Exam 9: Product Management and New-Product Development

Pfizer Corp. is introducing a really new product idea. Pfizer is spending a lot of money to inform potential customers and intermediaries about the availability and advantages of the new product. Although sales are rising slowly, Pfizer doesn't expect the product to become profitable for at least another year. Pfizer's new product is in which stage of the product life cycle?

Chris Carmine manages specific products and promotion at Bright-n-Shiny Toothbrush Company. Her job responsibility sounds like that of a ________.

Market testing can be risky because it gives information to competitors, but not testing may be even riskier.

How quickly a new product will be accepted by customers and how quickly competitors will follow with their own version of a product are important factors when planning the best strategy for a new product.

The risks and costs of failure in new-product development are minor when one considers the likely rewards.

Product managers can be instrumental in adapting products for international markets.

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?

Over the past several years, like other auto manufacturers, General Motors (GM) has introduced many new models of sport utility vehicles (SUVs) in all of its major divisions. This proliferation of SUVs and an increase in gasoline prices have caused sales to level off. In response, General Motors offered rebates of up to $5,000, or no-interest financing, on selected models of SUVs. The largest rebates went to current owners of GM vehicles, so that they would replace their current vehicles with a GM model instead of switching to another brand. The rebates have been heavily advertised on national television. Profit margins per vehicle have shrunk as a result of these costly promotions. In what stage of the product life cycle is GM currently operating?

When thinking about the product life cycle, a good manager knows that:

Use this information for question 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 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?

As a product moves through its product life cycle:

According to the Federal Trade Commission (FTC), a new product:

When planning new products, managers need not be too concerned about safe design because it is each consumer's responsibility to decide what products are safe to buy and use.

In its efforts to support new-product development ideas within its own company, Google allows its employees to spend _______ percent of their time each week thinking about new product ideas, even if the ideas are not related to the employees' specific jobs.

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

Competition is toughest in which of the following product life cycle stages?

Use this information for question 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 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 Fold-Fence"?

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.

Concerning product life cycles: