Exam 10: Product Management and New-Product Development

Which of the following statements about the idea evaluation step is FALSE?

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 step of the new-product development process is the "Wire Car Top"?

Industry profits are largest in which of the following product life cycle stages?

In the market introduction stage, sales are low as a new idea is first introduced to a market.

Because of _____, a court rules that a fast-food restaurant has a legal obligation to pay damages to a family whose child was injured when it swallowed an unsafe toy that came in a kids' meal box.

It is easy for marketing managers to predict how long a product or brand will stay in each stage of the product life cycle.

The new-product development process discussed in the text

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 Window"?

Relative to most other countries, the U.S. has very strict product liability standards.

An industry's sales have leveled off and profits are declining in oligopolistic competition. Consumers see competing products as "homogeneous." Several firms have dropped out of the industry, but a new one entered recently. Firms in the industry are trying to avoid price-cutting by spending on persuasive advertising. These firms are competing in which stage of the product life cycle?

A fishbone diagram is a graph that shows the number of times a problem cause occurs, with problem causes ordered from most frequent to least frequent.

Full-scale market tests:

The product life cycle:

Which stage of the product life cycle is the largest profit stage for companies?

If the prospects in some product-market are poor, a firm may need a "phase out" strategy.

The Japanese success showed that one of the biggest costs of poor quality is lost customers.

3-D televisions are very new products in the U.S. market. They are in the __________ ________ stage of the product life cycle.

Sales growth is usually faster when the product is incompatible with the past values and experience of the target market.

Seeking to stop declining sales for an established mouthwash, a sales manager suggests that new coloring be added to the product and a major promotion effort be started for the "new" product. The Federal Trade Commission would:

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