Question 1

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 _____.

Accepted Answer

Cleanz is conducting a simulated market testing where it is testing the consumers' reactions to the new product in a controlled environment (mock shop) in an economical way. The company is also advertising its products to the selected members of the target market, which is common in simulated market testing. Scanner-based research testing and virtual test marketing are conducted through advanced technology and software, which is not mentioned in the scenario. Traditional test marketing involves launching the product in a limited geographical area for a certain period to test its market potential, which is not the case here.

Question 2

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 _____.

Accepted Answer

The new wireless speaker system developed by Hakimo Corp. is radically different from anything available in the market, and it utilizes a completely new technology (solar power) to operate. Therefore, it is a discontinuous innovation, which means it falls in the new product category. Repositioned products are existing products that are marketed in a new way, revised products are products that have undergone minor modifications or improvements, and new and improved products are simply updated versions of existing products.

Question 3

Which of the following is a disadvantage of test marketing?

Accepted Answer

Test marketing exposes the new product and its marketing mix to its competitors before its actual launch, giving them more time to develop counter-strategies and sabotage the launch of the new product.

Question 4

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

Accepted Answer

Both early adopters and the early majority rely on group norms and values when making decisions about adopting new innovations.

Question 5

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

Accepted Answer

Multinational corporations often develop products that can be adapted to meet local market requirements, while still maintaining a consistent brand image and quality. This allows them to enter and succeed in different international markets.

Question 6

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

Accepted Answer

The objective of focus group interviews is to stimulate insightful comments through group interaction. This allows for a deeper understanding of consumer attitudes and preferences towards a product or service. Option B is incorrect because involving customers in test marketing does not specifically pertain to focus group interviews. Option C and D are incorrect because the purpose of focus group interviews is not to reject or eliminate ideas, but rather to gather insights and feedback.

Question 7

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:

Accepted Answer

Product modification refers to making a slight change in the design or function of existing products. Therefore, the research and development team will most likely modify Fournotts's existing products rather than eliminating them or developing entirely new products. Adding new products to supplement Fournotts's established product line could also be an option, but it is not necessarily a part of product modification.

Question 8

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

Accepted Answer

Commercialization is the final stage of the new-product development process, where the decision to market a product is made. This stage involves bringing the product to the market, positioning it, and launching it. Before reaching the commercialization stage, the product goes through various stages, such as idea generation, screening, concept development and testing, business analysis, and test marketing. Therefore, the decision to market a product is made during the commercialization stage.

Question 9

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?

Accepted Answer

In the decline stage, it's often more cost-effective to reduce marketing expenses and allow the product to phase out naturally, as the market demand is decreasing.

Question 10

Which of the following statements is true of opinion leaders?

Accepted Answer

Opinion leaders are individuals who are influential in their social networks and have the ability to spread information and ideas through word-of-mouth communication. They are typically early adopters and tend to speed up the diffusion process. Demographics and adoption time/socioeconomic status are not defining characteristics of opinion leaders.

Question 11

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.

Accepted Answer

Steve is in the business analysis stage, where he is evaluating the costs, demand, and potential profits of opening a daycare facility for dogs. He is also exploring financing options such as taking credit from the bank.

Question 12

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

Accepted Answer

During the maturity stage of the PLC, sales growth begins to slow down as the product reaches its peak level of acceptance in the market. In response, niche marketers often emerge to target underserved segments of the market. The maturity stage is one of the longest stages in the PLC, and product design changes tend to become functional rather than stylistic as firms focus on maintaining profitability and market share. Therefore, option B is the correct choice. Option A is incorrect because increased sales typically occur during the growth stage of the PLC, not the maturity stage. Option C is also incorrect because the maturity stage is typically longer than both the introduction and growth stages. Option D is partially true, but not specific to the maturity stage as functional design changes can occur throughout the PLC.

Question 13

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

Accepted Answer

A long-run drop in sales indicates that the product has reached a saturation point and is experiencing a decline in demand, which signifies the decline stage of the product life cycle.

Question 14

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

Accepted Answer

Laggards are the last group to adopt a new innovation, often due to their strong attachment to tradition and resistance to change. Their dominant value is thus tradition, which leads to an aversion to taking risks and a preference for sticking with familiar and well-established ways of doing things.

Question 15

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. This means that teams from different departments, such as engineering, marketing, and finance, all work together from the beginning of the project, rather than waiting for each department to complete their tasks in a sequential order. This approach can lead to faster development times and more successful products. Options A, B, and D all describe other product development strategies.

Question 16

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

Accepted Answer

Relative advantage refers to the degree to which a product is perceived as superior to existing substitutes. It is an important factor in the rate of adoption of a new product as consumers are more likely to adopt a product if it is perceived as offering greater benefits or advantages over other products in the market.

Question 17

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

Accepted Answer

The development stage involves examining the feasibility of manufacturing a product at an acceptable cost, which means evaluating the production costs of the product and identifying any potential issues in the manufacturing process. Option A is incorrect because costs tend to increase during the development stage due to the costs involved in creating and testing prototypes. Option B is incorrect because the evaluation of a new-product idea typically occurs in the idea generation and screening stages, not the development stage. Option C is incorrect because simultaneous product development can reduce the time spent in the development process by allowing different parts of the product to be developed simultaneously, rather than sequentially.

Question 18

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.

Accepted Answer

The answer of Steven, a construction worker, tends to buy...

Question 19

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.

Accepted Answer

The chosen ice cream flavor has entered the commercialization stage of the new-product development process, as it is now being introduced to the market for customers to purchase.

Question 20

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

Accepted Answer

Simulated market testing is used to monitor shopper behavior in a controlled environment to assess a product's performance before a full-scale launch.

Quiz 11: Developing and Managing Products