Question 1

MNM Foods Inc. manufactures jelly made out of gelatin in various fruit flavors. However, the sale of its current line of flavored jelly has significantly fallen. To recover losses, the company conducts market research and identifies that a significant amount of health benefits can be attributed to the consumption of the food jelly. The firm incorporated new promotion strategies so that consumers would retry the product owing to its projected health benefits. This is an example of:

Accepted Answer

The company is changing the perception of its product from just a flavored jelly to a healthy food item, which is an example of product repositioning. The company is not introducing any new products, nor is it making any significant changes or revisions to its existing product line.

Question 2

Which of the following should be specified by the policy-making criteria on new products?

Accepted Answer

The availability and cost of capital to develop a new product should be specified by the policy-making criteria as it affects the financial feasibility and viability of a new product. The other options (A, B, and C) are not realistic or feasible to be exact or predetermined when introducing a new product to the market.

Question 3

On earnings associated with new products of a firm, it is critical that the:

Accepted Answer

While earning steady profits is important for any company, becoming solely focused on short-term gains can lead to neglecting long-term growth and sustainability. Therefore, it is critical that the firm does not become solely preoccupied with a short-term focus when it comes to earnings associated with new products.

Question 4

M's Pizzas decides to explore the service industry and therefore signs a partnership with the Silverline Chain of Hotels to have its brand of specialty pizzas offered on the hotel's room-service menu. In this scenario, which of the following growth strategies is M's Pizzas using?

Accepted Answer

The answer of M's Pizzas decides to explore the service...

Question 5

Which of the following growth strategies aims at either increasing frequency of consumption or increasing the number of customers using a firm's product(s)?

Accepted Answer

Market development and market penetration both aim at increasing the frequency of consumption or increasing the number of customers using a firm's product(s). Market development involves expanding into new markets with existing products, while market penetration involves increasing market share in existing markets through marketing efforts. The other options (A, B, C) either focus on introducing new products or entering new markets, rather than increasing frequency of consumption or customer base.

Question 6

According to the growth vector matrix, which of the following products usually require a firm to make significant investments in research and development and make significant changes in its organizational structure?

Accepted Answer

New products require significant investments in research and development and organizational changes to bring a completely new product to market that may require new technology, manufacturing processes, and market research. Repositioned, improved, and additions to existing products may require some investment and changes but not to the same extent as new products.

Question 7

Which of the following organizational growth strategies deals with present products in present markets?

Accepted Answer

Market penetration deals with selling more of the present product in present markets. Diversification involves going into new markets with new products, product development involves creating new products for present markets, and market development involves selling present products in new markets.

Question 8

A popular television channel ropes in a celebrity to make a guest appearance in one of the episodes of a popular talk show. The intention of this initiative is to attract new viewers toward watching the talk show. The talk show's producer believes that it also helps in increasing the market share of the network that airs the show. This scenario is an example of _____ strategy.

Accepted Answer

The scenario described in the question is an example of market development strategy, which involves promoting existing products or services to new markets or new customer segments. In this case, the talk show's producer is trying to attract new viewers to the show by featuring a celebrity guest, which can help increase the market share of the network. Product development strategy involves creating new products or services for existing markets, while market saturation strategy involves trying to increase sales in existing markets by maximizing penetration. Diversification strategy involves entering new markets with new products or services.

Question 9

Which of the following indicates the direction in which an organization is moving with respect to its current products and markets?

Accepted Answer

The Growth vector matrix, also known as the Ansoff Matrix, is a strategic planning tool that helps organizations determine their product and market growth strategy, indicating the direction of growth with respect to current products and markets.

Question 10

Which of the following strategies is used when an automobile manufacturing company introduces a new car model to replace an existing one and advertises it in its present market?

Accepted Answer

Product development involves creating new or improved products to replace existing ones, targeting the same market.

Question 11

Which of the following is an example of a product development strategy?

Accepted Answer

Introducing a new and improved version of a product is an example of a product development strategy. The microprocessor manufacturing firm is updating its existing product and marketing it to its established customer base.

Question 12

Which of the following denotes a growth direction through the increase in market share for present product markets?

Accepted Answer

Market penetration is the strategy of increasing market share for a present product in present markets. This can be achieved by increasing the frequency of purchase, entering into new distribution channels and market segments, and aggressive promotional activities. Diversification is a strategy of entering into new product markets or businesses, while market development involves expanding into new markets with existing products. Benchmarking is a process of comparing one's performance against the best in the industry in order to identify areas of improvement. None of these strategies denote a growth direction through the increase in market share for present product markets, except market penetration.

Question 13

Which of the following refers to developing new products and cultivating new markets?

Accepted Answer

Diversification involves creating new products and entering new markets, expanding the company's reach and offerings.

Question 14

An automobile manufacturing firm consolidates all its suppliers to produce a new automobile that is a minor variant from its older version in terms of design and performance. The intention of the firm in doing so is to provide loyal customers automobiles with similar performance but at a lower price. According to authors Crawford and DiBenedetto, this new product falls into the category of _____.

Accepted Answer

The new product is a minor variant aimed at reducing costs while maintaining similar performance, which aligns with the category of "cost reductions" as defined by Crawford and DiBenedetto.

Question 15

Product development and diversification can be characterized as _____.

Accepted Answer

Product development and diversification both refer to the expansion or alteration of a company's product mix, making them product mix strategies.

Question 16

Devon Inc. first marketed Silky Soft as a brand of body lotion to compete with other similar body lotions in the market. Owing to mixed responses to the product, Devon promotes its Silky Soft lotion as an insect repellant that is also good for the skin. Into which of the new product categories does Silky Soft lotion fall?

Accepted Answer

Silky Soft lotion has been repositioned from a body lotion to an insect repellent that is also good for the skin. Hence, it falls under the category of product repositionings.

Question 17

HeadStart, an automobile manufacturer, has found that sales of its RockStart SUV has fallen over the last few years. Consequently, HeadStart introduces a new, revamped version of the SUV with additional features such as a latest GPS technology device and padded dashboards. The company stops production of the old model in order to invest all of its resources into marketing this new model in its present market. In this scenario, which of the following growth strategies is HeadStart employing?

Accepted Answer

HeadStart is employing the product development growth strategy as they are introducing a new, revamped version of the SUV with additional features, indicating a focus on developing products to appeal to existing customers. Additionally, they have stopped production of the old model to focus solely on marketing the new model, which is characteristic of product development.

Question 18

A new magazine, Valence, was introduced to the market as a raw and bold "underground nightlife magazine." The magazine was not received well by the audience and sales hit an all-time low. Since sales were low, the publisher of the magazine relaunched it as a fashion and lifestyle magazine for 20-something males. In which of the following new product categories would this product fall?

Accepted Answer

The relaunch of Valence as a fashion and lifestyle magazine for 20-something males can be categorized as a product repositioning, as the publisher has changed the target audience and the brand image of the magazine.

Question 19

Which of the following observations is true of new product policy?

Accepted Answer

A working definition of the profit concept is crucial for effective decision-making on new products. It helps to ensure that new products contribute to the overall profitability of the company. B is incorrect because there should be a specific timeline for the product to become operational to avoid delays and cost overruns. C is incorrect because while consumer satisfaction is important, it should be balanced against economic considerations. D is incorrect because a long-term focus is necessary to ensure that the new product is successful in the market.

Question 20

Which of the following strategies refers to creating new products to replace existing ones?

Accepted Answer

Product development refers to creating new products to replace existing ones. Market penetration involves selling more of the same products to the same market, market development involves selling existing products to new markets, and product repositioning involves changing the target market or perception of an existing product.

Quiz 7: New Product Planning and Development