Chapter 9 New-Product Development and Product Life-Cycle Strategies Multiple Choice

1. Every product seems to go through a life-cycle. Which of the following is not a major challenge presented by the PLC? a. b. c. d. All products eventually decline. A firm must be good at developing new products to replace aging ones. The firm must be good at adapting its marketing strategies. It is difficult to plot the stages as a product goes through the stages

(p. 315) - D 2. A firm can obtain new products through acquisition. One of the following is not a common way to accomplish this. a. buy a whole company b. copy or modify a competitor's products c. buy a patent d. buy a license to produce some else's product (p. 315) - B 3. A company can obtain new products through new-product development. Which of the following define(s) new products? a. original products b. product improvements c. product modification d. all of the above (p. 315) - D

4.

New products fail at a disturbing rate. Research estimates that new consumer packaged goods consisting mostly of line extension fail at a rate of _____.

a. 60 percent b. 70 percent c. 80 percent d. 90 percent (p. 315) - C

5.

Your firm added three new products earlier this year to add variety for customers. Two of them failed to reach even minimal sales. What could be a possible cause?

a. The market size may have been overestimated. b. The actual products may not have been designed as well as they should have been. c. The products were not positioned correctly in the market d. All of the above. (p. 315) - D

6.

Your firm added three new products earlier this year to add variety for customers. Two of them failed to reach even minimal sales. What could possibly not be a cause?

a. The products were priced too high. b. The products were advertised incorrectly. c. Competitors fight back harder than expected. d. Research was too extensive. (p. 315) - D

7.

New-product development starts with _____. a. idea generation b. idea screening c. concept development d. concept testing

(p. 315) - A 8. Your company decides to use internal sources for developing new-product ideas. Which of the following would not be a common internal source? a. questioning executives and professionals b. company records and data c. encouraging intrapreneurism d. privileged information (pp. 317-318) - D

9. Out of every 1000 new-product ideas, on average, how many will turn out to be a commercial success? a. one b. two c. three d. four (p. 315) - A

10. H.J. Heinz Company developed its successful new line of ketchup by observing and listening to its _____.

a. employees b. sales force c. customers d. suppliers (p. 318) - C 11. Some companies give customers the tools and resources to design their own _____. a. b. c. d. advertising campaigns products product modifications product applications

(p. 318) - B 12. At this point your firm wants to use external sources for new-product ideas. After consulting with a friend you learn that all of the following are common sources except _____. a. customers b. suppliers c. competitors d. government agencies (pp. 318-320) - D 13. How could you use competitors as a choice of external new-product ideas? a. buy one of their products

b. analyze their sales c. dismantle one of their products d. all of the above

(p. 319) - D 14. The search for new-product ideas should be _____ rather than haphazard. a. consistent b. systematic c. continual d. strategically planned (p. 319) - B 15. The purpose of idea generation is to create a _____ of ideas. The purpose of succeeding stages is to ____ that number. a. small number; reduce b. small number; increase c. large number; increase d. large number; reduce (p. 320) - D 16. GrayBerry Gifts has just brainstormed a large number of ideas for adding new products and services after visiting several buying fairs. The owners will begin the first idea-reducing stage called _____ to arrive at a realistic number to adopt. a. idea generation b. idea screening c. product concept d. concept development (p. 320) - B 17. What do we call a detailed version of a new idea stated in meaningful consumer

terms? a. product idea b. product concept c. product image d. product proposal (p. 320) - B 18. JoAnn Fabrics, Inc. has just created a new combination of colors and fabric types. The firm wants to be sure of the way consumers perceive an actual or potential product called product _____. a. idea b. concept c. image d. proposal (p. 320) - C 19. When developing new products, it is important for a firm to distinguish between a product concept, a product image, and a product _____. a. idea b. proposal c. life-cycle d. none of the above (p. 320) - A 20. With what groups do firms conduct concept testing for new products? a. suppliers b. employees

c. target consumers d. focus groups (p. 321) - C

21. For some concept tests, a simple description consisting of a _____ might be sufficient. a. word b. picture c. word or picture d. narrative (p. 321) - C 22. Many firms routinely test new-product concepts with consumers before attempting to _____. a. commercialize them b. turn them into actual new products c. price them d. create advertising and promotion (p. 321) - B 23. After concept testing, a firm would engage in this stage in developing and marketing a new product. a. idea screening b. marketing strategy development c. business analysis d. product development

(p. 322) - B 24. The first part of the marketing strategy statement describes the target market, the planned product positioning, the sales, profit goals, and _____. a. market share b. the competition c. the secondary market d. the competition's anticipated reaction (p. 322) - A

25. A review of the sales, costs, and profit projections for a new product to find out whether they satisfy the company's objectives is called a _____. a. business feasibility b. feasibility study c. business analysis d. product acceptance (p. 323) - C

26. Once the product or service passes the business analysis test, it moves into what stage? a. concept development b. product development c. market testing d. research and development

(p. 323) - B 27. During product development which group or department develops the product into a physical product? a. R & D b. engineering c. production d. either a or b (p. 323) - D 28. Once Wainwright Industries' new riding lawnmower made especially for women passes functional and consumer tests, the next step is _____. a. test marketing b. focus group surveys c. commercialization d. posttesting (p. 324) - A 29. What advantage(s) does test marketing offer the marketer? a. provides experience before full introduction b. allows testing of the marketing program c. allows testing of positioning, advertising, distribution, and pricing d. all of the above (p. 324) - D 30. Bonneville Communications is concerned about test marketing and the possible related problems. Choose from the following the one item that is not a disadvantage.

a. Test marketing costs can be high. b. It can take much time to test market. c. It allows time for competition to spy and gain advantages. d. People who are surveyed tend to tell less than the truth. (p. 325) - D

31. Under what circumstances might a company do more than the average amount of test marketing? a. when a new product requires a major investment b. when management is not sure of the product c. when management is not sure of the marketing program d. all of the above (p. 324) - D 32. Although test marketing costs can be high, they are often small when compared with _____. a. the final results b. making a major mistake c. management's approval and acceptance d. stockholders' confidence (p. 324) - B 33. When using test marketing, consumer products companies usually choose one of three approaches - standard test markets, controlled test markets, or _____. a. blind tests

b. random sample test markets c. simulated test markets d. nonstandard test markets (p. 325) - C 34. One of the most devastating strategies a competitor might use during test marketing is to _____. a. introduce an equally good product in the same market b. cut their prices in the test cities c. buy up the product being tested d. run comparative advertising campaigns (p. 325) - A