Deck 11: Product Management and New-Product Development

Question 1

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

Answer 1

True
Explanation: Firms with strong brands may make profits until the end because they have successfully differentiated their products.

Question 2

The product life cycle describes the stages a really new product idea goes through from beginning to end.

Answer 2

True
Explanation: The product life cycle describes the stages a really new product idea goes through from beginning to end.

Question 3

Industry profits usually decline steadily during the market maturity stage of the product life cycle.

Answer 3

True
Explanation: During the market maturity stage, sales level off and profits continue to go down.

Question 4

During the market growth stage of the product life cycle,industry profits usually reach their peak and begin to decline.

Question 5

In the market introduction stage,sales are low as a new idea is first introduced to a market.

Question 6

The market maturity stage of the product life cycle has very low promotion expenditures,little price competition,and rising industry profits.

Question 7

The sales and profits of an individual brand always follow the life-cycle pattern.

Question 8

The product life cycle shows that sales of an individual firm's brand follows a general pattern-which is very useful for marketing strategy planning.

Question 9

The product life cycle concept is concerned with planning for product recycling to protect the environment.

Question 10

Sales and profits generally decrease continually throughout the product life cycle.

Question 11

The market introduction stage of the product life cycle is usually marked by losses,as money is being invested in the hope of future profits.

Question 12

During the sales decline stage of the product life cycle,no firm can earn a profit.

Question 13

Market introduction,market growth,market maturity,and sales decline are the four stages of the product life cycle.

Question 14

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

Question 15

Product life cycles describe industry sales and profits within a particular product-market,and not the sales and profits of individual brands.

Question 16

In the market growth stage of the product life cycle,firms usually earn smaller profits than they did in the market introduction stage because new competitors enter the market.

Question 17

The sales and profits of an individual brand may or may not follow the life cycle pattern of the product idea.

Question 18

The product life cycle is the four stages a new product idea goes through from beginning to end.

Question 19

During the various stages of the product life cycle,the attitudes and needs of target customers do not change.

Question 20

The market maturity stage of the product life cycle rarely lasts more than one or two months.

Question 21

Sales growth is usually faster when the product is incompatible with the past values and experience of the target market.

Question 22

In general,product life cycles appear to be getting longer in recent years.

Question 23

To fully understand the nature of competition and the speed of the relevant product life cycle,it is important not to define a market too narrowly.

Question 24

Marketing strategy planning for a product depends on where the product is in its life cycle and how fast it is moving to the next stage.

Question 25

Sales growth is faster when a new product is easy to use and its advantages are easy to communicate.

Question 26

The length of each stage in the product life cycle is set.

Question 27

A fad is an idea that is fashionable only to certain groups who are enthusiastic about it.

Question 28

Fashion-related products tend to have short life cycles.

Question 29

The smaller the comparative advantage of a new product over those already on the market,the faster its sales will grow.

Question 30

A product idea may be in different life-cycle stages in different markets.

Question 31

A fad cycle is shorter than a fashion cycle.

Question 32

It is possible for a firm with a mature product in the U.S.to experience new growth with the same product in international markets.

Question 33

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.

Question 34

It is easy for marketing managers to predict how long a product or brand will stay in each stage of the product life cycle.

Question 35

The probable length of the product life cycle has little effect on strategy planning.

Question 36

The product life-cycle concept tells a manager how long each stage of the cycle will last.

Question 37

The stage of the product life cycle in which competitors are most likely to introduce product improvements is the market growth stage.

Question 38

The more narrowly we define a product-market,the shorter the product life cycle because improved product ideas come along to replace the old.

Question 39

Fad products are characterized by popular styles and they appeal to the mass market.

Question 40

A firm may introduce or withdraw a product during any stage of the product life cycle.

Question 41

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.

Question 42

If the prospects in some product-market are poor,a firm may need a "phase out" strategy.

Question 43

A continuous innovation requires significant change in customer behavior.

Question 44

A new-product development process helps make sure that new ideas for products are carefully studied and good ideas are marketed profitably.

Question 45

When a firm's product has won loyal customers,it can be successful for a long time-even in a mature or declining market.

Question 46

In the new-product development process,the burden is on the new-product idea to prove itself or be rejected.

Question 47

The strategies for all stages of the product life cycle should be growth strategies.

Question 48

Even in a full-scale market test,the firm is testing only the product,not the whole marketing mix.

Question 49

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

Question 50

It is always in the best interest of the market pioneer for competitors to stay out of the market.

Question 51

The first step in new-product development is evaluating ideas.

Question 52

If an individual is injured by a defective or unsafely designed product,the seller's legal obligation to pay damages is called product liability.

Question 53

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

Question 54

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

Question 55

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

Question 56

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.

Question 57

Variations on an existing product idea can make a product new.

Question 58

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

Question 59

A product that is new in any way for the company concerned is a new product.

Question 60

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

Question 61

Product managers are especially common in small,single-product companies.

Question 62

Product liability means the legal obligation of sellers to pay damages to individuals who are injured by defective or unsafe products.

Question 63

The Japanese success showed that one of the biggest costs of poor quality is lost customers.

Question 64

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

Question 65

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

Question 66

Simply showing customer-contact employees around the rest of the business-so that they learn how their contribution fits in the total effort-can be a key part of their training.

Question 67

Brand managers manage specific products,often taking over the jobs formerly handled by an advertising manager.

Question 68

Relative to most other countries,the U.S.has very strict product liability standards.

Question 69

In general,top management support is needed for successful new-product development efforts.

Question 70

With total quality management (TQM),a company's management makes the marketing department solely responsible for quality and customer service.

Question 71

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

Question 72

The total quality management approach recognizes that defects are an inevitable part of mass production,and that the cost of replacing defective goods is just a cost of doing business.

Question 73

"Continuous improvement" means a commitment to constantly make things better-one step at a time.

Question 74

Total quality management applies when the firm's product is a physical good,but not if it is a service.

Question 75

Total quality management can be used to improve any implementation effort.

Question 76

Product managers or brand managers are most often found in firms with only one or a few related products.

Question 77

The two keys to improving how people implement quality service are: (1)training and (2)more inspectors.

Question 78

Empowerment means giving employees the authority to correct a problem on their own.

Question 79

Many companies look to the developing world for breakthrough new products that meet global consumer needs at low cost.

Question 80

New-product development usually fits into the old routines of a firm,so it is not necessary for top management to support new-product development in any special way.