Question 1

Your firm added three new products earlier this year to increase variety for customers.Two of them failed to reach even minimal sales.Which of the following is LEAST likely to have been the cause of their failure?

Accepted Answer

Research being too extensive is unlikely to have been the cause of the product failure, as extensive research is usually done to ensure the product's success by identifying potential issues and addressing them beforehand. Therefore, it is less likely to have been the cause of failure as compared to the other options.

Question 2

Under what circumstances might it be wise for a company to do little or no test marketing?

Accepted Answer

When the costs of developing and introducing the product are low, the financial risk is minimized, making extensive test marketing less critical.

Question 3

Although test marketing costs can be high,they are often small when compared with ________.

Accepted Answer

The phrase "when compared with" suggests that the missing word is a negative consequence, and option B is the only choice that fits that category. The costs of a major mistake can be far more significant than the cost of test marketing.

Question 4

In the early 1990s,Jarrah was the first brand in the Australian market to offer pre-prepared,instant coffee mixes in flat and frothy varieties.The brand featured exotic flavourings with cheeky names such as Cheeky 'Cino Cappuccino,White Choc-a-Mocha Latte,Mocha Truffle Latte,Vanilla Thriller Latte and Crème Caramel Latte.At the time,the launch was considered high risk and did not enjoy a big budget.Accordingly,the marketers devised a plan which involved a limited scale launch first in the regional Victorian town of Ballarat.Only when that was successful was the brand launched in Tasmania.Over time,the brand was launched in more and larger towns and cities around the country.The purpose of this was to gauge customer reactions,minimise the company's risk exposure,spread out investment outlays and fine tune elements of the marketing mix.This practice is best described as a planned ________.

Accepted Answer

The answer of In the early 1990s,Jarrah was the first...

Question 5

A Day Care centre plans to offer third-shift childcare,based upon the opening of two new manufacturing plants in the area.Together the plants will hire 450 employees and run all three shifts.Initial test marketing results look promising.In considering launching this new service,the firm must first decide on ________.

Accepted Answer

The answer of A Day Care centre plans to offer...

Question 6

Following the decision to 'time' the introduction of the new product,a company must decide ________ to launch the new product.

Accepted Answer

The company must decide "where" to launch the new product, as timing has already been determined.

Question 7

The major purpose of test marketing is to provide management with the information needed to make a final decision about ________.

Accepted Answer

The main purpose of test marketing is to test a new product in a small geographic area to get information about the product and the market. This information is then used by management to make a final decision about whether to launch the new product or not. Therefore, the correct answer is (C) whether to launch the new product.

Question 8

Introducing a new product into the market is called ________.

Accepted Answer

Introducing a new product into the market is called commercialisation. This involves launching the product and making it available for purchase by customers.

Question 9

Which of the following costs is most likely associated with the commercialisation stage of new-product development?

Accepted Answer

Building or renting a manufacturing facility is a cost associated with the commercialisation stage, as it involves preparing for full-scale production and market launch.

Question 10

Once managers of a firm have decided on their product concept and marketing strategy,they can evaluate the business attractiveness of the proposal in the ________ stage of the new-product development process.

Accepted Answer

The business attractiveness of the proposed product concept and marketing strategy is evaluated in the business analysis stage. This involves conducting a detailed analysis of the market size, competition, pricing, profitability, and other factors to determine if the idea is feasible and financially viable. The other options mentioned in the question are stages in the new-product development process but are not directly related to evaluating the business attractiveness of the proposal.

Question 11

Sony Music is conducting a business analysis to determine which of the many new songs available to management should be released.Estimates of sales must be prepared before costs can be estimated.Which of the following did your text recommend for forecasting sales?

Accepted Answer

The text recommends considering the sales history of similar products and conducting surveys of market opinions for forecasting sales. This approach takes into account both past performance and current market sentiments, providing a more well-rounded estimate of potential sales. Conducting surveys of competitors or applying the PLC concept may also be helpful, but they are not specifically recommended in the text for forecasting sales. Considering only the history of market opinions may not provide enough quantitative data for accurate sales estimates.

Question 12

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.

Accepted Answer

The product development stage is where new products are created and undergo rigorous testing to ensure safety and effectiveness. Option A, B, C, and E are incorrect as they refer to stages prior to product development.

Question 13

A new company designing and selling several lines of mobile phones has closely modelled its products after successful competitive products that are already in the marketplace.As it prepares to enter the market with its new products and services,which of the following should concern it the most?

Accepted Answer

Timing is crucial for a new company entering the market with products similar to existing ones. Entering the market at the right time can significantly impact the company's ability to capture market share and compete effectively.

Question 14

Telekom Communications is concerned about test marketing its new device.Which of the following is NOT a disadvantage of test marketing that would likely concern them?

Accepted Answer

While all of the other options are valid concerns for test marketing, the issue of people not telling the truth is not a disadvantage that would concern Telekom Communications. They would likely be more concerned with the cost, time, and potential for competitors to gain advantages during the test marketing phase.

Question 15

A company getting ready to launch a new product must make several decisions.The company must first decide on ________.

Accepted Answer

The first decision a company must make is when to time the new product introduction, as this will influence all subsequent decisions regarding location, region, and distribution strategy.

Question 16

During which stage of new-product development will management most likely estimate minimum and maximum sales to assess the range of risk in launching a new product?

Accepted Answer

The business analysis stage involves analyzing the profitability and feasibility of the new product. During this stage, management estimates the minimum and maximum sales to assess the range of risk in launching a new product.

Question 17

Once the prototype of a new ride-on lawnmower,made especially for women,passes product tests,the next step is ________.

Accepted Answer

Test marketing is the next step after product testing to evaluate the product's performance in a real market setting before full-scale commercialization.

Question 18

Companies often do not test ________ or copies of successful competitors' products.

Accepted Answer

Companies often do not test simple line extensions or copies of successful competitors' products because these are generally low-risk and based on existing successful models.

Question 19

Once the product or service passes the business analysis test,it moves into what stage?

Accepted Answer

Once the product or service passes the business analysis test, the next stage is product development where the idea is turned into a tangible product or service through design, engineering, and prototyping.

Question 20

Masport Industries will build a new prototype ride-on lawnmower especially for women.In the product development stage,they will incorporate the functional features and convey the ________.

Accepted Answer

In the product development stage, incorporating the intended psychological characteristics is crucial for tailoring the product to the target audience's preferences and perceptions, in this case, especially for women. This approach ensures the product resonates well with its intended users by addressing their specific needs and desires.

Quiz 8: New Products: Developing and Managing Innovation