Deck 8: New Product Development and Product Life-Cycle Strategies

Question 1

A detailed version of a product idea stated in meaningful consumer terms is a ________.

A) product feature
B) product concept
C) product idea
D) product image
E) product framework

Answer 1

B

Question 2

Which statement is most likely true about idea generation in the new product development process?

A) Idea generation is most effective when it occurs after idea screening.
B) Most companies set a limit for the number of ideas generated to simplify the process.
C) Intrapreneurial programs enable customers to contribute to the idea generation process.
D) Idea generation is usually followed by procedures that reduce the total number of ideas.
E) A company can either develop ideas through internal or external sources but not through both.

Answer 2

D

Question 3

List and explain some of the reasons why new products fail.

Answer 3

There are several reasons why a new product may fail. Although an idea may be good, a company might have overestimated the market size. The actual product itself may have been poorly designed. Another possible reason is that the product may have been incorrectly positioned in the market. It may have been priced too high, or advertised poorly. It is also possible that a high-level executive pushed a favorite idea despite poor market research findings. Sometimes, the costs of product development are higher than expected. The product may have been launched at the wrong time, or competitors may have fought back harder than expected.

Question 4

Which of the following steps of the new product development process would most likely use an R-W-W framework?

A) idea generation
B) idea screening
C) concept testing
D) test marketing
E) commercialization

Question 5

The third part of a marketing strategy statement describes the ________ of a new product.

A) sales, market share, and profit goals
B) distribution and pricing
C) marketing budget
D) planned value proposition
E) target market and sales goals

Question 6

The second part of a marketing strategy statement describes the ________ of a new product.

A) marketing mix strategy
B) profit and sales goals
C) planned price, distribution, and marketing budget
D) target market and sales goals
E) planned value proposition

Question 7

The Dairy Bar, a national soft-service ice cream retailer, buys cones from Cones & More. Cones & More is an important resource for marketplace information. They're considered a(n)________ source of new product ideas for the Dairy Bar.

A) entrepreneurial
B) competitive
C) external
D) internal
E) intrapreuneurial

Question 8

Acquisitions are not considered a source of new products for organizations.

Question 9

A company's external sources of new product ideas include its ________.

A) managers
B) salespeople
C) engineers
D) manufacturing staff
E) suppliers

Question 10

Which of the following statements is most likely true about the new product development process?

A) The first step in developing a new product involves determining any budgetary or distribution limitations.
B) Most firms discourage employees from contributing new product ideas because of legal concerns.
C) In most cases, concept testing is followed by concept development.
D) A product concept should be developed for each idea before it goes through idea screening.
E) Customers, competitors, distributors, and suppliers are major sources of new product ideas.

Question 11

The first part of a marketing strategy statement describes the ________ of a new product.

A) planned price and distribution
B) marketing budget
C) marketing mix strategy
D) target market, planned value proposition, and sales goals
E) planned long-run sales and market share

Question 12

Companies like 3M, Google, and Sony have ________ that encourage employees to develop new ideas.

A) trade magazines
B) marketing research firms
C) government agencies
D) competitor's ads
E) intrapreneurial programs

Question 13

Kallton is a multinational communications and information technology corporation. Its principal products are mobile telephones and tablets. It recently announced on its Web site that customers can suggest ideas for its upcoming product model. Contributors of short-listed ideas will be adequately rewarded. In this case, Kallton is using ________ to generate new product ideas.

A) marketing strategy development
B) crowdsourcing
C) concept development
D) business analysis
E) test marketing

Question 14

The new product development process usually starts with ________.

A) idea screening
B) idea generation
C) concept development
D) concept testing
E) market strategy development

Question 15

Doggie World concept tested an idea for a new chew toy that would entertain dogs while simultaneously cleaning their teeth. Dog owners were pleased with the results. The next stage in developing the new product concept is ________.

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

Question 16

The stage in which product ideas are presented to groups of target consumers physically or symbolically is referred to as ________.

A) concept testing
B) concept development
C) test marketing
D) marketing strategy development
E) crowdsourcing

Question 17

Safari Unlimited recently conducted national research to generate ideas for a new line of fatigues geared to women. The company uncovered a number of ideas about clothing and accessory preferences as well as important benefits such as built-in sunblock and durability. The Safari Unlimited product development team will most likely use ________ next to arrive at a realistic number of products for the new fatigues line.

A) crowdsourcing
B) idea screening
C) concept testing
D) concept development
E) business analysis

Question 18

In which of the following cases is crowdsourcing used for new product development?

A) A company creates a forum where anyone can contribute new product ideas.
B) A company hires a marketing agency to generate new product ideas.
C) A company reviews the sales, costs, and profit projections of an existing product.
D) A company depends on its R&D department to come up with new ideas.
E) A company partners with a design agency to create a few prototypes.

Question 19

The style, ease of use, and multi-blade technology of Gillette's Fusion razor system is a ________ that has favorably impacted consumer perceptions about other new products sold by the company.

A) product audit
B) product feature
C) product image
D) product framework
E) product concept

Question 20

Product modifications are an important source of new products for organizations.

Question 21

Which of the following costs is most likely associated with commercialization?

A) building or renting a manufacturing facility
B) paying groups of consumers for participating in crowdsourcing activities
C) determining a product's planned price, distribution, and marketing budget
D) developing a prototype of a product
E) using simulated tests to measure market capacity

Question 22

At Fantastic Flavors, a large regional chain of candy stores, employees from marketing, design, production, and finance departments work in cross-functional groups to save time and money in the new product development process. From this description, it can be inferred that Fantastic Flavors uses a(n)________ approach.

A) intradepartmental new product development
B) sequential new product development
C) team-based new product development
D) simulated test market
E) controlled test market

Question 23

In which of the following cases is little or no test marketing most likely recommended for a new product?

A) when the product requires a major investment
B) when management is unsure of the projected demand for the product
C) when the risks associated with introducing the product are high
D) when management is unsure of the marketing program for the product
E) when the costs of developing and introducing the product are low

Question 24

If a product passes both the concept test and the product test, the next step is most likely to be ________.

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

Question 25

In the ________ stage of new product development, products undergo rigorous tests to make sure that they perform safely and effectively, or that consumers will find value in them.

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

Question 26

Hollingsworth is a retail company that is planning to release a new line of luxury personal care products. Its managers are now reviewing the sales history of similar products and conducting marketing surveys to estimate minimum and maximum sales for the product. In which of the following stages of the new product development process is the product?

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

Question 27

Using ________, researchers measure consumer responses to new products and marketing tactics in laboratory stores or virtual online shopping environments.

A) simulated test markets
B) controlled test markets
C) business analysis
D) standard test markets
E) concept development

Question 28

Taco Bell test marketed Doritos Locos Tacos for three years and developed 45 prototypes. Once the decision was made to launch the new taco shell, it moved into the ________ stage of the new product development process.

A) concept development
B) product development
C) test marketing
D) strategy development
E) commercialization

Question 29

Which of the following is a disadvantage of a team-based approach to new product development?

A) It lengthens the time required to get the right products to market.
B) It involves the use of a rigid, sequential product development approach.
C) A bottleneck at one place can seriously hinder the entire project.
D) Organizational confusion and tension are likely to affect the process.
E) The process is highly ineffective for products with short life cycles.

Question 30

________ is the stage where a product and its proposed marketing program are introduced into realistic market settings.

A) Market strategy development
B) Concept testing
C) Test marketing
D) Concept development
E) Business analysis

Question 31

The team-based new product development approach saves times and increases effectiveness because departments work closely together in ________.

A) divisional teams
B) problem-solving teams
C) self-managed groups
D) cross-functional teams
E) independent groups

Question 32

Foods International is developing a new gluten-free, chili-flavored pretzel. The marketing strategy for the product has already been developed and presented to top management. Several prototypes were also formulated by the company's R&D team. The final prototype is now being tested rigorously to ensure that it passes FDA standards. Once approved, the next step will most likely be ________.

A) test marketing
B) portfolio analysis
C) commercialization
D) internal marketing
E) business analysis

Question 33

Under a ________ new product development approach, company departments work closely together in cross-functional groups, overlapping the steps in the product development process to save time and increase effectiveness.

A) cross-sectional
B) simultaneous
C) sequential
D) team-based
E) systematic

Question 34

Introducing a new product into the market is called ________.

A) test marketing
B) segmentation
C) product development
D) commercialization
E) market penetration

Question 35

Under a ________ product development approach, one company department works to complete its stage of the product development process before passing the new product along to the next department and stage.

A) cross-sectional
B) simultaneous
C) sequential
D) team-based
E) systematic

Question 36

________ involves a review of the sales, costs, and profit projections for a new product to determine whether they satisfy a company's objectives.

A) Vendor analysis
B) Portfolio analysis
C) Business analysis
D) SWOT analysis
E) Concept analysis

Question 37

In a sequential new product development process, which of the following is true of the product development step?

A) Product development is usually followed by a business analysis of the product.
B) Product development involves introducing a product into realistic market settings.
C) Product development avoids testing products on actual customers due to liability concerns.
D) Product development is usually followed by test marketing.
E) Product development helps top management review profit projections.

Question 38

Sleek Designs Inc. is producing its first eReader. The company is striving to overcome some of the issues communicated by customers about competitive products including screen glare and product bulkiness. Sleek Designs Inc. is using a ________ approach in their new product development process.

A) customer-centered
B) team-based
C) sequential
D) supply/demand
E) systematic

Question 39

A company launching a new product must first decide ________.

A) where to launch the product
B) the sample size of the market
C) when to launch the product
D) the viability of a global launch
E) the budget for print advertising

Question 40

Evans and Hills, a beverages manufacturing company, has developed a new line of specialty teas and is seeking regular input from the test marketing process. To facilitate this process, the firm uses BuyerScan, a software that generates store-by-store, week-by-week reports on the actual sales of tested products and the impact of in-store and in-home marketing efforts. Which of the following approaches does this scenario illustrate?

A) standard test markets
B) inventory tracking
C) controlled test markets
D) simulated test markets
E) direct commercialization

Question 41

When developing a new product, concept testing should ideally be followed by the business analysis stage.

Question 42

During concept testing, a product is evaluated by management without any input from external sources.

Question 43

Companies that combine a customer-centered approach with team-based new product development gain a big competitive edge by getting the right new products to market faster.

Question 44

In the new product development process, the purpose of idea generation is to create a large number of ideas and the purpose of the next set of stages in the process is to reduce that number.

Question 45

The amount of test marketing needed is the same for each new product.

Question 46

An innovation management system would most likely be used by ________.

A) managers to update details about customer information
B) brand managers to collect, review, and evaluate new product ideas
C) suppliers to access inventory information
D) product managers to track logistics of a new product
E) human resource managers to update information on employee incentives

Question 47

What are the major external sources of new product ideas? What type of information can be gathered from each of these sources? How do firms benefit from such information?

Question 48

Since suppliers are so close to the market, they are valuable sources of information about consumer problems, marketing opportunities, and new product possibilities.

Question 49

The business analysis stage is the final step in the new product development process.

Question 50

An abstract presentation of a product concept is likely to increase the reliability of the concept test.

Question 51

Concept testing typically follows the marketing strategy development phase of the new product development process.

Question 52

Manufacturers rely on distributors and suppliers as internal sources of new product ideas.

Question 53

Product development usually costs the least among all the steps of the new product development process.

Question 54

Under a team-based new product development approach, company departments work closely together in cross-functional teams. Overlapping the steps in the product development process saves time and increases effectiveness.

Question 55

The installation of an innovation management system allows a company to collect, review, evaluate, and manage new product ideas.

Question 56

It's important for a market pioneer to choose a launch strategy that is consistent with competitive positioning strategies.

Question 57

A sequential product development approach is team-oriented, enabling firms to bring products to market very quickly.

Question 58

Salon Finish is test marketing its new smoothing shampoo by assessing consumer satisfaction in laboratory stores where hair is washed and blown dry. Salon Pro is using controlled test marketing in this scenario.

Question 59

Briefly describe the steps in the new product development process.

Question 60

What is crowdsourcing? How is crowdsourcing useful in new product development?

Question 61

A product life cycle has five distinct stages: product development, introduction, growth, maturity, and ________.

A) stabilization
B) rebranding
C) decline
D) progression
E) segmentation

Question 62

Which of the following is true of the growth stage of the product life cycle?

A) New competitors avoid the market.
B) Prices tend to increase significantly.
C) Early adopters stop buying the product.
D) Profits are nonexistent at this stage.
E) Sales start climbing quickly.

Question 63

Distinguish between a product idea, a product concept, and a product image.

Question 64

Define commercialization. Explain the two important issues that a company must decide during this stage.

Question 65

Colonial furniture has been in existence since the 1600s and continues to adorn homes today. According to the product life cycle concept, it would be described as a ________.

A) style
B) fashion
C) fad
D) trend
E) drift

Question 66

Which of the following is true about the introduction stage of a new product?

A) Profits are typically high.
B) Promotion spending is relatively low.
C) Less money is needed to attract distributors.
D) Companies tend to avoid basic versions of the product.
E) Sales growth tends to be slow.

Question 67

Explain what happens during the concept testing stage of new product development.

Question 68

Flurrbies, a line of winter accessories by a leading fashion label, quickly fell in and out of favor with customers. Flurrbies represents an example of a ________.

A) form
B) fashion
C) fad
D) style
E) drift

Question 69

________ can describe a product class, a product form, or a brand.

A) The product development process
B) The product life cycle concept
C) Business analysis theory
D) Vendor analysis theory
E) Portfolio analysis

Question 70

Which of the following is true of the product life cycle (PLC)?

A) All products generally go through all five stages of the PLC.
B) All products pass through the stages of PLC in the same order.
C) It is generally difficult to forecast the sales level at each PLC stage.
D) The PLC concept can be applied to styles but not to fashions and fads.
E) Product forms have longer life cycles than product classes.

Question 71

Fads are characterized by their ________.

A) enduring nature that spans several generations
B) low rates of adoption by consumers
C) unusually high sales and rapid decline
D) basic and distinctive modes of expression that seldom become unpopular
E) non-attainment of the last two stages of the product life cycle

Question 72

Explain what happens during the business analysis stage of new product development.

Question 73

In which stage of the product life cycle will promotional expenditures be significantly high in an attempt to create consumer awareness of a product and its features?

A) product development
B) introduction
C) growth
D) maturity
E) adoption

Question 74

Appliances Galore is continually updating its line of refrigerators to reflect market trends and customer needs. Although the product class is in the maturity stage of the product life cycle, they maintain healthy sales of their line of refrigerators by continually ________.

A) concept testing
B) modifying the marketing mix
C) rebranding
D) modifying the product
E) modifying the market

Question 75

When a product is in the ________ stage, profits level off or decline because of increased marketing outlays to defend the product against competition.

A) production
B) decline
C) maturity
D) test marketing
E) conception

Question 76

Which of the following statements is most likely true about the product life cycle?

A) Throughout the product introduction stage, sales are zero.
B) The growth stage is the longest stage of the product life cycle.
C) Profits are nonexistent in the growth stage.
D) Growth is a period of rapid market acceptance and increasing profits.
E) Maturity is the period when sales fall off but profits continue to rise.

Question 77

In the ________ stage, a firm most likely faces a trade-off between high market share and high current profit.

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

Question 78

What is test marketing? What role does it play in new product development? What factors do firms consider when determining whether or not to conduct test marketing?

Question 79

Craft Inc.'s Krayons is a multi-color chalk material that was released in the market over a century ago. Since the release, the company has had remarkable sales and Krayons has remained unchanged. However, over the last few years, sales of Krayons have been stagnant. Competitors have begun marking prices down, and increasing their advertising and sales promotions. Craft's Krayons is most likely in the ________ stage of the product life cycle.

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

Question 80

What are the advantages of an innovation management system for developing new products?