Deck 9: Product Management and New-Product Development

Question 1

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

Answer 1

False
Explanation: During the sales decline stage, price competition from dying products becomes more vigorous but firms with strong brands may make profits until the end because they have successfully differentiated their products.

Question 2

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

Answer 2

True
Explanation: The sales and profits of an individual brand may not, and often do not follow the life-cycle pattern. They may vary up and down throughout the life cycle-sometimes moving in the opposite direction of industry sales and profits.

Question 3

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

Answer 3

False
Explanation: Sales and profits do not move together over time. Industry profits can decline while industry sales are still rising.

Question 4

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

Question 5

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

Question 6

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

Question 7

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

Question 8

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

Question 9

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 10

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

Question 11

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

Question 12

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

Question 13

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 14

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

Question 15

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

Question 16

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

Question 17

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

Question 18

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 19

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 20

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

Question 21

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

Question 22

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

Question 23

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

Question 24

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

Question 25

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

Question 26

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 27

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

Question 28

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

Question 29

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

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

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 32

A fad cycle is shorter than a fashion cycle.

Question 33

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

Question 34

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 35

Fashion-related products tend to have short life cycles.

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

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

Question 38

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

Question 39

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

Question 40

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

Question 41

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

Question 42

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

Question 43

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 44

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 45

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 46

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

Question 47

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

Question 48

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

Question 49

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

Question 50

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

Question 51

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

Question 52

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

Question 53

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

Question 54

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 55

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 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

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

Question 58

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

Question 59

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

Question 60

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 61

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

Question 62

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

Question 63

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 64

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

Question 65

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

Question 66

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

Question 67

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

Question 68

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

Question 69

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

Question 70

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 71

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

Question 72

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

Question 73

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

Question 74

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 75

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

Question 76

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

Question 77

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

Question 78

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

Question 79

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

Question 80

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