and Managing Products

Question 1

A message developed for and targeted toward early adopters will be perceived similarly by late majority adopters.

Answer 1

False

Question 2

A process called 3D printing, or additive manufacturing, is sometimes used to create three-dimensional prototypes quickly and at a relatively low cost.

Answer 2

True

Question 3

Which of the following is a similarity between the early majority and the late majority?

A)Both have the potential to become opinion leaders.
B)Both rely on science and experts for information.
C)Both depend on word-of-mouth communication.
D)Both prefer to be influenced by the mass media.

Answer 3

C

Question 4

The product life cycle (PLC) for a brand is usually longer than the PLC for a product form.

Question 5

Roger, an affluent college graduate, buys gadgets on the 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 is most likely to belong to the category of _____ in the context of diffusion of innovation.

A)the late majority
B)innovators
C)the early majority
D)early adopters

Question 6

Absolute failure occurs when a product returns a profit but fails to achieve sales, profit, or market share goals.

Question 7

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

A)It eliminates ideas that are inconsistent with an organization's new-product strategy.
B)It calculates preliminary figures for demand, cost, sales, and profitability.
C)It involves getting consumer reactions to visual representations of a proposed product.
D)It involves making cosmetic or functional changes to existing products.

Question 8

The rate of decline of sales is governed by how rapidly consumer tastes change or substitute products are adopted.

Question 9

The growth stage of the product life cycle (PLC) represents the full-scale launch of a new product into the marketplace.

Question 10

Daily Farm, a food and beverage manufacturing firm, is known for its unique variety of table sauces. To offer more variations to its customers, Daily Farm recently launched an olive and pepper sauce. The olive and pepper sauce belongs to the category of improved products.

Question 11

A product category includes all brands that satisfy a particular type of need.

Question 12

A concept test evaluates an existing product idea, after the creation of a prototype.

Question 13

Which of the following statements is true of a customer innovation center?

A)It is an approach to reposition a company's products.
B)It promotes status-conscious advertising among customers.
C)It is a forum for meeting with customers and directly involving them in the innovation process.
D)It is used in the business analysis stage of the new-product development process.

Question 14

A firm that starts with a global strategy is better able to develop products that are marketable worldwide.

Question 15

During the maturity stage of the product life cycle, new users can be added indefinitely.

Question 16

Unlike the growth stage of the product life cycle, in the introductory stage, emphasis switches from primary demand promotion to aggressive brand advertising and communication of the differences between brands.

Question 17

Marketing costs are high in the introductory stage of the product life cycle because:

A)product design changes become stylistic rather than functional.
B)high dealer margins are often needed to obtain adequate distribution.
C)manufacturers scramble to sign up dealers and distributors.
D)emphasis is given to communication of the differences between brands in the market.

Question 18

A new-product strategy links the new-product development process with the objectives of the marketing department, the business unit, and the corporation.

Question 19

In the context of product characteristics and the rate of adoption, which of the following statements is true of complexity?

A)It refers to the degree of difficulty involved in understanding and using a new product.
B)It refers to the degree to which a new product is consistent with existing values.
C)It refers to the degree to which a product is perceived as superior to existing substitutes.
D)It refers to the degree to which a product can be tried on a limited basis.

Question 20

In the context of diffusion of innovation, a dominant characteristic of innovators is tradition.

Question 21

Cleanz Inc., a toiletries manufacturing firm, has launched a new range of organic sanitizing wipes. It wants to test its consumers' reactions to this new product in an economical way. Therefore, Cleanz 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 is using _____.

A)scanner-based research testing
B)simulated market testing
C)virtual test marketing
D)traditional test marketing

Question 22

Hakimo Corp., a manufacturer of audio equipment, has developed a unique wireless speaker system that runs on solar power. The speakers can operate for sixteen hours after being exposed to the sun for two hours. This new product, which is radically different from anything available in the market, would fall in the new product category of _____.

A)repositioned products
B)revised products
C)discontinuous innovations
D)new and improved products

Question 23

Which of the following is a disadvantage of test marketing?

A)It requires major changes in consumer behavior such as rejecting microwave ovens.
B)It promotes the criticism of an idea, no matter how ridiculous it may seem.
C)It inaccurately predicts the success of a product that creates new consumption patterns.
D)It exposes the new product and its marketing mix to its competitors before its introduction.

Question 24

Which of the following is a similarity between early adopters and the early majority?

A)Both have the potential to become opinion leaders.
B)Both rely on group norms and values.
C)Both desire to earn the respect of others.
D)Both are influenced by advertising and promotions.

Question 25

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

A)Products are developed to meet unique market requirements whenever possible.
B)A firm that starts with a local strategy is better able to develop global products.
C)Products are inadequately distributed in local markets.
D)Test marketing is not required for products developed by multinational firms.

Question 26

Which of the following is an objective of focus group interviews?

A)To stimulate insightful comments through group interaction
B)To directly involve customers in test marketing
C)To reject ideas that are obviously inappropriate for some reason
D)To eliminate ideas that are inconsistent with an organization's new-product strategy

Question 27

Fournotts Corp. manufactures and sells accessories for cell phones. To boost its sales, the research and development team decides to use the method of product modification. In this scenario, the research and development team will most likely:

A)eliminate products that are inconsistent with Fournotts's business mission.
B)develop products by the application of a new technology.
C)make a slight change in the design or function of the existing products.
D)add new products to supplement Fournotts's established product line.

Question 28

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

A)commercialization
B)test marketing
C)development
D)business analysis

Question 29

Nutrioats, an oatmeal cookie product, has been in the market for over seven years. However, the product is now in its decline stage. In this case, which of the following will be a successful strategy to market Nutrioats?

A)Lengthening the product line
B)Focusing on adding new users
C)Spending heavily on advertising to educate consumers about the product's benefits
D)Eliminating all nonessential marketing expenses and letting sales decline

Question 30

Which of the following statements is true of opinion leaders?

A)They most likely belong to the late majority category of adopters.
B)They speed up the diffusion process through word-of-mouth communication.
C)They are distinguished by demographics.
D)They have the longest adoption time and the lowest socioeconomic status.

Question 31

Steve, a retiree, 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 costs versus the demand and the profit he could make depending on the volume of sales. After extensive deliberation, Steve decides to take credit from the bank for opening the facility as the initial investment required is too high. Steve is currently in the _____ stage of the new-product development process.

A)commercialization
B)business analysis
C)idea generation
D)test marketing

Question 32

Which of the following statements is true of the maturity stage of the product life cycle (PLC)?

A)The beginning of this stage is signaled by increased sales.
B)Niche marketers that target the underserved segments of a market emerge.
C)It is the shortest stage of the PLc.
D)Product design changes tend to become functional rather than stylistic.

Question 33

In the context of the product life cycle, a long-run drop in a product's sales signals the beginning of the _____.

A)introductory stage
B)growth stage
C)maturity stage
D)decline stage

Question 34

In the context of diffusion of innovation, the dominant value of laggards is _____.

A)skepticism
B)deliberateness
C)adventure
D)tradition

Question 35

Which of the following statements best describes simultaneous product development?

A)It is a strategy that provides general guidelines for generating, screening, and evaluating new-product ideas.
B)It is used to determine the reactions of potential customers in a market situation.
C)It is the process where all the involved areas work together rather than sequentially during a product's development.
D)It is a strategy that links the new-product development process with the objectives of the marketing department, the business unit, and the corporation.

Question 36

In the context of product characteristics and the rate of adoption, which of the following statements is true of relative advantage?

A)It refers to the degree of difficulty involved in understanding and using a new product.
B)It refers to the degree to which a new product is consistent with existing values.
C)It refers to the degree to which a product is perceived as superior to existing substitutes.
D)It refers to the degree to which a product can be tried on a limited basis.

Question 37

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

A)Costs decrease dramatically once a product idea enters the development stage.
B)It involves evaluating a new-product idea before creating any prototype.
C)Simultaneous product development increases the time spent in the development process.
D)It involves examining the feasibility of manufacturing a product at an acceptable cost.

Question 38

Steven, a construction worker, tends to buy a new gadget if most of his friends have them. He relies on reviews from his friends rather than on television or newspaper advertisements to make his purchase decisions. It can be inferred that Steven belongs to the category of _____ in the diffusion of innovation.

A)laggards
B)innovators
C)the late majority
D)the early majority

Question 39

Jenny, the 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. In this scenario, the chosen ice cream flavor has entered the _____ stage of the new-product development process.

A)business analysis
B)development
C)test marketing
D)commercialization

Question 40

Which of the following statements is true of simulated market testing?

A)It is often conducted on prototype models during the development stage.
B)It is a useful tool for implementing simultaneous product development.
C)It is the final stage in the new-product development and marketing process.
D)It is used to monitor shopper behavior to assess a product's performance.

Question 41

How is the Internet important for implementing simultaneous product development?

Question 42

How does a multinational corporation meet the needs of the global market?

Question 43

_____ is the degree to which a product can be sampled on a limited basis.

A)Compatibility
B)Trialability
C)Observability
D)Complexity

Question 44

In which of the following ways does the concept of product life cycle (PLC) help marketing managers?

A)It tells managers the length of a product's life cycle.
B)It can be used to analyze a brand, a product form, or a product category.
C)It dictates the marketing strategy to be used for a product.
D)It informs marketers about the duration of a product in the various stages of its life cycle.

Question 45

Explain the differences between innovators and early adopters.

Question 46

In comparison to early adopters, which of the following statements is true of the early majority?

A)They are more likely to be opinion leaders.
B)They are less likely to extend the adoption process.
C)They are self-confident, and they rely less on group norms.
D)They are likely to collect more information and evaluate more brands.

Question 47

Describe the growth stage of the product life cycle.

Question 48

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

A)It shortens the development process and reduces costs.
B)It eliminates the need for conducting laboratory tests on product prototypes.
C)It ensures that product development occurs in highly structured stages.
D)It eliminates the need for test marketing a new product.

Question 49

Magnira Corp. is an apparel company. After a slow start, it saw a steep rise in its clientele and a remarkable increase in its profits. However, with the launch of other apparel manufacturers in the market, the profits of Magnira have started declining. To sustain its growth in the market, the managers of Magnira should:

A)focus on primary demand stimulation rather than advertising the brand.
B)shift to aggressive brand advertising and open new branches.
C)suggest top management to reduce the number of employees in the company.
D)distribute the company's products at limited outlets.

Question 50

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

A)The features of the new product should be similar to its substitutes in the market.
B)The product should not be developed using crowdsourcing.
C)The new product should be priced lower than the other products in the same category.
D)The new product should deliver a meaningful and perceivable benefit to a sizable number of people.

Question 51

Explain absolute and relative product failure. Why do a large proportion of new product introductions fail?

Question 52

Which of the following statements is true of the product life cycle (PLC)?

A)The PLC dictates the marketing strategy to be used for a product.
B)A product spends the same amount of time in the different stages of the life cycle.
C)The PLC for a product form is longer than the PLC for any one brand.
D)Changes in a product, its uses, its image, or its positioning do not affect its life cycle.

Question 53

In the context of the new-product development process, which of the following is true of a new-product strategy?

A)It refrains from adopting ideas suggested by customers and competitors.
B)It is the last stage of the new-product development process.
C)It must be compatible with the objectives of the marketing department, the business unit, and the corporation.
D)It involves targeting existing products at new markets.

Question 54

What are the major implications of the new-product development process and the diffusion process to marketing managers?