Question 1

Microsoft's Windows operating system continues to dominate the market,even though it has been around for over twenty years.Windows will likely remain in the maturity stage of the product life cycle

Accepted Answer

A)   indefinitely.
B)   until it rules the world.
C)   until a superior product comes along to replace it.
D)   unless Microsoft repositions Windows as an introductory stage product.
E)   as long as the company doesn't change it. C

Question 2

For new product marketers,early adopters are important because they tend to be

Accepted Answer

A)   few in number.
B)   the first to adopt a new product.
C)   opinion leaders.
D)   fond of prototypes.
E)   alpha testing enthusiasts. C

Question 3

When Toyota introduced hybrid cars,there were waiting lists to buy them.Then Honda and a few other manufacturers entered the market,shifting the product life cycle for hybrid cars into the _____________ stage of the product life cycle.

Accepted Answer

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

Question 4

Which of the following is NOT a characteristic of products in the maturity stage of the product life cycle?

Accepted Answer

A)   Laggards are a major focus of marketing efforts.
B)   Price competition is intense.
C)   Marketing costs increase as firms defend their market share.
D)   The market may become saturated because nearly all potential customers have adopted the product.
E)   To increase the customer base,firms consider entry into new markets and new market segments.

Question 5

Computer game companies constantly monitor computer game-related blogs keeping track of the latest hot products,because they know that their customers crave the "latest and greatest" games.They use this information to create new products that primarily provide the benefit of

Accepted Answer

A)   keeping up in a market where sales come mostly from new products.
B)   satisfying the changing needs of former customers.
C)   avoiding market penetration from products that have been on the market for a long time.
D)   creating diversification and reducing risk.
E)   taking advantage of a long product cycle.

Question 6

General Electric is developing a new magnetic resonance imaging (MRI)device to be marketed to family practice physicians.These new machines will be much smaller and less expensive than the existing MRI machines now in most hospitals.What factors will probably affect the diffusion of these new machines?

Accepted Answer

The answer of General Electric is developing a new magnetic...

Question 7

Lorraine belongs to a national consumer panel created by a market research company.She regularly receives samples of new products from a variety of firms and fills out questionnaires about the products.The national consumer panel Lorraine is part of is engaged in

Accepted Answer

A)   premarket testing.
B)   product launch.
C)   test marketing.
D)   product development.
E)   concept testing.

Question 8

The ________________ diffusion of innovation group is crucial because few new products can be profitable until this large group buys them.

Accepted Answer

A)   innovator
B)   laggard
C)   late majority
D)   early majority
E)   early adopter

Question 9

By adding new product lines beyond its core business of computer software,like the Zune MP3 player and XBox 360 game system,Microsoft primarily benefits by

Accepted Answer

A)   keeping up in a market where sales come mostly from new products.
B)   satisfying the changing needs of the technological research staff.
C)   avoiding market saturation from products that have just been introduced to the market.
D)   creating diversification and reducing risk.
E)   spreading out production costs.

Question 10

The growth phase of the product life cycle is always dynamic.Which of the following does NOT occur in this phase?

Accepted Answer

A)   Profits increase as sales increase.
B)   Profits increase as economies of scale are attained.
C)   Some new competitors may enter the market with similar products.
D)   Some competitors will exit in an "industry shakeout."
E)   Price competition with protracted price wars erodes profits.

Question 11

One of the key characteristics of brainstorming sessions is that bad ideas should be immediately rejected so the group can focus its attention on good ideas.

Accepted Answer

A) True 
 B)False

Question 12

By the time BMW got into the mini-SUV market,sales had leveled off and were even starting to decline.BMW had to target its marketing efforts toward the _________________ diffusion of innovation group.

Accepted Answer

A)   innovator
B)   laggard
C)   late majority
D)   early majority
E)   early adopter

Question 13

As personal computers became popular,the sale of typewriters decreased significantly and now typewriters are only used by a very small segment of consumers.Typewriters are in the maturity stage of the product life cycle.

Accepted Answer

A) True 
 B)False

Question 14

The diffusion of innovation theory is useful to marketers in helping them

Accepted Answer

A)   adjust to the performance life cycle.
B)   avoid the cost of concept testing.
C)   predict which types of customers will buy their product immediately and later.
D)   predict how long it will take for a new product to gain market acceptance.
E)   forecast sales for a new product.

Question 15

Zappos.com,an online shoe store,worked to overcome the problem of new product ______________ with its easy,no hassle return procedure.

Accepted Answer

A)   relative advantage
B)   compatibility
C)   observability
D)   complexity
E)   trialability

Question 16

Early personal computers cost several thousand dollars,allowing competitors

Accepted Answer

A)   to focus on creating demand for their brand.
B)   to promote alternative brands in that product category.
C)   to spend less on introductory advertising.
D)   to focus on making improved versions.
E)   to introduce lower-priced alternatives.

Question 17

Jennifer has just taken over a line of organic teas for her company.She looks at the company records and sees sales have peaked,profit margins are declining,and there are many new competitors in that category.Which stage of the product life cycle are her teas in?

Accepted Answer

The answer of Jennifer has just taken over a line...

Question 18

Before Segway manufactured their two-wheeled people movers,they built a prototype and had staff engineers test it for performance and stability.At this stage,Segway was involved in

Accepted Answer

A)   alpha testing.
B)   product launch.
C)   test marketing.
D)   beta testing.
E)   concept testing.

Question 19

When testing new products,most firms consider the question of whether testing products on animals

Accepted Answer

A)   should always be done in the animal's natural environment.
B)   should be done outside of the United States to avoid consumer backlash.
C)   should be done when the new product does not contribute to the health and well being of human users.
D)   should be done only by companies large enough to be ethically responsible.
E)   should be done with animal activists present.

Question 20

In the United States,most consumer packaged goods found in grocery and discount stores are in the ________ stage of the product life cycle.

Accepted Answer

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

Exam 12: Developing New Products