Question 1

Which of the following statements about "new products" is FALSE?

Accepted Answer

A)  In order for it to be advertised as new, there should be a functionally significant change in the product-according to the FTC. 
B)  A product should be considered "new" by a particular firm if it is new in any way for that company. 
C)  The FTC considers six months as the maximum time that a product should be called "new." 
D)  According to the FTC, a product may be called "new" (for example, in advertising) as long as the firm has made at least some minor change in the package or product. 
E)  A marketing manager should consider a product new if it is aimed at new markets. 
A)  In order for it to be advertised as new, there should be a functionally significant change in the product-according to the FTC. 
B)  A product should be considered "new" by a particular firm if it is new in any way for that company. 
C)  The FTC considers six months as the maximum time that a product should be called "new." 
D)  According to the FTC, a product may be called "new" (for example, in advertising) as long as the firm has made at least some minor change in the package or product. 
E)  A marketing manager should consider a product new if it is aimed at new markets.

Question 2

Cargill, Inc. is finally earning a profit on the unique product it introduced six months ago. Cargill's advertising is both informative and persuasive. Much money is being spent on Place development. There is little price competition, although several competitors have come out with reasonable imitations. Total industry sales and profits are both rising. In which stage of the product life cycle is Cargill operating?

Accepted Answer

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

Question 3

Midway, Inc. has seen most of its competitors drop out of its product-market due to declining industry sales and profits. But Midway still has much demand for its product from a small group of loyal customers. This product-market is in which product life cycle stage?

Accepted Answer

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

Question 4

In the market growth stage of the product life cycle:

Accepted Answer

A)  competing products become almost the same in the minds of potential consumers. 
B)  distribution moves from intensive to selective. 
C)  many competitors drop out of the market. 
D)  total industry sales increase very slowly. 
E)  total industry profits reach their peak and begin to decline. 
A)  competing products become almost the same in the minds of potential consumers. 
B)  distribution moves from intensive to selective. 
C)  many competitors drop out of the market. 
D)  total industry sales increase very slowly. 
E)  total industry profits reach their peak and begin to decline.

Question 5

Industry sales are highest in which of the following product life cycle stages?

Accepted Answer

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

Question 6

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

Accepted Answer

A)  Commercialization 
B)  Idea evaluation 
C)  Idea generation 
D)  Screening 
E)  Development 
A)  Commercialization 
B)  Idea evaluation 
C)  Idea generation 
D)  Screening 
E)  Development

Question 7

The money spent to improve quality should not only satisfy customers but also justify the cost through improved profit.

Accepted Answer

A) True 
 B)False

Question 8

The shape, length, and current stage of a product life cycle may vary depending:

Accepted Answer

A)  on how the market is defined. 
B)  on the nature of the competition. 
C)  on the nature of the products involved. 
D)  All of these alternatives are correct. 
A)  on how the market is defined. 
B)  on the nature of the competition. 
C)  on the nature of the products involved. 
D)  All of these alternatives are correct.

Question 9

Firms should try to develop marketing mixes that make the most of the market growth stage of the product life cycle-when profits are highest.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements is true regarding the length of product life cycles?

Accepted Answer

A)  Product life cycles last 5 years for each product idea. 
B)  Product life cycles average 90 days. 
C)  Movies have very long product life cycles. 
D)  Product life cycles vary in length but are generally getting shorter. 
E)  Product life cycles will be identical in length across every geographic region since the cycle applies to one product idea or category. 
A)  Product life cycles last 5 years for each product idea. 
B)  Product life cycles average 90 days. 
C)  Movies have very long product life cycles. 
D)  Product life cycles vary in length but are generally getting shorter. 
E)  Product life cycles will be identical in length across every geographic region since the cycle applies to one product idea or category.

Question 11

Because firms must be developing new products all the time, which of the following statements is true?

Accepted Answer

A)  Competitors are likely to rapidly introduce product improvements in the market growth stage. 
B)  The developed economies experience technological advances quicker than the less-developed economies. 
C)  Although the life of different products varies, product life cycles are getting shorter. 
D)  One new invention may make possible many new products to replace old ones. 
E)  All of these statements are true. 
A)  Competitors are likely to rapidly introduce product improvements in the market growth stage. 
B)  The developed economies experience technological advances quicker than the less-developed economies. 
C)  Although the life of different products varies, product life cycles are getting shorter. 
D)  One new invention may make possible many new products to replace old ones. 
E)  All of these statements are true.

Question 12

Product life cycles refer to the life of:

Accepted Answer

A)  a firm's individual product. 
B)  a product idea. 
C)  a firm's brand. 
D)  a fashion. 
E)  Any or all of these is correct. 
A)  a firm's individual product. 
B)  a product idea. 
C)  a firm's brand. 
D)  a fashion. 
E)  Any or all of these is correct.

Question 13

The FTC places no restriction on the length of time a product can be called "new."

Accepted Answer

A) True 
 B)False

Question 14

Regarding the idea generation stage of the new-product development process, which of the following is true?

Accepted Answer

A)  Business firms often get new product ideas from competitors. 
B)  It is best to focus on only a few good ideas at this stage. 
C)  Studying customers' ideas is not very helpful, since they tend to focus on minor technical changes in existing products. 
D)  Most companies don't need a special procedure for seeking new product ideas because so many ideas are coming from so many different sources. 
E)  None of these alternatives is true. 
A)  Business firms often get new product ideas from competitors. 
B)  It is best to focus on only a few good ideas at this stage. 
C)  Studying customers' ideas is not very helpful, since they tend to focus on minor technical changes in existing products. 
D)  Most companies don't need a special procedure for seeking new product ideas because so many ideas are coming from so many different sources. 
E)  None of these alternatives is true.

Question 15

When a large firm has several different kinds of products, product managers or brand managers may be put in charge of each one.

Accepted Answer

A) True 
 B)False

Question 16

Regarding the new-product development process:

Accepted Answer

A)  the hypothesis tested is that the new product idea will not be profitable. 
B)  a gradual "roll-out" of the product-region by region-allows for more market testing. 
C)  concept tests are done before any physical models are produced. 
D)  likely ROI should be estimated throughout the process to force the new idea to prove itself. 
E)  All of these alternatives are correct. 
A)  the hypothesis tested is that the new product idea will not be profitable. 
B)  a gradual "roll-out" of the product-region by region-allows for more market testing. 
C)  concept tests are done before any physical models are produced. 
D)  likely ROI should be estimated throughout the process to force the new idea to prove itself. 
E)  All of these alternatives are correct.

Question 17

To be called "new" according to the FTC, a product must be entirely new or changed in a functionally significant or substantial respect.

Accepted Answer

A) True 
 B)False

Question 18

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.
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 19

The product life cycle:

Accepted Answer

A)  Describes the stages a new product idea goes through from beginning to end. 
B)  Has five major stages. 
C)  Applies more to individual brands than to categories or types of products. 
D)  Shows that sales and profits tend to move together over time. 
E)  All of these alternatives are correct. 
A)  Describes the stages a new product idea goes through from beginning to end. 
B)  Has five major stages. 
C)  Applies more to individual brands than to categories or types of products. 
D)  Shows that sales and profits tend to move together over time. 
E)  All of these alternatives are correct.

Question 20

At one time most firms assumed defects were an inevitable part of mass production. _____ firms showed that this assumption was not valid.

Accepted Answer

A)  Chinese 
B)  American 
C)  European 
D)  Japanese 
E)  Latin American 
A)  Chinese 
B)  American 
C)  European 
D)  Japanese 
E)  Latin American

Which of the following statements about "new products" is FALSE?

Midway, Inc. has seen most of its competitors drop out of its product-market due to declining industry sales and profits. But Midway still has much demand for its product from a small group of loyal customers. This product-market is in which product life cycle stage?

In the market growth stage of the product life cycle:

Industry sales are highest in which of the following product life cycle stages?

The money spent to improve quality should not only satisfy customers but also justify the cost through improved profit.

The shape, length, and current stage of a product life cycle may vary depending:

Firms should try to develop marketing mixes that make the most of the market growth stage of the product life cycle-when profits are highest.

Which of the following statements is true regarding the length of product life cycles?

Because firms must be developing new products all the time, which of the following statements is true?

Product life cycles refer to the life of:

The FTC places no restriction on the length of time a product can be called "new."

Regarding the idea generation stage of the new-product development process, which of the following is true?

When a large firm has several different kinds of products, product managers or brand managers may be put in charge of each one.

Regarding the new-product development process:

To be called "new" according to the FTC, a product must be entirely new or changed in a functionally significant or substantial respect.

The product life cycle:

At one time most firms assumed defects were an inevitable part of mass production. _____ firms showed that this assumption was not valid.

Marketings Value to Consumers, Firms, and Society

Marketing Strategy Planning

Evaluating Opportunities in the Changing Marketing Environment

Focusing Marketing Strategy With Segmentation and Positioning

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

Promotionintroduction 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

Filters

Exam 9: Product Management and New-Product Development

Which of the following statements about "new products" is FALSE?

Midway, Inc. has seen most of its competitors drop out of its product-market due to declining industry sales and profits. But Midway still has much demand for its product from a small group of loyal customers. This product-market is in which product life cycle stage?

In the market growth stage of the product life cycle:

Industry sales are highest in which of the following product life cycle stages?

The money spent to improve quality should not only satisfy customers but also justify the cost through improved profit.

The shape, length, and current stage of a product life cycle may vary depending:

Firms should try to develop marketing mixes that make the most of the market growth stage of the product life cycle-when profits are highest.

Which of the following statements is true regarding the length of product life cycles?

Because firms must be developing new products all the time, which of the following statements is true?

Product life cycles refer to the life of:

The FTC places no restriction on the length of time a product can be called "new."

Regarding the idea generation stage of the new-product development process, which of the following is true?

When a large firm has several different kinds of products, product managers or brand managers may be put in charge of each one.

Regarding the new-product development process:

To be called "new" according to the FTC, a product must be entirely new or changed in a functionally significant or substantial respect.

The product life cycle:

At one time most firms assumed defects were an inevitable part of mass production. _____ firms showed that this assumption was not valid.

Marketings Value to Consumers, Firms, and Society

Marketing Strategy Planning

Evaluating Opportunities in the Changing Marketing Environment

Focusing Marketing Strategy With Segmentation and Positioning

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

Promotionintroduction 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

Filters