Deck 9: Developing Products and Managing Product Portfolios

Question 1

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.

Answer 1

C

Question 2

Discuss the advantages and problems associated with test marketing.

Answer 2

Test marketing is stage 6 of the new product development model . Its aim is to determine the reactions of probable buyers. The dangers of introducing an untested product include undercutting already profitable products and, should the new product fail, loss of credibility with distributors and customers. Test marketing provides several benefits. It lets marketers expose a product to a natural marketing environment to gauge its sales performance. While the product is being marketed in a limited area, the company can seek to identify weaknesses in the product or in other parts of the marketing mix. Corrections can be made more cheaply than if the product had already been introduced nationwide. Test marketing also allows marketers to experiment with variations in advertising, price and packaging in different test areas and to measure the extent of brand awareness, brand switching and repeat purchases that result from changes in the mix.

Question 3

Discuss the role of style modifications for mature products.

Answer 3

During the maturity stage of the cycle, marketers actively encourage dealers to support the product, perhaps by offering promotional assistance or help in lowering their inventory costs. In general, marketers go to great lengths to serve dealers and to provide incentives for selling the manufacturer's brand, partly because own-label or retailer brands are a threat at this time. Own-label brands are both an opportunity and a threat to manufacturers, who may be able to sell their products through recognized own-label or retailer brand names as well as their own. However, own-label or retailer brands frequently undermine manufacturers' brands. Maintaining market share during the maturity stage requires moderate and sometimes heavy advertising expenditure. Advertising messages focus on differentiating a brand from numerous competitors, and sales promotion efforts are aimed at both consumers and resellers.

Question 4

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 5

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

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

Question 6

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 7

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 8

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 9

What is commercialization?

Question 10

Compare and contrast line extensions and product modifications and give examples of each.

Question 11

What are the four stages to the product adoption process?

Question 12

Compare and contrast a product manager and a market manager.

Question 13

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 14

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 15

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.

Question 16

Give examples of why is it often difficult for organizations to delete products.

Question 17

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 18

Why is a product mix portfolio important?

Question 19

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 20

Identify and explain the dimensions of product quality.

Question 21

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 22

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 23

The following organizational approaches accomplish tasks necessary to develop and manage products: market manager approach, product manager approach, and the ____ approach.

A) brand manager
B) functional team
C) multiproduct manager
D) special projects
E) venture team

Question 24

Many of the so-called new products that are launched each year are in fact line extensions.

Question 25

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 26

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) commercialisation.
C) concept testing.
D) product development.
E) business analysis.

Question 27

Quality modifications never seek to reduce product quality.

Question 28

Functional modifications usually require that the product be redesigned.

Question 29

The three major ways to modify a product include:

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

Question 30

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 31

Members of a venture team come from:

A) the marketing department.
B) a consulting firm.
C) the research and development department.
D) the production and finance departments.
E) different functional areas of an organization.

Question 32

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 33

New products are classified solely as innovations that have never been sold by any organization.

Question 34

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 35

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 36

Concept testing gives reliable feedback, but at a relatively high cost.

Question 37

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 38

Elizabeth from marketing, Manuel from finance, Tony from production, Cynthia from engineering, and Alexandra from research and development were put together by their company to develop a new low-calorie, high-nutrition snack treat. These five people are a(n) ____ at their company.

A) venture team
B) SWAT team
C) brand management group
D) idea generation group
E) product positioning group

Question 39

The product deletion process is similar to the ____ step of the new-product development process because both involve deciding whether the product should be in the product mix based on an assessment of sales, costs, and profits.

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

Question 40

Modifications make an existing product more durable.

Question 41

Relatively few product ideas are put into the product development stage.

Question 42

Firms marketing a quality product that generates strong sales can afford to keep expenses down by eliminating new-product development.

Question 43

Consistency of product quality means giving consumers the quality they expect every time they purchase a product.

Question 44

To manage products effectively, the product manager must be independent of other departments.

Question 45

Product support services are important mainly for products that are mechanical in nature.

Question 46

Venture teams work outside of established organization divisions.

Question 47

The concept of product quality is the same from consumer to consumer and from consumer markets to organizational markets.

Question 48

An important question in the business analysis stage of new-product development is, "Will this product meet our profit goal?"

Question 49

Test marketing is used by companies of all sizes, primarily because of the perceived risk of product failure on the open market and the associated consequences.

Question 50

The majority of new-product projects initiated by major companies reach the commercialization stage.

Question 51

The product development stage determines the technical feasibility of producing the new product.

Question 52

Delivery, installation, financing, repair, warranties, and guarantees are all examples of product features.

Question 53

Product design is the process of creating and designing products so that consumers perceive them as different from competing products.

Question 54

New-product development does not include planning for advertising.

Question 55

Test marketing is an extension of the product screening process.

Question 56

The business analysis stage of new-product development explores how well the new product fits in with the firm's existing product mix.

Question 57

During the commercialization phase of new-product development, plans for full-scale manufacturing and marketing are refined and settled.

Question 58

Test marketing is a sample launching of the entire marketing mix.

Question 59

Systematic reviews of a company's product mix aid in determining when product deletion is necessary.