Deck 11: Developing and Managing Goods and Services

Question 1

List and discuss the major phases of the new-product development process.

Answer 1

Answer not provided.

Question 2

A(n) ____ is the development of a product that is closely related to one or more products in the existing product line but is designed specifically to meet somewhat different needs of customers.

A)product modification
B)line extension
C)quality modification
D)functional development
E)aesthetic extension

Answer 2

B

Question 3

In product modification, the first issue to consider is whether

A)existing customers can perceive that a product modification has been made.
B)the product is modifiable.
C)quality is modified.
D)modification will make the product more consistent with customers' desires.
E)modification will provide greater satisfaction to the consumer.

Answer 3

B

Question 4

Discuss the advantages and problems associated with test marketing.

Question 5

Discuss the major approaches that marketers use to differentiate their products.

Question 6

What is commercialization, and how is it achieved?

Question 7

Why and how might an organization delete existing products?

Question 8

In product modification, three conditions must be met to improve a firm's product mix: the product must be modifiable, customers must be able to perceive that a modification has been made, and

A)modification should make the product more consistent with customers' desires.
B)competing companies should not be aware of planned product modifications.
C)modification should change customers' desires to provide greater satisfaction.
D)management must perceive the modification as a reasonable and necessary action.
E)production costs and materials needed should be limited.

Question 9

List and explain the six distinguishing characteristics of service products. Then discuss some of the marketing issues and problems associated with each characteristic.

Question 10

Why is it often difficult for organizations to delete products?

Question 11

What is concept testing, and why is it important?

Question 12

Why are line extensions more common than new products?

A)They are higher risk and more expensive.
B)They are guaranteed to succeed in the marketplace.
C)They are less expensive and lower-risk.
D)They require no market research.
E)Modifications to existing products are very easy.

Question 13

What is the primary distinction between a line extension and a product modification?

A)A product modification results in a completely new product while a line extension is simply changing an old product.
B)In both cases an existing product is altered, but the alteration is more dramatic with a product modification than it is with a line extension.
C)Line extensions are designed to better meet the needs of the existing market segment while product modifications target entirely new segments of the market.
D)With product modifications, the original product is replaced in the product line while both the old and the new products remain in the case of line extension.
E)Line extensions are strictly aesthetic changes to an existing product whereas product modifications consist of changes in quality and functionality.

Question 14

Discuss the role of new-product development in the marketing mix. Why is new-product development an important issue?

Question 15

Compare and contrast line extensions and product modifications.

Question 16

Quality modifications are changes that relate to a product's

A)dependability and durability.
B)effectiveness and versatility.
C)price and availability.
D)reliability and value.
E)value and durability.

Question 17

Discuss the importance of services in the U.S. economy, and explain the growth of services in our economy.

Question 18

Identify and describe the three major ways to modify existing products, and give an example of each.

Question 19

If the manufacturer of Cool Whip were to introduce an orange-flavored Cool Whip and still continue to produce all of its other Cool Whip products, this would be an example of

A)a brand extension.
B)line extension.
C)functional modification.
D)quality modification.
E)a new-to-the-world product.

Question 20

Coca-Cola has expanded to Diet Coke, Cherry Coke, and Caffeine-free Coke, to name a few. These are examples of

A)product modifications.
B)functional modifications.
C)aesthetic modifications.
D)line extensions.
E)product lining.

Question 21

Changes that affect a product's versatility, effectiveness, convenience, or safety are called ____ modifications.

A)functional
B)formal
C)aesthetic
D)quality
E)package

Question 22

All of the following are major steps in developing new products except

A)test marketing.
B)evaluation of competitors' efforts.
C)screening.
D)business analysis.
E)idea generation.

Question 23

Sony's design of its new plasma television sets with smoked-glass control panel covers and other visual changes would be classified as a(n) ____ modification.

A)functional
B)quality
C)product extension
D)brand
E)aesthetic

Question 24

Bauman Flooring found a supplier of very inexpensive fibers that could be used to produce low-grade carpeting at a very low cost. Because Bauman had been facing stiff competition in the medium-grade carpet industry, it started using the new material in all of its carpeting and reducing its prices. This is an example of a(n)

A)aesthetic modification.
B)line extension.
C)material adjustment.
D)functional modification.
E)quality modification.

Question 25

Introducing new products is risky and so is

A)performing marketing research.
B)keeping tabs on the actions of competitors.
C)not introducing new products.
D)generating new product ideas.
E)addressing customers' concerns about products.

Question 26

What step in developing new products involves determining whether the product idea is compatible with company objectives, needs, and resources on a general level?

A)Product development
B)Evaluation of competitor's efforts
C)Screening
D)Idea generation
E)Business analysis

Question 27

Functional modifications usually require that the product be

A)less specific.
B)limited to its functions.
C)more appealing.
D)more technical.
E)redesigned.

Question 28

A complex product development process, including an extensive business analysis to determine the possibility of success, are hallmarks of a

A)genuinely new product.
B)radically new product.
C)new product failure.
D)controlled new product.
E)market share advance.

Question 29

The major drawback to using aesthetic modifications is

A)the cost of the modifications.
B)that the value of the modification is determined subjectively.
C)the need for redesign of the product.
D)a possible decrease in market share.
E)that there is no differentiation for the product in the market.

Question 30

Concerns about cannibalization of current product sales must be addressed in the ____ phase of the new-product development process.

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

Question 31

Marketers begin to make decisions about labeling, packaging, branding, pricing, and promotion during

A)commercialization.
B)screening.
C)concept testing.
D)product development.
E)test marketing.

Question 32

Changes that affect the sensory appeal of a product by altering its taste, texture, sound, smell, or visual characteristics are called ____ modifications.

A)aesthetic
B)functional
C)operational
D)quality
E)feature

Question 33

Which of the following is the best example of a functional modification?

A)Campbell's puts more of a higher-grade chicken in its classic chicken noodle soup.
B)A smoke alarm is modified to be more sensitive to smoke at farther distances.
C)Motorola uses a battery that allows its cell phones to charge back up more quickly.
D)The manufacturer of the primer and sealer, Kilz, introduces an odorless variety.
E)Friskies changes the ingredients in its cat food to a taste that is preferred by most cats.

Question 34

The phase of new-product development in which a small sample of potential buyers are presented with a product idea through a written or oral description in order to determine their attitudes and initial buying intentions regarding the product is called

A)concept testing.
B)customer response testing.
C)idea analysis.
D)test marketing.
E)screening.

Question 35

Outback Steakhouse wants to expand its line of food products. The managers sent surveys to customers to determine which food items would appeal to them. Outback is currently in the ____ phase of new-product development.

A)business analysis
B)product development
C)test marketing
D)screening
E)idea generation

Question 36

A genuinely new product¾like the iPhone once was¾offers

A)lower prices than existing products.
B)at least two new product features.
C)innovative benefits to consumers.
D)better value than existing products.
E)at least two new product features at a lower price.

Question 37

When marketers at Nabisco meet to identify the types of snacks that young people want, they are engaging in which phase of new-product development?

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

Question 38

A group of managers has been assigned the task of developing a new product, has listed several good ideas, and is now in the process of assessing each idea to determine whether it is consistent with the firm's overall objectives and resources. The managers are at what stage of the new-product development process?

A)Business analysis
B)Product testing
C)Idea generation
D)Commercialization
E)Screening

Question 39

If Conway School Furniture Company provides standard primary school chairs in new colors to match the interiors of schools, this modification is most likely to be viewed as a(n) ____ modification.

A)aesthetic
B)functional
C)quality
D)image
E)feature

Question 40

Questions such as "How often would you buy this product?" and "Which features are of little or no interest to you?" are often proposed during

A)concept testing.
B)product development.
C)screening.
D)idea generation.
E)test marketing.

Question 41

When Natalie and Chris analyze the results from the recently completed test market to determine if any changes in the marketing mix are needed, they are in the ____ phase of the new-product development process.

A)idea generation
B)commercialization
C)test marketing
D)business analysis
E)screening

Question 42

The test-marketing stage

A)is an extension of the screening stage.
B)should come immediately after business analysis.
C)ensures that the product will not fail.
D)is a sample launching of the entire marketing mix.
E)prevents competitors from copying the product.

Question 43

Marketers at Starbucks have generated several ideas for new food products. Management has assessed whether these ideas are consistent with Starbuck's objectives and resources. Several product ideas were dropped after this analysis. The next stage of development for the remaining product ideas is

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

Question 44

Early in the commercialization phase, marketers must make decisions about

A)warranties, repairs, and replacement parts.
B)product features and breakeven points.
C)functionality, safety, and convenience.
D)the proposed marketing mix variables.
E)which ideas to further pursue.

Question 45

Angela and Ralph at Tablerock Foods believe they have come up with a delicious low-calorie dessert, but they have some doubt about which of two promotional and pricing campaigns will be better received by consumers. In this instance, they probably should proceed to the ____ stage of the new-product development process.

A)business analysis
B)commercialization
C)screening
D)test marketing
E)product development

Question 46

As Justin works on the prototype of a new action-oriented computer game, he is engaging in which phase of the new-product development process?

A)Idea generation
B)Commercialization
C)Test marketing
D)Screening
E)Product development

Question 47

The phase of the new-product development process when the organization determines the technological feasibility of producing the product at a cost that results in a reasonable selling price is

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

Question 48

Often, a new product is launched in stages during commercialization. This gradual introduction of the product is known as

A)market development.
B)regional commercialization.
C)roll-out.
D)market extension.
E)competitive jamming.

Question 49

Breakeven analysis is a tool that marketers are likely to employ during the ____ stage of the new-product development process.

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

Question 50

Product failure is a concern of all marketers. Which of the following phases of new-product development is best able to measure this concern?

A)Screening
B)Concept testing
C)Business analysis
D)Product development
E)Test marketing

Question 51

Ideally, test marketing should follow which stage in the new-product development process?

A)Commercialization
B)Business analysis
C)Screening
D)Limited production
E)Product development

Question 52

After building a prototype of his new device, Brad is asked to conduct rigorous functional testing to see if the device meets performance and safety qualifications. This is part of the ____ phase of the new-product development process.

A)product design
B)screening
C)product development
D)concept testing
E)test marketing

Question 53

Top managers at Cincinnati Microwave believe that they have a successful working prototype of their new radar detector and plan to go directly to regional commercialization of the new product. In this instance, they are contemplating skipping the ____ phase of the new-product development process.

A)screening
B)test marketing
C)product development
D)business analysis
E)idea generation

Question 54

During which stage of new-product development does the firm consider profitability?

A)Idea generation
B)Testing
C)Business analysis
D)Product development
E)Compatibility research

Question 55

PepsiCo has a new flavor of soft drink that it wants to test to determine reactions of probable buyers. Which of the following test-market characteristics would be least useful to PepsiCo when testing the new soft drink?

A)There are research and audit services available.
B)Retailers would be cooperative.
C)Testing efforts would not be easily jammed by competitors.
D)Tourism is a major industry in the area.
E)The city has stable year-round sales of soft drinks.

Question 56

Stacey and Evan are preparing budgets for a new product as well as finalizing plans for the full-scale marketing and manufacturing of the new Genie-Vac. They are in the ____ phase of the new-product development process.

A)test marketing
B)business analysis
C)concept testing
D)product development
E)commercialization

Question 57

If Jason Carter, product manager at SeaRay Boats, became aware that Bass Boats, Inc., was in the process of test marketing a new line of shallow-water fishing boats in the southeast region, he might want to engage in ____ to reduce the validity of the other firm's results.

A)testing interference
B)leadership pricing
C)jamming
D)test marketing
E)stress marketing

Question 58

A new variety of Doritos is initially introduced in Ft. Worth, Texas; Columbia, South Carolina; Peoria, Illinois; and Spokane, Washington. After its initial success, Frito Lay markets the Doritos in those entire states, then the adjacent states, and finally the entire country. Frito-Lay is using a ____ for its new variety of Doritos.

A)multi-stage introduction
B)roll-out approach
C)test-market expansion
D)mass commercialization
E)trickle-down approach

Question 59

Karla tells Jeff that she likes his team's idea about a new three-lace running shoe but wants him to put together some figures regarding anticipated sales, costs, and resulting profits. She is asking Jeff to proceed to which stage of the new-product development process?

A)Idea generation
B)Business analysis
C)Commercialization
D)Test marketing
E)Screening

Question 60

After a company has created a prototype during the product development stage, its performance, or ____ must be tested.

A)appeal to customers
B)dependability
C)durability
D)functionality
E)pricing

Question 61

If Ford adds a driver-side sliding door, side impact airbags, and a small television with DVD player to its Freestar Minivan, it is differentiating its product based on

A)styling.
B)support services.
C)design.
D)product features.
E)product quality.

Question 62

When determining how a product is conceived, planned, produced, and even its physical appearance and its specific characteristics, one is really talking about the product's

A)positioning.
B)level and consistency of quality.
C)ability to meet customer service needs.
D)design, styling, and level of quality.
E)design, styling, and features.

Question 63

The ability of a product to provide the same level of quality over time is called

A)consistency.
B)longevity.
C)variability.
D)status.
E)image.

Question 64

The three major ways to modify a product include

A)aesthetic, quality, and functional changes.
B)extensions, generations, and upgrades.
C)color, size, and quantity modifications.
D)styling, product features, and product design.
E)quality, quantity, and design.

Question 65

____ and ____ are important characteristics of quality for consumer markets, and ____ and ____ are important characteristics of quality for business markets.

A)Reliability/ease of use; technical suitability/ease of repair
B)Technical suitability/reasonable price; trusted brand name/ease of repair
C)Durability/technical suitability; company reputation/ease of repair
D)Ease of maintenance/company reputation; durability/technical suitability
E)Trusted brand name/ease of repair; reliability/company reputation

Question 66

Three major ways in which marketers engage in product differentiation are

A)product quality, product design and features, and product support services.
B)product quality, product support services, and packaging.
C)product support services, product design and features, and product positioning.
D)product positioning, product quality, and product management.
E)product positioning, product design and features, and product promotion.

Question 67

Best Buy differentiates its product offerings from its competition with stores like Sam's, by offering delivery and installation, financing arrangements, and repairs. Best Buy is differentiating through

A)product ancillaries.
B)company styling.
C)customer services.
D)company features.
E)product features.

Question 68

Product deletion can best be described as the process of deleting a product from the product mix when it

A)is perceived as a failure by top management.
B)is reviewed negatively by a systematic review board.
C)increases production costs and decreases profits.
D)no longer responds to promotional efforts.
E)no longer satisfies a sufficient number of customers.

Question 69

The overall characteristics of a product that allow it to perform as expected in satisfying customer needs is

A)quality.
B)consistency.
C)durability.
D)styling.
E)design.

Question 70

Victor thinks that a Lexus coupe is a quality vehicle, yet compared to a Mercedes Benz, he feels the quality of a Lexus is not as high. This demonstrates that the dimension of ____ is relative or difficult to describe without a basis of comparison.

A)consistency of quality
B)level of quality
C)differentiation
D)product features
E)product positioning

Question 71

To differentiate their products, companies sometimes emphasize the product support services that they offer. This is especially true when

A)the company's prices are higher than the competition's.
B)the company introduces a new product.
C)consumers are willing to pay for product support services.
D)consumers perceive all products in a market to have essentially the same quality, design, and features.
E)the quality of the company's products is inferior to the quality of competing products.

Question 72

Product deletion

A)tends to be an easy task for most organizations.
B)may be opposed by management.
C)involves immediate termination.
D)is a matter of indifference to customers.
E)usually occurs only with convenience items.

Question 73

Dropping an unprofitable product immediately is the best strategy when

A)all advertising and promotional efforts have been exhausted.
B)customers have a negative outlook on other products.
C)losses are too great to prolong the product's life.
D)the product's performance cannot be improved.
E)there is low compatibility with the firm's business strategies.

Question 74

Schwinn adds features to its bicycles no other companies offer in order to create

A)commercialization.
B)consistency of quality.
C)styling.
D)product positioning.
E)product differentiation.

Question 75

A suggested approach to deleting products, in which each product is evaluated periodically to determine its impact on the overall effectiveness of the firm's product mix, is called a(n)

A)evaluation study.
B)formal evaluation.
C)product inspection.
D)systematic review.
E)reassessment examination.

Question 76

Elena recently purchased a pair of sunglasses because she liked their quality, styling, and price. Her friend Katie purchased an almost identical pair, except that Katie's sunglasses had the name "Armani" imprinted on the side. Elena probably based her purchase decision on ____, whereas Katie apparently based her decision on ____.

A)price; product quality
B)real product differences; perceived product image
C)perceived product image; product quality
D)product value; perceived product image
E)product design; product quality

Question 77

A runout policy of product deletion

A)lets the product decline without changing the product strategy.
B)is an immediate-drop decision.
C)exploits any strengths left in the product.
D)raises the price of the product continually to secure as much profit as possible before the product is priced out of the market.
E)occurs when production cannot keep pace with demand because of material shortages.

Question 78

If Hewlett-Packard provides its customers with a help line for computer questions and problems, it is differentiating itself through

A)support of its level of quality.
B)product support services.
C)a help line feature.
D)product features.
E)customer requests.

Question 79

Marketers of a particular brand of ice cream have decided to delete their line of ice cream bars. They will do so by letting the product decline and not change the current marketing strategy. This method of deletion is called

A)business analysis.
B)immediate drop.
C)screening.
D)phase out.
E)runout.

Question 80

Which of the following is the best definition of product features?

A)The things a product does that provide benefits to the customer
B)Mechanical efforts or activities a company provides that add value to a product
C)Specific design characteristics that allow a product to perform certain tasks
D)How a product is conceived, planned, and produced with the necessary functions
E)The physical appearance of a product