Exam 9: Product Management and New-Product Development

A new-product idea moves through the early stages of the life cycle more quickly when it has all the following characteristics EXCEPT:

The cost of replacing defective parts is the biggest cost of poor quality.

It is still possible for a firm to earn a profit if it operates in the sales decline stage of the product life cycle.

Total industry profits reach their maximum during the __________ stage of the product life cycle.

Sales and profits usually move together over time during the product life cycle.

Concerning product life cycles:

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.

A high percentage of new-product ideas survive to the commercialization step in the new-product development process.

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 a player in the lawn and garden market-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"?

Experts estimate that 80-95 percent of all new consumer packaged goods brands fail.

The Consumer Product Safety Commission

As a product moves through its product life cycle:

Concerning the product life cycle:

Which of the following observations concerning a phase-out strategy is incorrect?

Which of the following is true of product liability?

When introducing a really new product, the marketer should be concerned about building channels of distribution, but not about promotion.

A new product idea is more likely to move quickly through the early stages of the product life cycle when:

When planning for the different stages of the product life cycle, managers should remember that:

Sales of a producer's wax paper food-wrap are declining fast. The advertising manager-looking for a way to attract attention to the brand-suggests changing the package somewhat and promoting it as a "new" product. The Federal Trade Commission

When a marketing manager notices that customer reaction to a new product does not meet expectations, they need to be prepared to _____ or move to a new marketing mix.