Deck 13: Conceiving, Developing, and Managing Products

Question 1

Which statement concerning product modifications is NOT correct?

A) Major innovations involve greater risk, but higher possible payoffs than minor innovations.
B) Modifications are alterations in or extensions of a firm's existing products.
C) Modifications include new models, styles, colors, features, and brands.
D) Most new products are major innovations.

Answer 1

Most new products are major innovations.

Question 2

Which of these best illustrates a minor innovation?

A) A modification of an existing product or an innovation that the consumer perceives as meaningful
B) An alteration in or extension of a firm's existing products
C) Items not previously marketed by any firm
D) Items not previously marketed by a firm that have been marketed by others

Answer 2

Items not previously marketed by a firm that have been marketed by others

Question 3

Which of these best illustrates a major innovation?

A) An item not previously sold by a firm that has been marketed by others
B) A modification of an existing product or an innovation that the consumer perceives as meaningful
C) An alteration in or extension of a firm's existing products
D) An item not previously sold by any firm

Answer 3

An item not previously sold by any firm

Question 4

Which statement concerning the product life cycle is NOT correct?

A) The product life cycle concept encourages firms to have a balanced product portfolio.
B) The product life cycle concept encourages firms to have products with different competitive product positionings.
C) A firm needs to change its marketing mix to reflect a product's life cycle position.
D) The product life cycle can be applied to a product class, a product form, and a brand.

Question 5

An extended fad product life-cycle pattern is characterized by

A) a sharp decline in sales after a product's introduction.
B) high seasonal sales or a high fashion component.
C) residual sales that continue at a lower level than earlier sales.
D) a product that maintains sales over a long time period.

Question 6

The introduction stage of the traditional product life cycle is characterized by

A) high total and unit profits.
B) substantial competition.
C) an expanding product line.
D) a product mix consisting of one or two basic models.

Question 7

The growth stage of the product life cycle is characterized by

A) a stable sales pattern.
B) high total and unit profitability.
C) the greatest degree of competition.
D) the greatest number of distribution outlets available.

Question 8

Competition is at its highest level in which product life-cycle stage?

A) Introduction
B) Maturity
C) Growth
D) Decline

Question 9

The decline stage of the product life cycle is characterized by the

A) development and sale of substitutes for a product.
B) highest level of product competition.
C) beginning of discounting by a firm and its competitors.
D) expansion of distribution.

Question 10

Which statement about the evaluation of the product life cycle is NOT correct?

A) A firm can manage the product life cycle through developing an appropriate marketing mix.
B) It may be difficult to forecast a product's life-cycle shape.
C) Different firms may have similar products in different stages of the product life cycle.
D) It is virtually impossible to reverse a decline in sales once a product has reached maturity.

Question 11

With a self-fulfilling prophecy, a firm incorrectly

A) seeks out the largest, but most competitive, market segment.
B) assesses its ability to reverse a downward sales pattern.
C) removes marketing support from a product that requires additional support to grow.
D) seeks out an incorrect international market.

Question 12

Which of the following is NOT a major reason for the importance of new products to a company?

A) New products can utilize waste materials and byproducts of existing products.
B) New products are generally necessary to maintain a balanced portfolio.
C) New products can reduce a firm's total investment requirements.
D) New products can help maximize the efficiency of a firm's distribution system.

Question 13

Absolute product failure occurs when a firm

A) withdraws a product after test marketing.
B) is unable to regain its production and marketing costs.
C) does not meet its sales and/or profit expectations.
D) withdraws a product prior to commercialization.

Question 14

In absolute product failure, a new product

A) takes sales away from existing products.
B) has a net loss.
C) does not meet its sales and/or profit expectations.
D) is withdrawn during the introduction stage of the product life cycle.

Question 15

In relative product failure, a new product

A) takes sales away from existing products.
B) has a net loss.
C) does not meet its sales and/or profit expectations.
D) is withdrawn during the introduction stage of the product life cycle.

Question 16

Which of these is NOT generally regarded as a major cause of either absolute or relative product failure?

A) Poor timing
B) Lack of a strong differential advantage
C) Excessive enthusiasm by the sponsor
D) Reliance on technology that is too innovative

Question 17

The new-product planning process involves a series of steps from

A) introduction to decline.
B) introduction to commercialization.
C) idea generation to commercialization.
D) product screening to commercialization.

Question 18

A company generates ideas, evaluates them, weeds out poor ones, gets consumer feedback, devises the product, tests it, and brings it to the market in

A) the product life-cycle process.
B) the new-product planning process.
C) the adoption process.
D) internal product development.

Question 19

The idea generation stage of the new-product planning process most closely refers to

A) measuring consumer attitudes and intensions concerning a proposed new product.
B) weeding out poor and unsuitable ideas from further consideration.
C) a continuous, systematic search for new product opportunities.
D) converting a new product into a tangible form and identifying a basic marketing strategy.

Question 20

Market-oriented sources seek to identify opportunities on the basis of

A) an analysis of competitive offerings.
B) conducting pure or applied scientific research.
C) an analysis of consumer wants and needs.
D) performing minor modifications of existing products.

Question 21

The use of small-group sessions which are designed to come up with a variety of ideas for new products is

A) pure research.
B) concept testing.
C) applied research.
D) brainstorming.

Question 22

In which stage of the new-product planning process is brainstorming used?

A) Test marketing
B) Idea generation
C) Product development
D) Concept testing

Question 23

The basic means of analysis in the product screening stage is a

A) present value analysis.
B) break-even analysis.
C) checklist.
D) PERT chart.

Question 24

In which stage of the new-product planning process are weighted product/market attributes and cutoff scores used?

A) Product screening
B) Idea generation
C) Concept testing
D) Business analysis

Question 25

Which statement concerning patents is NOT correct?

A) The standard patent protection period in the United States is 20 years from the date the application is filed.
B) A patent grants its owner exclusive selling rights for an indefinite period.
C) Many countries have simplified patent protection via patent cooperation treaties.
D) Separate patent applications are needed for protection in foreign countries.

Question 26

Evaluation of a new product's patentability is first performed in which stage of the new-product planning process?

A) Business analysis
B) Idea generation
C) Commercialization
D) Product screening

Question 27

In which stage of the new-product planning process is the consumer presented with a description or picture of a proposed product and then asked to evaluate his/her purchase intentions or to express his or her attitudes?

A) Business analysis
B) Concept testing
C) Test marketing
D) Commercialization

Question 28

In which stage of the new-product planning process is a consumer asked "Is the idea easy to understand?" and "Would you buy the product?"

A) Idea generation
B) Product screening
C) Concept testing
D) Brainstorming

Question 29

In which new-product planning stage does a firm seek to determine the rate of return on the total investment for a new product on the basis of projections of demand, costs, and investment?

A) Business analysis
B) Product development
C) Concept testing
D) Product screening

Question 30

Demand and cost projections, competition, and profitability are carefully studied in which new-product planning stage?

A) Business analysis
B) Product development
C) Concept testing
D) Product screening

Question 31

The product development stage of the new-product planning process is characterized by the

A) creation of a sample product and the development of a basic marketing strategy.
B) estimation of return on investment.
C) measurement of consumer attitudes and intentions to buy.
D) determination and monitoring of a product's sales.

Question 32

Product construction, packaging, branding, and product positioning decisions are first needed during which stage of the new-product planning process?

A) Commercialization
B) Introduction
C) Test marketing
D) Product development

Question 33

A firm first positions a new product offering relative to competitors and its own brands during which stage of the new-product planning process?

A) Test marketing
B) Introduction
C) Commercialization
D) Product development

Question 34

A new product's actual sales performance is measured in

A) business analysis.
B) concept testing. .
C) test marketing.
D) commercialization

Question 35

Test marketing is most accurately characterized by the

A) development of a prototype product.
B) development of a basic marketing strategy.
C) use of a real setting.
D) study of consumers' intention to buy.

Question 36

Dissatisfaction with test marketing may be based on

A) the time delays required before full introduction.
B) a lack of dealer interest in additional brands.
C) the superiority of attitude measurement over actual sales data.
D) a concern over what data to monitor: sales, market share, or shelf space allocated.

Question 37

A major disadvantage associated with test marketing is the difficulty in

A) determining necessary product modifications if a product sells poorly.
B) predicting national (global) sales performance in a limited geographic area to the overall U.S. market.
C) assessing the reactions of competitors to new products.
D) determining true incremental sales levels for the new product.

Question 38

Which stage of the product life cycle most closely corresponds to the commercialization stage of the new-product planning process?

A) Introduction
B) Decline
C) Growth
D) Maturity

Question 39

During what stage of the new-product planning process does a firm implement its entire marketing program?

A) Commercialization
B) Test marketing
C) Introduction
D) Product development

Question 40

The mental and behavioral procedure an individual goes through when learning about and purchasing a new product is examined in the

A) brand awareness-aversion process.
B) consumer decision-making process.
C) diffusion process.
D) adoption process.

Question 41

In the confirmation stage of the adoption process, a consumer

A) develops a favorable or unfavorable attitude about a new product.
B) engages in actions that lead to a choice to either adopt or reject a product.
C) uses a product.
D) seeks reinforcement about a product's desirability and may reverse a decision if exposed to conflicting messages.

Question 42

In which situation will a product have a slow rate of adoption?

A) Consumers have a high discretionary income.
B) Product importance is high.
C) The product represents low overall perceived risk.
D) Product attributes can be easily communicated.

Question 43

A product will have a rapid rate of adoption if

A) product importance is high.
B) consumers have low discretionary income.
C) perceived risk is high and the product is a major innovation.
D) the product is compatible with current lifestyles.

Question 44

The diffusion process describes the

A) development of brand loyalty among the target market.
B) purchase behavior (mental and behavioral) of an individual consumer.
C) brand awareness/aversion process.
D) manner in which different members of a target market often accept and purchase a product.

Question 45

Innovators, early adopters, and laggards are studied as part of which process?

A) The adoption process
B) The diffusion process
C) The commercialization process
D) The market penetration and saturation process

Question 46

In the diffusion process, innovators tend to be

A) opinion leaders, and to adopt new ideas with discretion.
B) aggressive, communicative, and worldly.
C) tradition bound, conservative, and suspicious of change.
D) socially aggressive, cosmopolitan, and willing to accept risk.

Question 47

In the diffusion process, the mass market is comprised of

A) innovators and early adopters.
B) innovators and the early majority.
C) the early majority and the late majority.
D) the late majority and laggards.

Question 48

Which product life-cycle stage corresponds with the use of late majority and laggard groups as target markets?

A) Maturity
B) Decline
C) Fad
D) Bust

Question 49

The last group of consumers to purchase a new product are

A) late adopters.
B) the late majority.
C) post-adopters.
D) laggards.

Question 50

When discontinuing a product, a firm must be sure to

A) lower prices.
B) cut back on advertising.
C) notify customers and resellers to line up alternate suppliers.
D) reduce distribution outlets.

Question 51

The major distinction between a minor innovation and a major innovation is on the basis of

A) a product's newness to the company versus newness to the industry.
B) patent protection.
C) the risk of failure.
D) the degree of competitive advantage.

Question 52

Planned style obsolescence is an example of a(n)

A) minor innovation.
B) major innovation.
C) patentable product.
D) generic product.

Question 53

A firm has applied for a new rechargeable battery powerful enough to run such commercial applications as hedge trimmers and lawn mowers. This product illustrates a(n)

A) major innovation.
B) minor innovation.
C) modification.
D) innovative product.

Question 54

Modifications, minor innovations, and major innovations represent what type of strategy?

A) Market penetration
B) Diversification
C) Product development
D) Market development

Question 55

As a firm changes its emphasis in product strategy from minor modifications to major innovations, the firm's

A) new-product planning process becomes simplified.
B) research and development staff and marketing research staff requirements are substantially increased.
C) time period from the generation of an idea to commercialization decreases.
D) risks and investment requirements decrease.

Question 56

French perfume, blue blazers, and Scotch whiskey are products that have sold well over a long time period. They illustrate which product life-cycle pattern?

A) Traditional
B) Fad
C) Extended fad
D) Classic

Question 57

A manufacturer changes its marketing strategy to offer a three-year warranty (while the rest of the industry offers a one-year warranty) in an attempt to create an important differential advantage in a very competitive market with stable sales. The product is in which product life-cycle stage?

A) Maturity
B) Introduction
C) Growth
D) Decline

Question 58

Which stage of the product life cycle is characterized by the greatest number of outlets and use of the mass market as a target market?

A) Introduction
B) Growth
C) Decline
D) Maturity

Question 59

A major criticism of the product life-cycle concept is the

A) difficulty in varying a firm's strategy to meet objectives for each stage.
B) inability to manage the life-cycle concept.
C) difficulty in forecasting the cycle.
D) inevitability of maturity.

Question 60

Which of these is NOT a major reason behind the importance of new products?

A) Lower research and development budgeted expenses
B) Maintenance of a balanced product portfolio through growth-oriented products
C) Diversification
D) Increased distribution system efficiency

Question 61

The major difference between a relative and an absolute product failure is based upon whether

A) the size of the loss is too large relative to the company's overall net profit.
B) the loss is short run or long run.
C) a company's profit goal is used as criterion of a new product's success.
D) there is a negative impact on the sales of other company products.

Question 62

Total revenues on a new product were less than the firm's production and marketing costs. The new product should be classified as a(n)

A) short-term product failure.
B) long-term product failure.
C) relative product failure.
D) absolute product failure.

Question 63

Which statement concerning absolute and relative product failures is NOT correct?

A) All absolute product failures are relative product failures.
B) A firm can consider a new product to be a relative product failure if it takes sales away from other products.
C) If a product makes a very small profit (that is less than planned), the product is a relative product failure but not an absolute product failure.
D) A product failure can be both a relative and an absolute product failure.

Question 64

In general, as a firm goes through the new-product planning process,

A) a higher proportion of the products are weeded out in each stage.
B) lower-level executives are involved in decision making.
C) the evaluation of products is done more scientifically.
D) the costs associated with the new-product planning process stage increase.

Question 65

Which of these statements is NOT a valid criticism of the use of market-oriented sources of information in the idea generation stage of the new-product planning process?

A) Market-oriented sources are more likely to result in minor innovations rather than major innovations.
B) Market-oriented sources are less likely to determine whether a new product can be economically produced.
C) Market-oriented sources ignore the wishes of consumers.
D) Market-oriented sources tend to view new products in terms of improvements of existing products and not totally new products.

Question 66

A major disadvantage of using laboratory-oriented sources for new product ideas is

A) the high cost associated with pure research.
B) that product ideas may not be viewed as being significant by target market consumers.
C) that product ideas may not be capable of receiving patent protection.
D) that scientists may think only in terms of minor revisions of existing products.

Question 67

Which of these is an example of a laboratory-oriented source of new-product ideas?

A) Studying competitors' products that have been purchased
B) Analyzing mathematical models of consumer demand
C) Adapting technological developments from U.S. government space programs to consumer applications
D) Determining wholesaler preferences on the basis of concept tests

Question 68

A firm seeks new product ideas from customers on the basis of focus group-based market research studies with current product users. The firm employs which idea generation method?

A) Brainstorming
B) A market-orientation
C) A laboratory-orientation
D) Concept testing

Question 69

Compared with product screening, the business analysis stage of the new-product planning process is more apt to be based on

A) a product's competitive positioning.
B) a product's resistance to seasonal factors.
C) consumer purchase intentions.
D) profitability-based analyses.

Question 70

Which attributes are an important part of the product screening checklis?

A) Return on investment, projected sales, and competition
B) Ease of understanding, believability, and likelihood of purchase
C) Seasonality, impact on image, and ease of production
D) Short-run sales, impact on existing products, and dealer enthusiasm

Question 71

A company uses weights of 5 for general characteristics, 4 for marketing characteristics, and 3 for production characteristics. Within these categories, each product idea can be scored on the basis of 1 (outstanding) to 10 (very poor). If a potential new product scores 3.0, 2.0, and 2.5 on the three characteristics, respectively, its overall rating is

A) 2.5.
B) 3.1.
C) 24.5.
D) 30.5.

Question 72

Patentability is a major factor to consider in new-product screening because the use of patents

A) eliminates potential competitors for a period of 12 years.
B) provides the firm with monopolistic powers to the extent that it precludes other firms from successfully competing with the patented product.
C) encourages a firm to have a monopolistic competition environment.
D) reduces the effect of cyclical factors on sales.

Question 73

The Following Questions are linked to this scenario: A car wax company developed a new car wax that is particularly resistant to acid rain. The pollutants in acid rain can cause significant damage to a car's finish.

-The car wax manufacturer conducted new-product research that determined that many car owners were either unaware of the dangers of acid rain, or did not believe the claims made. The technique used to obtain this conclusion is

A) test marketing.
B) concept testing.
C) business analysis.
D) product screening.

Question 74

The Following Questions are linked to this scenario: A car wax company developed a new car wax that is particularly resistant to acid rain. The pollutants in acid rain can cause significant damage to a car's finish.

-Further research by the car wax manufacturer indicated that the proposed product would yield a 10 percent return on the firm's investment. The car wax manufacturer required a minimum of a 15 percent return to further consider the product. The proposed new product was analyzed on the basis of which new-product planning technique?

A) Product screening
B) Business analysis
C) Commercialization
D) Product development

Question 75

The Following Questions are linked to this scenario: A car wax company developed a new car wax that is particularly resistant to acid rain. The pollutants in acid rain can cause significant damage to a car's finish.

-The proposed car wax product would yield a 10 percent return on the firm's investment. The car wax manufacturer required a minimum of a 15 percent return to further consider the product. The new product can be best characterized as a(n)

A) problem child
B) absolute product failure.
C) relative product failure.
D) comparative product failure.

Question 76

The product manager for a pasta sauce has decided to name the new product Tuscan Flavor, to appeal to cooks concerned with fat content, and to position the product as healthy and easy to prepare. During which stage of the new-product planning process is the manager involved?

A) Commercialization
B) Product development
C) Test marketing
D) Product screening

Question 77

Which of the following stages of the new-product planning process is most costly for a major innovation?

A) Product development
B) Concept testing
C) Product screening
D) Business analysis

Question 78

Problems associated with production, such as a new product not meeting technical specifications, generally occur in which new-product planning stage?

A) Test marketing
B) Commercialization
C) Product development
D) Business analysis

Question 79

A product manager learns that only 20 percent of the potential supermarkets have initially agreed to display a new brand of instant coffee in single-serving sizes. Through an extensive couponing effort, an additional 10 percent of the supermarkets have begun to display the new product. In which stage of the new-product planning process would these data be generated?

A) Concept testing
B) Product screening
C) Business analysis
D) Test marketing

Question 80

Test marketing enables a firm to study

A) consumer attitude changes towards a brand.
B) initial consumer attitudes towards a brand.
C) the long-term investment required for increased distribution.
D) the impact of a new product on a firm's existing products.