Deck 10: Product Management and New-Product Development

Question 1

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

Answer 1

False

Question 2

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

Answer 2

False

Question 3

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

Answer 3

True

Question 4

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

Question 5

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 6

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

Question 7

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

Question 8

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

Question 9

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

Question 10

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

Question 11

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

Question 12

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

Question 13

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

Question 14

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

Question 15

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

Question 16

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

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

Question 19

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 20

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 21

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

Question 22

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

Question 23

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

Question 24

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 25

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

Question 26

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 27

Sales growth is faster when the product can be used on a trial basis.

Question 28

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

Question 29

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

Question 30

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 31

Fashion-related products tend to have short life cycles.

Question 32

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

Question 33

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

Question 34

A fad cycle is shorter than a fashion cycle.

Question 35

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

Question 36

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 37

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

Question 38

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

Question 39

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

Question 40

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 41

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

Question 42

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

Question 43

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 44

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

Question 45

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

Question 46

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 47

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 48

A "deficient" product is one which provides low immediate satisfaction and low long-run welfare for consumers.

Question 49

A product that is new in any way for the company concerned is a new product, according to the text.

Question 50

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

Question 51

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

Question 52

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

Question 53

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

Question 54

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

Question 55

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

Question 56

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

Question 57

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 58

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

Question 59

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 60

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

Question 61

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

Question 62

In continuous improvement, the place to start is to clearly define "defects" in the implementation process, from the marketer's point of view.

Question 63

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

Question 64

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.

Question 65

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

Question 66

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

Question 67

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

Question 68

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

Question 69

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

Question 70

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

Question 71

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

Question 72

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

Question 73

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

Question 74

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

Question 75

A Pareto chart is a visual aid that helps organize cause and effect relationships for "things gone wrong."

Question 76

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 77

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

Question 78

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

Question 79

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

Question 80

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