Question 1

In the _____ stage of the product life cycle, organizations focus on building primary demand.

Accepted Answer

A)  market decline 
B)  market maturity 
C)  sales decline 
D)  market growth 
E)  market introduction 
A)  market decline 
B)  market maturity 
C)  sales decline 
D)  market growth 
E)  market introduction

Question 2

In the idea generation stage of the new-product development process:

Accepted Answer

A)  Bad ideas should be discarded as soon as possible. 
B)  Using competitors as a source of ideas should be avoided. 
C)  Firms need a continuous flow of ideas. 
D)  Analysis of consumer complaints about current products is unlikely to generate any new ideas. 
E)  None of the above. 
A)  Bad ideas should be discarded as soon as possible. 
B)  Using competitors as a source of ideas should be avoided. 
C)  Firms need a continuous flow of ideas. 
D)  Analysis of consumer complaints about current products is unlikely to generate any new ideas. 
E)  None of the above.

Question 3

Brand managers manage specific products, often taking over the jobs formerly handled by an advertising manager.

Accepted Answer

A) True 
 B)False

Question 4

Regarding product life cycles, which of the following is NOT true?

Accepted Answer

A)  Industry profits are likely to level off or decline before sales level off. 
B)  The level of promotion usually decreases in market maturity since there is less revenue to cover the cost. 
C)  Many close substitutes are usually competing in the market maturity stage. 
D)  It is usually expensive for a new firm to enter in the market maturity stage. 
E)  There is a downward pressure on prices over time. 
A)  Industry profits are likely to level off or decline before sales level off. 
B)  The level of promotion usually decreases in market maturity since there is less revenue to cover the cost. 
C)  Many close substitutes are usually competing in the market maturity stage. 
D)  It is usually expensive for a new firm to enter in the market maturity stage. 
E)  There is a downward pressure on prices over time.

Question 5

It is always in the best interest of the market pioneer for competitors to stay out of the market.

Accepted Answer

A) True 
 B)False

Question 6

The product life cycle is the four stages a new product idea goes through from beginning to end.

Accepted Answer

A) True 
 B)False

Question 7

The new-product development process

Accepted Answer

A)  should have ongoing support from top management. 
B)  should avoid applying quantitative screening criteria--since applying such criteria tends to eliminate most of the "really new" ideas. 
C)  should be informal--to encourage creativity. 
D)  should start whenever the majority of current products are in the market maturity stage of the product life cycle. 
E)  All of the above are correct. 
A)  should have ongoing support from top management. 
B)  should avoid applying quantitative screening criteria--since applying such criteria tends to eliminate most of the "really new" ideas. 
C)  should be informal--to encourage creativity. 
D)  should start whenever the majority of current products are in the market maturity stage of the product life cycle. 
E)  All of the above are correct.

Question 8

Use this information for questions that refer to the Wire Products Inc. (WPI) case.
Rob Rose sat back to review the portfolio of products his company, Wire Products Inc. (WPI), has in its product line. The company specializes in making various products for consumer and industrial uses from hard laminated wire -- coated with special paints.
1) WPI's "Wire Closet" products have been on the market for 10 years. Consumers install the wire shelves and closet rods themselves. The market leader, Closetmaid, has been selling similar products for more than 20 years, but so far the sales volume and profits for the market continue to grow. Recently, several new competitors have come into the market.
2) Three months ago, WPI entered the lawn and garden market with folding fences made with laminated wire and branded as "Wire Fold-Fence." Previously, WPI had never made fences or been in lawn and garden - although other companies have been making products in this market for years. However, Rob Rose has discovered that recent sales of wire garden fencing have leveled off and profits are declining overall. Still, WPI thinks it has some cost advantages and can grow its own sales and profits in this market.
3) WPI has just developed "Oil Wire," a new concept for the environmental cleanup market. Oil Wire is coated with a special material that cleans up oil spills. There has never been a product like this and WPI wants to quickly get the word out about its benefits. The product is now being rolled out in selective markets.
4) Another business product is "Wire Locker" used for secure storage by gymnasiums or companies. This style of locker has now gone out of fashion and most customers are finding better materials to use for lockers. Aggressive selling has helped Wire Locker's sales stay flat, but the total market for wire style lockers is only half of what it was 10 years ago.
5) WPI's "Wire Window" product is used as a security product to protect glass windows. It sells to homeowners and retailers looking for additional safety. WPI's sales of this product have dropped in recent years because competitors have introduced maintenance-free products. However, the overall market for this type of product continues to show good growth.
6) WPI is running concept tests of a new wire car-top carrier called "Wire Car Top." There are other car-top carrier products on the market, but WPI plans to include options in its carrier that will make it easier to load bikes, skis, and suitcases. "Wire Car Top" is also very easy to put on and take off of the car because of its light weight and ease-of-use features. The concept tests are helping WPI analysts develop rough estimates of costs, sales, and profits.
7) Another new product idea, tentatively called "Wire Tent," is being considered. It would use laminated wires to create a portable tent frame. This product is currently being evaluated to determine its fit with the company's objectives and external market trends.
Rob is thinking about the product life cycle, where each product fits, and what he should be doing as part of his marketing plan for each of these products.
-Is it a good idea for a company like WPI to have several product managers?

Accepted Answer

A)  No, because the company has several different product categories. 
B)  Yes, because the company would want to eliminate the job of advertising manager. 
C)  Yes, because the company has several different product categories. 
D)  No, because the company would need someone to give direction to the advertising manager. 
A)  No, because the company has several different product categories. 
B)  Yes, because the company would want to eliminate the job of advertising manager. 
C)  Yes, because the company has several different product categories. 
D)  No, because the company would need someone to give direction to the advertising manager.

Question 9

Which of the following is LESS LIKELY to happen as a product moves through the later stages of the product life cycle?

Accepted Answer

A)  Place - move toward selective distribution. 
B)  Promotion - build selective demand. 
C)  Price - meet competition. 
D)  Competitive situation - Heading toward pure competition. 
E)  Product - Some drop out. 
A)  Place - move toward selective distribution. 
B)  Promotion - build selective demand. 
C)  Price - meet competition. 
D)  Competitive situation - Heading toward pure competition. 
E)  Product - Some drop out.

Question 10

Ideas about potential new products should

Accepted Answer

A)  be encouraged from any and all sources, since only a few ideas will develop into successful products. 
B)  not be eliminated from consideration until they have been tested in the commercialization stage. 
C)  come primarily from employees of the firm--so that time won't be wasted evaluating product ideas that are inconsistent with the firm's objectives and resources. 
D)  come from outside the firm, since studies show that really new ideas require a fresh perspective. 
E)  None of the above is correct. 
A)  be encouraged from any and all sources, since only a few ideas will develop into successful products. 
B)  not be eliminated from consideration until they have been tested in the commercialization stage. 
C)  come primarily from employees of the firm--so that time won't be wasted evaluating product ideas that are inconsistent with the firm's objectives and resources. 
D)  come from outside the firm, since studies show that really new ideas require a fresh perspective. 
E)  None of the above is correct.

Question 11

Even in a full-scale market test, the firm is testing only the product, not the whole marketing mix.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements regarding the market growth stage of the product life cycle is FALSE?

Accepted Answer

A)  Innovators still earn profits--but this stage is less profitable for them than the previous stage. 
B)  This is the time of peak profitability for the industry. 
C)  Many competitors enter the market resulting in much product variety. 
D)  The sales of the total industry are rising fairly rapidly as more and more customers buy. 
E)  None of the above is a false statement. 
A)  Innovators still earn profits--but this stage is less profitable for them than the previous stage. 
B)  This is the time of peak profitability for the industry. 
C)  Many competitors enter the market resulting in much product variety. 
D)  The sales of the total industry are rising fairly rapidly as more and more customers buy. 
E)  None of the above is a false statement.

Question 13

Which statement is true about products in the decline stage of the product life cycle?

Accepted Answer

A)  Brand managers should phase-out this product as quickly as possible. 
B)  A declining product may still be profitable for some time and it might be more appropriate to phase-out this product gradually. 
C)  Customers will always abandon the declining product immediately if an alternative is available. 
D)  Phasing-out a product at this time is fairly easy and this strategy will cut future losses. 
E)  None of the above statements are true. 
A)  Brand managers should phase-out this product as quickly as possible. 
B)  A declining product may still be profitable for some time and it might be more appropriate to phase-out this product gradually. 
C)  Customers will always abandon the declining product immediately if an alternative is available. 
D)  Phasing-out a product at this time is fairly easy and this strategy will cut future losses. 
E)  None of the above statements are true.

Question 14

Which of the following is NOT within the power of the Consumer Product Safety Commission?

Accepted Answer

A)  It can set safety standards for products. 
B)  It can order repairs of unsafe products. 
C)  It can order returns of unsafe products. 
D)  It can back up its orders with fines and jail sentences. 
E)  It can conduct random searches for unsafe products in consumers' homes. 
A)  It can set safety standards for products. 
B)  It can order repairs of unsafe products. 
C)  It can order returns of unsafe products. 
D)  It can back up its orders with fines and jail sentences. 
E)  It can conduct random searches for unsafe products in consumers' homes.

Question 15

A fad cycle is shorter than a fashion cycle.

Accepted Answer

A) True 
 B)False

Question 16

A _____ is a visual aid that helps organize cause-and-effect relationships for "things gone wrong."

Accepted Answer

A)  Pareto chart 
B)  fishbone diagram 
C)  SWOT output 
D)  waterfall chart 
E)  pie chart 
A)  Pareto chart 
B)  fishbone diagram 
C)  SWOT output 
D)  waterfall chart 
E)  pie chart

Question 17

Use this information for questions that refer to the Wire Products Inc. (WPI) case.
Rob Rose sat back to review the portfolio of products his company, Wire Products Inc. (WPI), has in its product line. The company specializes in making various products for consumer and industrial uses from hard laminated wire -- coated with special paints.
1) WPI's "Wire Closet" products have been on the market for 10 years. Consumers install the wire shelves and closet rods themselves. The market leader, Closetmaid, has been selling similar products for more than 20 years, but so far the sales volume and profits for the market continue to grow. Recently, several new competitors have come into the market.
2) Three months ago, WPI entered the lawn and garden market with folding fences made with laminated wire and branded as "Wire Fold-Fence." Previously, WPI had never made fences or been in lawn and garden - although other companies have been making products in this market for years. However, Rob Rose has discovered that recent sales of wire garden fencing have leveled off and profits are declining overall. Still, WPI thinks it has some cost advantages and can grow its own sales and profits in this market.
3) WPI has just developed "Oil Wire," a new concept for the environmental cleanup market. Oil Wire is coated with a special material that cleans up oil spills. There has never been a product like this and WPI wants to quickly get the word out about its benefits. The product is now being rolled out in selective markets.
4) Another business product is "Wire Locker" used for secure storage by gymnasiums or companies. This style of locker has now gone out of fashion and most customers are finding better materials to use for lockers. Aggressive selling has helped Wire Locker's sales stay flat, but the total market for wire style lockers is only half of what it was 10 years ago.
5) WPI's "Wire Window" product is used as a security product to protect glass windows. It sells to homeowners and retailers looking for additional safety. WPI's sales of this product have dropped in recent years because competitors have introduced maintenance-free products. However, the overall market for this type of product continues to show good growth.
6) WPI is running concept tests of a new wire car-top carrier called "Wire Car Top." There are other car-top carrier products on the market, but WPI plans to include options in its carrier that will make it easier to load bikes, skis, and suitcases. "Wire Car Top" is also very easy to put on and take off of the car because of its light weight and ease-of-use features. The concept tests are helping WPI analysts develop rough estimates of costs, sales, and profits.
7) Another new product idea, tentatively called "Wire Tent," is being considered. It would use laminated wires to create a portable tent frame. This product is currently being evaluated to determine its fit with the company's objectives and external market trends.
Rob is thinking about the product life cycle, where each product fits, and what he should be doing as part of his marketing plan for each of these products.
-In which stage of the product life cycle is "Wire Fold-Fence"?

Accepted Answer

A)  Sales decline 
B)  Market introduction 
C)  Market maturity 
D)  Market growth 
E)  Market development 
A)  Sales decline 
B)  Market introduction 
C)  Market maturity 
D)  Market growth 
E)  Market development

Question 18

Jack Johnson uses a Pareto chart to identify the frequency of different complaints from his customers. After identifying the biggest problem, he may create a _____ to solve it.

Accepted Answer

A)  demographic report 
B)  waterfall chart 
C)  fishbone diagram 
D)  competitor profile 
E)  pie chart 
A)  demographic report 
B)  waterfall chart 
C)  fishbone diagram 
D)  competitor profile 
E)  pie chart

Question 19

Which of the following types of products provide low immediate satisfaction but high long-run consumer welfare?

Accepted Answer

A)  Salutary products 
B)  Pleasing products 
C)  Desirable products 
D)  Deficient products 
E)  Generic products 
A)  Salutary products 
B)  Pleasing products 
C)  Desirable products 
D)  Deficient products 
E)  Generic products

Question 20

In which of the following situations is the new product entering the MARKET INTRODUCTION stage of the product life cycle?

Accepted Answer

A)  Porsche just introduced a new luxury sport-ute to compete against sport-utes made by others. 
B)  Colgate-Palmolive just introduced a "new and improved" chemical formula for its "Total" toothpaste. 
C)  Home Depot (a home improvement chain) just introduced its own dealer brand of paint. 
D)  Apple just introduced a computer operating system that is so "user-friendly" it responds to spoken commands. 
E)  All of the above. 
A)  Porsche just introduced a new luxury sport-ute to compete against sport-utes made by others. 
B)  Colgate-Palmolive just introduced a "new and improved" chemical formula for its "Total" toothpaste. 
C)  Home Depot (a home improvement chain) just introduced its own dealer brand of paint. 
D)  Apple just introduced a computer operating system that is so "user-friendly" it responds to spoken commands. 
E)  All of the above.

Exam 10: Product Management and New-Product Development

In the _____ stage of the product life cycle, organizations focus on building primary demand.

In the idea generation stage of the new-product development process:

Brand managers manage specific products, often taking over the jobs formerly handled by an advertising manager.

Regarding product life cycles, which of the following is NOT true?

It is always in the best interest of the market pioneer for competitors to stay out of the market.

The product life cycle is the four stages a new product idea goes through from beginning to end.

The new-product development process

Which of the following is LESS LIKELY to happen as a product moves through the later stages of the product life cycle?

Ideas about potential new products should

Even in a full-scale market test, the firm is testing only the product, not the whole marketing mix.

Which of the following statements regarding the market growth stage of the product life cycle is FALSE?

Which statement is true about products in the decline stage of the product life cycle?

Which of the following is NOT within the power of the Consumer Product Safety Commission?

A fad cycle is shorter than a fashion cycle.

A _____ is a visual aid that helps organize cause-and-effect relationships for "things gone wrong."

Jack Johnson uses a Pareto chart to identify the frequency of different complaints from his customers. After identifying the biggest problem, he may create a _____ to solve it.

Which of the following types of products provide low immediate satisfaction but high long-run consumer welfare?

In which of the following situations is the new product entering the MARKET INTRODUCTION stage of the product life cycle?

Marketings Value to Consumers, Firms, and Society

Marketing Strategy Planning

Evaluating Opportunities in the Changing Marketing Environment

Focusing Marketing Strategy With Segmentation and Positioning

Demographic Dimensions of Global Consumer Markets

Final Consumers and Their Buying Behavior

Business and Organizational Customers and Their Buying Behavior

Improving Decisions With Marketing Information

Elements of Product Planning for Goods and Services

Place and Development of Channel Systems

Distribution Customer Service and Logistics

Retailers,wholesalers,and Their Strategy Planning

Promotion-Introduction to Integrated Marketing Communications

Personal Selling and Customer Service

Advertising, Publicity, and Sales Promotion

Pricing Objectives and Policies

Price Setting in the Business World

Implementing and Controlling Marketing Plans: Evolution and Revolution

Managing Marketings Link With Other Functional Areas

Ethical Marketing in a Consumer-Oriented World: Appraisal and Challenges

Economics Fundamentals

Marketing Arithmetic

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