Deck 8: Developing New Products and Managing the Product Life Cycle 

Question 1

Kallton is a multinational communications and information technology corporation. Its principal products are mobile telephones and tablets. It recently announced on its website that customers can suggest ideas for its upcoming product model. Contributors of short-listed ideas will be adequately rewarded. In this case, Kallton is using _ to generate new product ideas.

A) business analysis
B) marketing strategy development
C) concept development
D) test marketing
E) crowdsourcing

Answer 1

E

Question 2

The first part of a marketing strategy statement describes the of a new product.

A) marketing budget
B) marketing mix strategy
C) planned long-run sales and market share
D) planned price and distribution
E) target market, planned value proposition, and sales goals

Answer 2

E

Question 3

A company's external sources of new product ideas include its .

A) manufacturing staff
B) engineers
C) salespeople
D) managers
E) suppliers

Answer 3

E

Question 4

The Dairy Bar, a national soft-service ice cream retailer, buys cones from Cones & More. Cones & More is an important resource for marketplace information. They're considered a(n) source of new product ideas for the Dairy Bar.

A) internal
B) analytical
C) competitive
D) external
E) entrepreneurial

Question 5

Which statement is most likely true about idea generation in the new product development process?

A) Idea generation is usually followed by procedures that reduce the total number of ideas.
B) Intrapreneurial programs enable customers to contribute to the idea generation process.
C) A company can either develop ideas through internal or external sources but not through both.
D) Idea generation is most effective when it occurs after idea screening.
E) Most companies set a limit for the number of ideas generated to simplify the process.

Question 6

The third part of a marketing strategy statement describes the _ _ of a new product.

A) distribution and pricing
B) target market and sales goals
C) marketing budget
D) planned value proposition
E) sales, market, and profit goals

Question 7

Companies like Under Armour sponsor annual crowdsourcing events. In which of the following scenarios is crowdsourcing used for new product development?

A) A company depends on its R&D department to come up with new ideas.
B) A company reviews the sales, costs, and profit projections of an existing product.
C) A company partners with a design agency to create a few prototypes.
D) A company hires a marketing agency to generate new product ideas.
E) A company creates a forum where anyone can contribute new product ideas.

Question 8

Which of the following statements is most likely true about the new product development process?

A) In most cases, concept testing is followed by concept development.
B) Most firms discourage employees from contributing new product ideas because of legal concerns.
C) A product concept should be developed for each idea before it goes through idea screening.
D) The first step in developing a new product involves determining any budgetary or distribution limitations.
E) Customers, competitors, distributors, and suppliers are major sources of new product ideas.

Question 9

A detailed version of a product idea stated in meaningful consumer terms is a .

A) product concept
B) product feature
C) product framework
D) product image
E) product idea

Question 10

The second part of the marketing strategy outlines which three parts?

A) planned price; distribution; marketing budget for the next year
B) price only for the next year
C) price; marketing budget and profits for the next five years.
D) target market; distribution; profit goals for three years
E) target market; planned value proposition; sales, market-share, and profit goals for two years

Question 11

List and explain some of the reasons why new products fail.

Question 12

The new product development process usually starts with _.

A) idea screening
B) market strategy development
C) idea generation
D) concept development
E) concept testing

Question 13

Which of the following steps of the new product development process would most likely use an R-W-W framework?

A) idea screening
B) commercialization
C) test marketing
D) concept testing
E) idea generation

Question 14

Acquisitions do not include .

A) developing a product
B) buying a patent
C) purchasing a whole company
D) buying a license
E) opening a franchise

Question 15

Doggie World tested an idea for a new chew toy that would entertain dogs while simultaneously cleaning their teeth. Dog owners were pleased with the results. The next stage in developing the new product concept is .

A) idea screening
B) test marketing
C) product development
D) marketing strategy development
E) business analysis

Question 16

By one estimate 60% of all new consumer packaged products introduced by established companies fail.

Question 17

Companies like 3M, Google, and Sony have that encourage employees to develop new ideas.

A) government agencies
B) intrapreneurial programs
C) marketing research firms
D) competitors' ads
E) trade magazines

Question 18

The stage in which product ideas are presented to groups of target consumers physically or symbolically is referred to as _.

A) marketing strategy development
B) crowdsourcing
C) concept development
D) concept testing
E) test marketing

Question 19

Safari Unlimited recently conducted national research to generate ideas for a new line of fatigues geared to women. The company uncovered a number of ideas about clothing and accessory preferences as well as important benefits such as built-in sunblock and durability. The Safari Unlimited product development team will most likely use next to arrive at a realistic number of products for the new fatigues line.

A) business analysis
B) concept development
C) idea screening
D) concept testing
E) crowdsourcing

Question 20

The style, ease of use, and multi-blade technology of Gillette's Fusion razor system is a _ that has favourably impacted consumer perceptions about other new products sold by the company.

A) product feature
B) product framework
C) product audit
D) product image
E) product concept

Question 21

Under a product development approach, one company department works to complete its stage of the product development process before passing the new product along to the next department and stage.

A) cross-sectional
B) sequential
C) systematic
D) team-based
E) simultaneous

Question 22

The team-based new product development approach saves times and increases effectiveness because departments work closely together in _ _.

A) cross-functional teams
B) problem-solving teams
C) independent groups
D) self-managed groups
E) divisional teams

Question 23

Using , researchers measure consumer responses to new products and marketing tactics in laboratory stores or virtual online shopping environments.

A) standard test markets
B) business analysis
C) controlled test markets
D) concept development
E) simulated test markets

Question 24

Under a new product development approach, company departments work closely together in cross-functional groups, overlapping the steps in the product development process to save time and increase effectiveness.

A) systematic
B) cross-sectional
C) sequential
D) team-based
E) simultaneous

Question 25

Above all else, new product development must be .

A) based on competitive products
B) generated by teams of external consultants
C) internally developed
D) customer centred
E) none of the above

Question 26

In which of the following cases is little or no test marketing most likely recommended for a new product?

A) when management is unsure of the marketing program for the product
B) when the risks associated with introducing the product are high
C) when management is unsure of the projected demand for the product
D) when the costs of developing and introducing the product are low
E) when the product requires a major investment

Question 27

At Fantastic Flavours, a large regional chain of candy stores, employees from marketing, design, production, and finance departments work in cross-functional groups to save time and money in the new product development process. From this description, it can be inferred that Fantastic Flavours uses a(n) _ approach.

A) simulated test market
B) controlled test market
C) sequential new product development
D) team-based new product development
E) intradepartmental new product development

Question 28

Introducing a new product into the market is called .

A) segmentation
B) product development
C) commercialization
D) test marketing
E) market penetration

Question 29

Evans and Hills, a beverages manufacturing company, has developed a new line of specialty teas and is seeking regular input from the test marketing process. To facilitate this process, the firm uses BuyerScan, a software that generates store-by-store, week-by-week reports on the actual sales of tested products and the impact of in-store and in-home marketing efforts. Which of the following approaches does this scenario illustrate?

A) inventory tracking
B) simulated test markets
C) direct commercialization
D) standard test markets
E) controlled test markets

Question 30

Taco Bell test marketed Doritos Locos Tacos for three years and developed 45 prototypes. Once the decision was made to launch the new taco shell, it moved into the stage of the new product development process.

A) commercialization
B) strategy development
C) concept development
D) test marketing
E) product development

Question 31

Which of the following is a disadvantage of a team-based approach to new product development?

A) Organizational confusion and tension sometimes affect the process.
B) It lengthens the time required to get the right products to market.
C) The process is highly ineffective for products with short life cycles.
D) A bottleneck at one place can seriously hinder the entire project.
E) It involves the use of a rigid, sequential product development approach.

Question 32

Foods International is developing a new gluten-free, chili-flavoured pretzel. The marketing strategy for the product has already been developed and presented to top management. Several prototypes were also formulated by the company's R&D team. The final prototype is now being tested rigorously to ensure that it passes FDA standards. Once approved, the next step will most likely be .

A) business analysis
B) internal marketing
C) portfolio analysis
D) commercialization
E) test marketing

Question 33

A company launching a new product must first decide _.

A) how to launch the product
B) the viability of a global launch
C) the sample size of the market
D) when to launch the product
E) the budget for print advertising

Question 34

In a sequential new product development process, which of the following is true of the product development step?

A) Product development is usually followed by test marketing.
B) Product development helps top management review profit projections.
C) Product development involves introducing a product into realistic market settings.
D) Product development is usually followed by a business analysis of the product.
E) Product development avoids testing products on actual customers due to liability concerns.

Question 35

gives management the information needed to make a final decision about whether to launch the new product.

A) Research and development
B) Product development
C) Product testing
D) Test marketing
E) Business analysis

Question 36

Sleek Designs Inc. is producing its first eReader. The company is striving to overcome some of the issues communicated by customers about competitive products including screen glare and product bulkiness. Sleek Designs Inc. is using a approach in their new product development process.

A) customer-centred
B) team-based
C) systematic
D) sequential
E) supply/demand

Question 37

Hollingsworth is a retail company that is planning to release a new line of luxury personal care products. Its managers are now reviewing the sales history of similar products and conducting marketing surveys to estimate minimum and maximum sales for the product. In which of the following stages of the new product development process is the product?

A) test marketing
B) marketing strategy development
C) concept testing
D) business analysis
E) idea screening

Question 38

If a product passes both the concept test and the product test, the next step is most likely to be _.

A) marketing strategy development
B) test marketing
C) product development
D) business analysis
E) concept development

Question 39

refers to designing a plan for a new product based on the product concept.

A) Concept screening
B) Business analysis
C) Marketing strategy development
D) Idea generation
E) Test marketing

Question 40

involves a review of the sales, costs, and profit projections for a new product to determine whether they satisfy a company's objectives.

A) SWOT analysis
B) Portfolio analysis
C) Vendor analysis
D) Business analysis
E) Concept analysis

Question 41

Companies often sponsor employee 'hackathons' or encourage employees to develop new product ideas. When companies promote innovation from within its ranks (employees) they are really promoting intrapreneurship.

Question 42

Product development usually costs the least among all the steps of the new product development process.

Question 43

The business analysis stage is the final step in the new product development process.

Question 44

Briefly describe the steps in the new product development process.

Question 45

A sequential product development approach is team-oriented, enabling firms to bring products to market very quickly.

Question 46

During concept testing, a product is evaluated by management without any input from external sources.

Question 47

In the team-based approach, if one area hits snags, it works to resolve them while the team moves on.

Question 48

The innovation management system approach shows that shareholders support, encourage, and reward innovation.

Question 49

Customer involvement has a positive effect on the new product development process and product success.

Question 50

Under a team-based new product development approach, company departments work closely together in cross-functional teams. Overlapping the steps in the product development process saves time and increases effectiveness.

Question 51

Commercialization focuses on finding new ways to solve customer problems and create more customer satisfying experiences.

Question 52

A new product must have the required functional features and also convey the intended psychological characteristics.

Question 53

Salon Finish is test marketing its new smoothing shampoo by assessing consumer satisfaction in laboratory stores where hair is washed and blown dry. Salon Finish is using controlled test marketing in this scenario.

Question 54

What are the major external sources of new product ideas? What type of information can be gathered from each of these sources? How do firms benefit from such information?

Question 55

It's important for a market pioneer to choose a launch strategy that is consistent with competitive positioning strategies.

Question 56

Under the innovative management system approach, one company department works individually to complete its stage of the process before passing the new product along to the next department and stage.

Question 57

What is crowdsourcing? How is crowdsourcing useful in new product development?

Question 58

Companies that combine a customer-centred approach with team-based new product development gain a big competitive edge by getting the right new products to market faster.

Question 59

An innovation management system would most likely be used by .

A) suppliers to access inventory information
B) brand managers to collect, review, and evaluate new product ideas
C) product managers to track logistics of a new product
D) managers to update details about customer information
E) human resource managers to update information on employee incentives

Question 60

Crowdsourcing refers to inviting broad communities of people-customers, employees, independent scientists and researchers, and even the public at large-into the new product innovation process.

Question 61

Which of the following is true of the growth stage of the product life cycle?

A) Sales start climbing quickly.
B) Early adopters stop buying the product.
C) New competitors avoid the market.
D) Profits are nonexistent at this stage.
E) Prices tend to increase significantly.

Question 62

Define commercialization. Explain the two important issues that a company must decide during this stage.

Question 63

Fad products like 'Heely's' (Shoes with wheels in the heels), Fidget Spinners, Slinkys, and Hoola Hoops are characterized by their _.

A) low rates of adoption by consumers
B) basic and distinctive modes of expression that seldom become unpopular
C) unusually high sales and rapid decline
D) non-attainment of the last two stages of the product life cycle
E) enduring nature that spans several generations

Question 64

Which of the following is true about the introduction stage of a new product?

A) Companies tend to avoid basic versions of the product.
B) Less money is needed to attract distributors.
C) Sales growth tends to be slow.
D) Promotion spending is relatively low.
E) Profits are typically high.

Question 65

can describe a product class, a product form, or a brand.

A) The product life cycle concept
B) Vendor analysis theory
C) Business analysis theory
D) The product development process
E) Portfolio analysis

Question 66

Colonial furniture has been in existence since the 1600s and continues to adorn homes today. According to the product life cycle concept, it would be described as a .

A) style
B) drift
C) fashion
D) trend
E) fad

Question 67

Explain what happens during the business analysis stage of new product development.

Question 68

Craft Inc.'s Krayons is a multi-colour chalk material that was released in the market over a century ago. Since the release, the company has had remarkable sales and Krayons has remained unchanged. However, over the last few years, sales of Krayons have been stagnant. Competitors have begun marking prices down and increasing their advertising and sales promotions. Craft's Krayons is most likely in the stage of the product life cycle.

A) decline
B) introduction
C) growth
D) incubation
E) maturity

Question 69

Distinguish between a product idea, a product concept, and a product image.

Question 70

Which of the following statements is most likely true about the product life cycle?

A) Profits are nonexistent in the growth stage.
B) Growth is a period of rapid market acceptance and increasing profits.
C) Throughout the product introduction stage, sales are zero.
D) The growth stage is the longest stage of the product life cycle.
E) Maturity is the period when sales fall off but profits continue to rise.

Question 71

In which stage of the product life cycle will promotional expenditures be significantly high in an attempt to create consumer awareness of a product and its features?

A) adoption
B) growth
C) maturity
D) product development
E) introduction

Question 72

What is test marketing? What role does it play in new product development? What factors do firms consider when determining whether or not to conduct test marketing?

Question 73

Which of the following is true of the product life cycle (PLC)?

A) Product forms have longer life cycles than product classes.
B) The PLC concept can be applied to styles but not to fashions and fads.
C) It is generally difficult to forecast the sales level at each PLC stage.
D) All products pass through the stages of PLC in the same order.
E) All products generally go through all five stages of the PLC.

Question 74

Appliances Galore is continually updating its line of refrigerators to reflect market trends and customer needs. Although the product class is in the maturity stage of the product life cycle, they maintain healthy sales of their
Line of refrigerators by continually .

A) modifying the product
B) concept testing
C) rebranding
D) modifying the marketing mix
E) modifying the market

Question 75

When a product is in the stage, profits level off or decline because of increased marketing outlays to defend the product against competition.

A) test marketing
B) conception
C) maturity
D) decline
E) production

Question 76

A currently accepted or popular style (for example, 'Business casual') represents an example of a .

A) fashion
B) fad
C) style
D) drift
E) form

Question 77

Explain what happens during the concept testing stage of new product development.

Question 78

A product life cycle has five distinct stages: product development, introduction, growth, maturity, and .

A) progression
B) stabilization
C) rebranding
D) segmentation
E) decline

Question 79

Discuss macro-environmental factors that may impact the release of a new product into the market.

Question 80

In the _ stage, a firm most likely faces a trade-off between high market share and high current profit.

A) introduction
B) maturity
C) commercialization
D) growth
E) decline